Empyrean's production expected to grow in 2014

Onshore oil and gas company Empyrean said it expects to see output and proven reserves grow at year-end with up to 110 new wells in production. The firm is currently producing about 900 barrels of oil equivalent per day, led by the Sugarloaf AMI licence in South Texas. Sugarloaf had 101 gross producing wells at the end of September 2013, an increase of 50 on a year ago, bringing the total to 116 wells. It helped lift net profit to £2.38m in the six months through September from £66,000 a year earlier. Revenue jumped £3.82m from £1.62m.Chief Executive Tom Kelly said he sees output improving as the company develops the Eagle Ford prospect within the licence. "We are focusing on high impact/low risk projects such as Eagle Farm which perhaps hold the best potential for shareholders," he told Sharecast. The group is currently awaiting the results of an appraisal of the Austin Chalk formation, which lies immediately above Eagle Ford. Once the firm receives the results, it will have a better idea of what to expect this year. "What we don't know is what the numbers are going to be but in general we see its going to be positive. So watch this space," Kelly said. The report is due in the first quarter of 2014. Kelly said first quarter results are expected to be at similar levels to the previous quarter as an equivalent number of wells were drilled during the period. RD