Empyrean Regulatory News (EME)

11 Jul 2007 08:24

Empyrean Energy PLC11 July 2007 Empyrean Energy PLC ("Empyrean" or the "Company"; Ticker: (EME)) Sugarloaf Prospect, ("Sugarloaf") Texas USA ------------------------------------------- Empyrean provides the following update on the Sugarloaf Prospect as provided bythe operator. Sugarloaf-1 Well---------------- The rig required to undertake remedial cementation and formation testing hasarrived on site. Remedial cementation operations will start immediately and areexpected to take up to three weeks to complete. This will be followed byfracture stimulation and flow testing of each of the three zones of possible gaspay, identified from wire-line logs and gas shows in carbonate rocks ofCretaceous age. For engineering reasons the deepest zone will be tested first. Should any of thezones of interest produce hydrocarbons at commercial rates, it is likely theywould be placed on long term production testing to assess reservoir performance. Sugarkane Gas Field------------------- The upper zone of possible gas pay in the Sugarloaf-1 well is believed tocorrelate with the producing zone in a new field discovery well, located 6.6kilometres west of the Sugarloaf-1 well on Block A. The new discovery is knownas the Sugarkane Gas Field. Empyrean has no interest in the discovery well, butdoes have an interest in future wells to be drilled in the Sugarkane Gas Fieldon Block A via a previously announced 16 well deal with Texas Crude Energy Inc(operator of the Sugarloaf Joint Venture on Block B). Further details of the discovery are not yet available but the well is vertical and is believed to have been producing gas and condensate continuously for more than eight months. Although the upper zone of possible pay in the Sugarloaf-1 well has not yet beenflow tested, on wire-line log, gas log and regional seismic interpretationgrounds, the upper zone in Sugarloaf-1 appears to be within the Sugarkane GasField. Study of regional seismic and well information by Texas Crude Energy Inc,suggests the Sugarkane Gas Field is extensive. TCEI JV Block A -1 well----------------------- The recently spudded TCEI JV Block A-1 well is targeting the same producing zoneas the newly discovered Sugarkane Gas Field. The latest information from TexasCrude Energy Inc was that the well was drilling ahead. Proposed Sugarloaf-2 Well------------------------- As leasing of acreage is now essentially complete, the Sugarloaf Projectoperator has proposed the drilling of a second well, located about 1.6kilometres from the Sugarloaf-1 well. The well is an exploration well and is proposed to be drilled vertically to justabove the target and then horizontally for 5,000 feet (1,524 metres) in thetarget upper zone of possible gas pay defined in Sugarloaf-1. As alreadymentioned, this is the zone which is believed to correlate with the producingzone in the Sugarkane Gas Field discovery well. Horizontal drilling has been selected, as successful wells commonly produce atrates several times that of a vertical well at the same point in the reservoir. A suitable rig has been identified and subject to Joint Venture approval andexecution of relevant documentation, is expected on location about the end ofAugust. The Operator estimates Empyrean's share of dry hole costs to beapproximately US$940,000 (total well dry hole cost US$3.6 million) andcompletion costs to be approximately US$430,000 (total well completions costs US$1.65 million). Empyrean has an 18% working interest in the Sugarloaf-2 well. 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: Charlie Geller/ Ed PortmanConduit PRTel: +44 (0) 207 429 6605/ +44 (0) 7979955923 Empyrean Energy plcTel: +44(0) 207 182 1746 Rod Venables/ Cecil JordaanHB CorporateTel: +44(0) 207 510 8600 This information is provided by RNS The company news service from the London Stock Exchange