TIDMEME
RNS Number : 0625H
Empyrean Energy PLC
04 April 2022
This announcement contains inside information
Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil &
Gas
Empyrean Energy plc
Block 29/11, China - NH9 rig to mobilise to Jade this week
4 April 2022
Empyrean Energy plc ("Empyrean" or the "Company"), the oil and
gas development company with interests in China, Indonesia and the
United States, is pleased to provide the following update on
preparations to drill the Jade prospect (the "Jade Prospect") at
its 100% owned Block 29/11 permit, offshore China.
HIGHLIGHTS
-- Drill Well On Paper ("DWOP") meeting for operations related
to the upcoming drilling of the Jade prospect conducted on 1 April
2022
-- COSL has implemented stringent Covid measures for conducting safe operations
-- COSL has advised that rig mobilisation operations will commence 6 April 2022
-- Spudding of LH 17-2-1 well over Jade Prospect is expected
within days of rig being safely anchored on well site
Empyrean is the operator of Block 29/11 in China and has 100%
working interest during the exploration phase. In the event of a
commercial discovery, its partner, China National Offshore Oil
Company ("CNOOC"), may assume a 51% participating interest in the
development and production phase.
The China Offshore Services Limited ("COSL") drilling team
invited Empyrean and CNOOC EnerTech ("EnerTech") for a 'Drill Well
On Paper" ("DWOP") meeting on 1 April 2022. COSL has prepared a
thorough and comprehensive operational plan for the Jade well
operations.
Key operational points are as follows:
1. Two onshore bases have been setup for helicopter to rig
transfers, to provide an alternate and manage any shutdowns due to
Covid
2. Drilling mud properties optimisation process has been finalised
3. Well-defined operational team structure has been setup with
clear roles and responsibilities between EME, COSL and EnerTech
4. Various drilling services (including drilling fluid, cement,
log tools, shipping vessels) are ready
5. Towing and navigational warning permit, a responsibility of COSL, is in hand
6. Stringent Covid protocols and policies are in place with
entire drilling crew required to have negative PCR test 48 hrs
before leaving home, followed by 4 days quarantine in central
facilities and, finally, will need a negative PCR test before
flying to rig
With the improvement in the weather, COSL has advised that
up-anchor, rig mobilisation and then operations to anchor the rig
at Jade will commence 6 April 2022. Safety protocols require sea
conditions to be a 6 or less on the Beaufort Scale for towing and
anchoring operations, which are expected to take 4 days in
total.
A further update will be provided once operations commence and a
spud date estimate can be provided.
The information contained in this announcement has been reviewed
by Empyrean's Executive Technical director, Gaz Bisht, who has over
31 years' experience as a hydrocarbon geologist and
geoscientist.
Empyrean CEO, Tom Kelly, stated:
"The effort, preparation and cooperation between Empyrean, COSL
and CNOOC EnerTech has been excellent. With the improvement in
weather, we are excited to be so close to commencing drilling at
the 395 million barrel Jade target within days. Shareholders can
feel confident that Empyrean is well represented on the ground in
China with Company technical director, geologist and geophysicist -
Gaz Bisht - overseeing the drilling campaign on behalf of
Empyrean."
Background Information on Jade and Topaz prospects
The Jade Prospect
The 2021 drilling campaign is targeting a world class
conventional oil target in the Jade Prospect, to which Gaffney
Cline & Associates ("GCA") assigned a Geological Chance of
Success ("GCoS") of 32%. Subsequent to this independent assessment,
the Company completed a gas cloud study and post stack seismic
inversion study that it believes further mitigates risk and
increases the GCoS to 41%.
The Jade Prospect has a GCA audited mean in place potential of
225 MMbbl and a P10 in place upside of 395 MMbbl. Four recent
nearby discoveries by CNOOC immediately to the West of the Jade
Prospect are filled to their P10 potential or better. All four
CNOOC discoveries have gas clouds showing in the overburden on
seismic.
The Topaz Prospect
Following any potential success at the Jade Prospect, Empyrean
would like to drill the much larger Topaz Prospect, to which
Gaffney Cline & Associates ("GCA") assigned a Geological Chance
of Success ("GCoS") of 30%. Subsequent to this independent
assessment, the Company completed a gas cloud study and post stack
seismic inversion study that it believes further mitigates risk and
increases the GCoS to 35%. Further, any discovery at the upcoming
Jade well significantly increases the geological chance of success
at Topaz
The Topaz Prospect has GCA audited mean in place potential of
434 MMbbl and a P10 in place upside of 891 MMbbl.
Four recent nearby discoveries by CNOOC immediately to the West
of the Jade Prospect are filled to their P10 potential or better.
All four CNOOC discoveries have gas clouds showing in the
overburden on seismic.
Empyrean's excellent quality 3D seismic indicates that there is
a classic "fill to spill" geological setup in the basin, and a
robust regional seal, that provides the Jade and Topaz Prospects
with a very real possibility of being filled in a similar fashion
to nearby discoveries. The Jade and Topaz prospects both have gas
clouds, similar to nearby discoveries, in the overburden on 3D
seismic. Dry wells nearby do not have gas clouds. The Jade Prospect
is the first of the three identified prospects within Block 29/11,
which also contains the Topaz and Pearl prospects. The combined
audited mean in place potential of all three prospects is 884 MMbbl
and a P10 in place upside of 1,588 MMbbl. The post stack seismic
inversion study showed Jade and Topaz both have the potential for
excellent carbonate buildup reservoir quality with excellent
porosity and permeability. Any oil discovered is expected to be
light oil in the 38-41 API range, similar to nearby discoveries.
These attributes combined with the potential for exceptional
natural reservoir drive supports the potential for excellent
recovery rates.
For further information please contact the following:
Empyrean Energy plc
Tom Kelly Tel: +61 6146 5325
Cenkos Securities plc (Nominated
Advisor and Broker)
Neil McDonald Tel: +44 (0) 131 220 9771
Pete Lynch Tel: +44 (0) 131 220 9772
First Equity Limited (Joint
Broker)
Jason Robertson Tel: +44 (0) 20 7330 1883
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END
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