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Final Results
Empyrean Energy, the profitable US onshore oil, gas and condensate exploration, development and production company with assets in Texas and California, has announced its final results for the year ended 31 March 2015.
Highlights
· Record revenue and production driven by further improvements at flagship Marathon Oil operated Sugarloaf AMI project (EME 3% working interest), despite the fall in oil prices during the year
o 15% increase in revenues for the 12 months to 31 March 2015 to US$16.010m (2014: US$13.884m)
o 2% decrease in net profit before tax for the 12 months to 31 March 2015 to US$5.122m (2014: US$5.221m)
o 9% increase in production net to Empyrean (after royalties) for the 12 months to 31 March 2015 to 366,469 barrels of oil equivalent (2014: 335,305 barrels of oil equivalent)
· Substantial increase in activity at Sugarloaf with 130 wells spudded (2014: 43 wells) and 84 wells brought into production during the period (2014: 39 wells)
o Stack and Frac pilot programme commenced with early production results encouraging
o Downward trend in drilling and completion costs continues
· Re-negotiated finance facility with Macquarie Bank
o US$11m drawn down 1 April 2015
· Updated reserves report to 31 December 2014 on Sugarloaf AMI released in June 2015 showed:
o 63% increase in 1P Reserves to 5.78 Mmboe
o 94% increase in 2P Reserves to 12.64 Mmboe
o 134% increase in 3P Reserves to 20.91 Mmboe
o 2C Contingent Resource of 2.85 Mmboe
o 49% increase in 2P + 2C to 15.49 Mmboe
· Significant potential from the Upper Eagle Ford formation
o Early production from the Upper Eagle Ford indicates that this zone is in a similar appraisal phase to that of the Austin Chalk 18 months ago
o Further development of the Upper Eagle Ford could add another 500 wells to the overall field development
Empyrean CEO Tom Kelly said, “I believe we have made significant progress across many fronts in spite of one of the most challenging periods for all oil producers globally. We have increased revenues, been able to re-finance our participation in the flagship Sugarloaf AMI and are positioned to capitalise on the significant growth in reserves that has evolved from further successful delineation and appraisal of the Austin Chalk formation, which is being co-developed with the Eagle Ford Shale. From a value perspective, the indicated NPV10 of our 2P reserves has shown a solid increase from December 2013 to December 2014 despite the fall in oil prices and, importantly, we also have significant growth upside to unlock from further appraisal of the Upper Eagle Ford formation. Finally, we remain focussed on delivering a favourable outcome for shareholders from our portfolio and, in particular, the continued involvement in the Sugarloaf AMI.”
