Empyrean Regulatory News (EME)

18 Aug 2006 09:17

Empyrean Energy PLC18 August 2006 Empyrean Energy PLC ("Empyrean" or the "Company"; Ticker: (EME)) Sugarloaf Hosston Prospect, Texas USA ------------------------------------- - Drilling Commences at the Sugarloaf-1 well. - Multiple reservoirs targeted. - Deep target has multi-TCF potential. AIM quoted Empyrean Energy PLC today announces that the Sugarloaf-1 exploration well, located in the onshore Gulf Coast Basin in Texas, USA, commenced drilling at 0200 hours on 17th August 2006. At 0600 hours today, Sugarloaf-1 was at a measured depth of 186 feet and drilling ahead in 22 inch diameter hole. The proposed total depth of Sugarloaf-1 is 21,000 feet (6,400 metres) or such other depth as agreed by the joint venture partners. The well has a number of geologically independent targets and is being drilledin an area where there are numerous fields producing from a variety ofgeological horizons. The primary target is a large four-way dip closed growth fault structuredeveloped in the early Cretaceous aged Hosston Formation. The top of the Hosstonis interpreted from seismic to be at approximately 17,000 feet (5,200 metres)and there is the potential for several different sandstones to be developed overa gross 4,000 feet (1,200 metres) thickness. Mean reserves potential for theHosston target is 800 BCF of gas, with upside potential of several TCF. The shallower secondary targets are in Cretaceous aged carbonate formations atdepths ranging from 12,000 to 14,000 feet (3,600 - 4,300 metres). Theseformations are productive in adjacent areas. Reserves potential of the shallowtargets is estimated at around 100 BCF equivalent. The first secondary target of the well (12,000 - 14,000 feet) is anticipated tobe reached approximately 4 weeks after spud. Given that the well is designed tobe drilled to 21,000 feet, these shallower formations will be evaluated by logsand cased off, regardless of whether or not hydrocarbons are present. Ifpotentially commercial hydrocarbons are interpreted from the logs, these will beproduction tested with a smaller rig as soon as practicable after the deepdrilling rig is released. Definitive results from the shallow targets willtherefore only be obtained after a testing program once the well is completed. The primary Hosston target is expected to be reached in early to mid October andtotal depth of 21,000 feet (6,400 metres) in early November. If hydrocarbons areintersected in the Hosston Formation, they will be cased off and productiontested using a smaller completion rig. Due to the Australian Stock Exchange ("ASX") listed partners' intentions toissue routine ASX releases providing a Sugarloaf-1 update every Wednesday duringdrilling, Empyrean Energy Plc will provide a mirror updating announcement forconsistency unless there are material matters which require an earlier release. Executive Director, Tom Kelly, commented: "The Sugarloaf Hosston Prospect is another exciting well for Empyrean withmultiple reservoir targets including the deeper multi-TCF gas target. The wellis close to existing hydrocarbon infrastructure and with strong energy prices inthe USA - any discovery will be rapidly brought into production. Empyrean willcontinue to seek excellent risk versus reward opportunities aimed at deliveringearly cash flow and building shareholder value upon exploration success." Participants in the Sugarloaf-1 well are: Adelphi Energy Texas, Inc.* 20.0%Texas Crude Energy Inc (Operator) et al# 41.5%Aurora Oil and Gas Ltd 20.0%Eureka Energy Ltd 12.5%Empyrean Energy plc 6.0% * a wholly owned subsidiary of Adelphi Energy Limited # includes other private US companies / investors The information contained in this announcement was completed and reviewed by theTechnical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who hasover 40 years experience as a petroleum geologist. For further information Angus Prentice/Laurence Read Conduit PR Empyrean Energy plcTel: +44 (0) 207 429 6603 Mob: +44 (0) 79974 982512 EmpyrianTel : +44 (0) 207 932 2442 Imran Ahmad / Cecil JordaanHB CorporateTel: +44 (0) 207 538 1166 This information is provided by RNS The company news service from the London Stock Exchange