Empyrean Regulatory News (EME)

6 Apr 2006 07:00

Empyrean Energy PLC06 April 2006 Empyrean Energy PLC ("Empyrean" or the "Company"; Ticker: (EME)) Farm-in Agreement for Gas Exploration - Texas, USA • Acquisition of 6% working interest in the Sugarloaf Hosston Prospect, South Texas • Multi trillion cubic feet gas target - 0.97-2.3 TCF • Farm-in agreement with Texas Crude Energy, Inc (Operators) • Drilling scheduled for Q3 2006 AIM quoted Empyrean today announces that it will participate in the SugarloafHosston Prospect, South Texas, USA ("the Project") following a farm-in agreementwith local Houston based operator/explorer Texas Crude Energy, Inc. The Sugarloaf Hosston Prospect (Cretaceous) is a 20,000 acre 4-way closure withmulti trillion cubic feet ("TCF") gas potential in one of the most prolifichydrocarbon provinces in the world. An independent expert has estimated that theSugarloaf Hosston Prospect could contain a P50 (probability 50%) reserve of 0.97TCF gas, with the P10 assessment estimated at 2.3 TCF gas. Texas Crude Energy will be the operator of the project and plan to have aninitial well drilled to a total depth of 21,000 feet commencing during Q3 2006.The large anticlinal structure is well defined by some 24 lines of re-processed2D seismic data. The target Hosston Sands are in the lower cretaceous and arepredicted to occur at 17,000 feet. Drilling is estimated to take 110 days tothis depth. The terms of the agreement with Texas Crude Energy are for Empyrean to pay 7.5%of the costs of the initial well (including lease costs and operating expenses)until payout after which Empyrean's working interest reverts to 6.0% (4.26%NRI). The initial well is expected to cost a total of US$6 million with leasecosts and completion costs a further US$4 million. Empyrean's share of thisexpenditure is estimated at US$750,000. Commenting today Tom Kelly, Executive Director states "The participation in theSugarloaf Hosston Prospect allows Empyrean exposure to a potentially massive gasresource. The profile of this prospect is in line with our strategy to develophigh value energy projects in politically stable countries with high levels ofinfrastructure and healthy domestic energy markets. We look forward to seeingresults from the Project later this year once drilling commences in Q3 of 2006.This is an exciting and busy time for our company with horizontal completion atour Eagle Oil Pool Development Project in California underway and testing at theGlantal Gas Project in Germany commencing soon and drilling at the SugarloafHosston Prospect enhancing the portfolio." The information contained in this announcement has been reviewed by theTechnical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who hasover 40 years experience as a petroleum geologist. Laurence Read Toby Howell Conduit PR plc HB Corporate Tel: +44 (0) 207 429 6666 Tel: +44(0) 207 510 8600 Mob: +44 (0) 7979 955 923 Mob: +44 (0) 7775 895 579 Empyrean Energy Tel : +44(0) 207 932 2442 Appendix As previously announced : Eagle Oil Pool Development ProjectSan Joaquin Basin, California, USA ("the Project")Farm-in agreement with Australian Stock Exchange quoted Victoria Petroleum NL ("Vicpet"). The San Joaquin Basin in southern California is a proven oil and gas field thathas produced in excess of 12 billion barrels of oil and 11 trillion cubic feetof gas. The Eagle North-1 appraisal well is being drilled up dip from aprevious discovery well. An independent expert has estimated that the Eagle OilPool Development Project could contain a P50 (probability 50% unrisked) reserveof 7.1 million barrels of recoverable oil and 12.3 billion cubic feet ofassociated gas, with the P10 assessment estimated at 22.7 million barrels of oil and 22.7 billion cubic feet of associated gas. The Project is astructural-stratigraphic trap play targeting the Eocene aged Gatchell Sandformation. Horizontal completion drilling is underway following positive interpretation ofelectric logs that were conducted following drilling of the vertical well. Glantal Prospect, Neues Bergland permitFrankfurt, GermanyFarm-in agreement with Pannonian International Ltd ("Pannonian"), a wholly owned subsidiary of U.S.-based Galaxy Energy Corporation (OTC BB: GAXI) The highly prospective area of the Neues Bergland permit is located close to Frankfurt in Germany. The permit contains the Pfalzer Anticline which is a 515 square kilometre structure containing deep anthracitic coal beds overlaid by shale and sediment. The coal beds are too deep to mine economically but havebeen estimated by the independent expert to have a recoverable gas potentialof up to 6.2 Tcf in the first drilling prospect alone. The independent experthas calculated the smallest potential pay-zone has the potential to hold a recoverable 1.2 Tcf of gas. Electric logs from the Glantal-1 well (including FMI analysis) have beencompleted and a testing program is currently being finalized by the operator. This information is provided by RNS The company news service from the London Stock Exchange