Empyrean Regulatory News (EME)

14 Apr 2008 07:15

Empyrean Energy PLC14 April 2008 Empyrean Energy PLC ("Empyrean" or the "Company"; Ticker: (EME)) Sugarloaf Block A, Texas USA ---------------------------- • Empyrean confirms significant discovery at the Sugarloaf Project area.• First well tested from five drilled to date (Sugarloaf Blocks A & B) flows commercial quantities of gas and condensate on test.• Four further wells which have all encountered hydrocarbon shows whilst drilling are yet to be tested. Empyrean, the AIM listed energy company with exploration andproduction assets in Germany and USA today announces the followinginitial test results from its TCEI JV Block A-3 well on Block A atthe Sugarloaf Project in Texas: Initial flow testing of the TCEI JV Block A-3 well has recorded flowrates using 12/64" choke close to 1.9 mmcfgpd (million cubic feetgas per day) with over 460 bcpd (barrels of condensate per day) and75 bwpd (barrels of water per day - normal under thesecircumstances) with a FTP (Flow Tubing Pressure) of almost 4000 psi.On the present day prices for condensate and gas whilst convertingthe condensate to a gas equivalent, the equivalent gas flow rateexceeds (using a 10:1 conversion) 6.5 mmcfepd (million cubic feetgas equivalent per day). This open hole test has been conducted without stimulation and istesting the vertical pay section in the upper part of the CretaceousAustin Chalk reported in our announcement of 15 November 2007 (peakreadings 350 units - 10 times background levels). The drilling ofthis well ceased 2,700 feet short of the proposed length assignificant gas shows and flares whilst drilling were encounteredprompting the operator to prepare the well for an open hole flowtest, to see if the well would flow without stimulation, as reportedin our announcement of 11 January 2008. Much work is now being conducted to correlate these early resultswith that of a similar field in the region to help establish bestpractice for completions moving forward on this substantial andsignificant gas condensate discovery. The Brookeland Field in TylerCounty is one such field and early comparisons are very favorable. Atypical well drilled by one of the operators in the Brookeland Fieldhas an approximate equivalent rate of 1.4 mmcfepd per thousand feetof horizontal (comparing favorably to Empyrean's TCEI JV Block A-3well at approximately 2.4 mmcfepd per thousand feet of horizontal).The typical well for one operator at the Brookeland Field hasapproximately 12,000 feet of horizontal with average initial ratesof over 16 mmcfepd. Commenting today, Empyrean Executive Director Tom Kelly said "Theimportance of this comparison is that Empyrean's TCEI JV Block A-3well has approximately 2800 feet of horizontal and a much higherequivalent production rate per thousand feet of horizontal wellindicating that at the Sugarloaf Project there is every chance thatbetter production rates may be able to be gained by increasing thelength of the horizontal portion of the wells." After some 20 hours of flow testing the TCEI JV Block A-3 well hasbeen shut in to conduct pressure measurements and other reservoirdata measurements as part of the normal engineering procedures tomeasure the parameters of this discovery. Further testing will berequired to confirm the extent of the reservoir and the fielddeliverability. At this early stage there is no clear indication onthe time it will take to determine these important factors. Empyrean has a 7.5 % working interest in the TCEI JV Block A-3 welland further announcements will follow as significant developmentscome to hand. Tom Kelly added "This is terrific news for Empyrean and ourshareholders. The initial recorded flow rates are excellent using achoke that was not fully opened and the pressure is high. Much isbeing learnt from this well and the comparison with Brookeland thatshould see many of our future wells flowing even better than thisone. After a very patient wait Empyrean's shareholders are beingrewarded with being part of a major discovery. This is the firstflow test from 5 drilled wells that have all encountered hydrocarbonshows whilst drilling on this project's extended area. We still have4 already drilled wells to test which is very exciting. Moreimportantly, this first well tested has confirmed a significant gas/condensate discovery, and with oil fetching over US$100 a barrel theeconomics are even more attractive." The information contained in this announcement was completed andreviewed by the Technical Director of Empyrean Energy Plc, Mr FrankBrophy BSc (Hons) who has over 40 years experience as a petroleumgeologist. For further information: Empyrean Energy plcTel : +44(0) 207 182 1746 Rod Venables / Cecil JordaanHB CorporateTel: +44(0) 207 510 8600 Jonathan Charles / Ed PortmanConduit PRTel: +44 (0) 207 429 6611 / +44 (0) 7791 892 509 This information is provided by RNS The company news service from the London Stock Exchange