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MAJOR UPGRADE TO SUGARLOAF AMI RESERVES AND RESOURCES
Empyrean, the profitable US onshore oil, gas and condensate exploration, development and production company with assets in Texas and California, has announced a significant increase in its Reserves and Resources at its flagship Sugarloaf AMI assetin the liquids rich core of the Eagle Ford Shale in Texas, USA, following the receipt of an independent appraisal and updated report prepared by DeGolyer & MacNaughton.
· Proven Reserves (1P) up 63% to 5.78 MMboe
· Probable Reserves up 130% to 6.86 MMboe
· Proven plus Probable Reserves (2P) up 94% to 12.64 MMboe
· Proven plus Probable plus Possible Reserves (3P) up 134% to 20.91 MMboe
· 2P Reserves plus 2C Resources up 49% to 15.49 MMboe
· NPV (10) of 1P Reserves valued in report at approximately US$43.8 million
· NPV (10) of 2P Reserves valued in report at approximately US$121.7 million
· NPV (10) of 3P Reserves valued in report at approximately US$263.5 million
· 231 wells in production at the Project with 54 drilled wells undergoing completion operations
· Increased reserves attributable to successful appraisal of the Austin Chalk and a shift from contingent resource status into a reserve status
· Upper Eagle Ford now represents similar upside potential to where the Austin Chalk was 18 months ago
The Project, in which Empyrean has a 3% working interest, is operated by Marathon Oil Company, a subsidiary of US major Marathon Oil Corporation (NYSE:MRO). The figures below represent the Barrels of Oil Equivalent Reserves and Resources attributable to Empyrean’s net revenue interest after royalties in the Project.
Empyrean CEO Tom Kelly said, “These are fantastic improvements to our reserves and resources. As anticipated, further appraisal and drilling of the overlying Austin Chalk wells along with continued success from optimisation initiatives in the Eagle Ford Shale and Austin Chalk collectively have resulted in a very substantial increase in our reserves position at the Sugarloaf AMI.
“We anticipated a shift from contingent resources to reserves as further Austin Chalk wells were drilled and appraised. The excellent development rate during 2014 and, in particular, closer well spacing assumptions have resulted in assisting this conversion from contingent resource to reserves and an improvement in the volumes.
“Excellent upside potential from the relatively new productive zone, the Upper Eagle Ford formation, has now been identified by Marathon for further drilling and appraisal. The Upper Eagle Ford is already producing from a small number of wells and further pilot wells are already planned to test this productive zone.
“Although the fall in oil prices over the last 12 months has slightly impacted the Net Present Value at a 10% discount rate of Proven Reserves (1P), we are pleased to see that there has been a significant overall increase in both NPV10 of 2P and 3P reserves reflecting the increased potential of the Project. Our flagship asset continues to grow and represents a viable and attractive investment proposition even at current lower oil prices.”
