TIDMEME
RNS Number : 4962J
Empyrean Energy PLC
14 April 2020
This announcement contains inside information
Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil &
Gas
14 April 2020
Empyrean Energy PLC ("Empyrean" or the "Company")
Resource Upgrade of Mako Gas Field at Duyung PSC, Indonesia
Empyrean Energy plc ("Empyrean or Company"), the oil and gas
development company with interests in China, Indonesia and the
United States, is pleased to announce an upgrade of resource
estimates for the Mako gas field, which forms part of Duyung PSC in
the West Natuna basin, offshore Indonesia (the "Mako gas field").
The resource update has been prepared internally by the operator of
the Mako gas field, Conrad Petroleum Ltd ("Conrad"), and follows a
highly successful appraisal drilling campaign in Q4 2019 at the
Mako gas field, which saw the Tambak-1 and Tambak-2 wells
demonstrate the presence of well-developed, high quality reservoir
sandstones with a common gas water contact across the Mako
structure. A previous, post-discovery and pre-appraisal drilling,
independent resource assessment was completed by Gaffney Cline
& Associates ("GCA") and released in January 2019 (the "2019
GCA Assessment").
The partners in the Duyung PSC are Conrad (76.5%), Coro Energy
plc (15%) and Empyrean (8.5%) (together the "Duyung PSC
Partners")
Highlights
-- Gross (full field) 1C (Contingent) Resource estimate of 323
Bcf of recoverable raw gas, representing an increase of 76% on the
pre appraisal estimate of 184 Bcf in the 2019 GCA Assessment
-- Gross (full field) 2C (Contingent) Resource estimate of 493
Bcf of recoverable raw gas, representing an increase of 79% on the
pre appraisal estimate of 276 Bcf in the 2019 GCA Assessment
-- Gross (full field) 3C (Contingent) Resource estimate of 666
Bcf of recoverable raw gas, representing an increase of 70% on the
pre appraisal estimate of 392 Bcf in the 2019 GCA Assessment
-- Appraisal drilling in Q4 2019 confirmed the presence of
thicker and better quality reservoir with a gas water contact
measured (from electric logs) to be 5 ft deeper than previous
contact that was estimated from pressure data
-- Revised development scenarios are under review that may be
able to achieve a plateau production rate of 150 MMscf/d, which is
up from the previously modelled 44 MMscf/d
Tom Kelly, CEO of Empyrean, commented:
"The success of the appraisal drilling program at the Mako gas
field last December has resulted in an outstanding uplift in
contingent resources across all categories. The implications of a
thicker and better quality reservoir with a gas water contact 5 ft
deeper than previously assumed has not only been the driver for the
resource uplift but has also had a particularly positive impact on
potential development scenarios with up to a 150MMscf/d plateau
production rate now being modelled. Obviously, we are in an
extremely challenging macro environment; however, we are extremely
pleased to see that the fundamental technical aspects of this
project have, with excellent planning and a very well thought out
and executed appraisal drilling program, become more robust.
Despite global oil prices being significantly depressed, it is
worth noting that this project is high quality methane gas that
will ultimately be supplied to the Singapore/ Indonesia region
where the longer term demand for energy and in particular methane
gas is forecast to grow. We look forward to updating shareholders
on the Gaffney Cline report in due course ."
Internal resource assessment of the Mako gas field, Offshore
Indonesia
Following the highly successful appraisal drilling campaign on
the Mako gas field in Q4 2019, which saw the Tambak-1 and Tambak-2
wells demonstrate the presence of well developed, high quality
reservoir sandstones with a common 5ft deeper gas water contact
(measured from electric logs) across the Mako structure, the
operator, Conrad has updated its internal resource estimate of the
Mako field.
Gaffney Cline and Associates ("GCA") have also been commissioned
by the operator on behalf of the Duyung PSC partners to update its
view of the Mako field. The operator has advised that, despite the
movement and travel restrictions affecting all parties involved,
all efforts are being made to ensure that GCA delivers its report
in a timely fashion.
Both the internal estimate and the still-to-be-finalised GCA
analysis use new data acquired from the Q4 2019 appraisal drilling
programme, including the drill stem test at Tambak-1, which flowed
at 11.4 MMscf/d.
The internally updated resource estimates are shown in the table
below:-
Contingent Resource Gross 100% Field Gross 100% Field Increase
Estimates (2019 GCA Assessment) (Conrad - 2020)
Bcf Bcf %
----------------------- ----------------- ---------
1C (Low Case) 184 323 76
----------------------- ----------------- ---------
2C (Mid Case) 276 493 79
----------------------- ----------------- ---------
3C (High Case) 392 666 70
----------------------- ----------------- ---------
The Mako gas field is an extremely large, shallow structural
closure of over 350km(2). The reservoir is a Pliocene-age
sandstone, with a gas-water contact at approximately 391m true
vertical depth sub-sea. The field has excellent seismic definition
with direct hydrocarbon indicators being very evident.
Having been drilled but not tested by prior operators of the
acreage, the commercial viability of the Mako gas field was
demonstrated by the Mako South-1 well drilled by Conrad and
Empyrean in 2017. The well was drilled to core and test the Mako
reservoir, flowing up to 10.8 MMscf/d of dry gas on test.
The Mako field is located close to the West Natuna pipeline
system and gas from the field can be marketed to buyers in both
Indonesia and in Singapore. A heads of agreement ("HOA") with a gas
buyer in Singapore is already in place. Approval of a Plan of
Development by the Indonesian Authorities and the conclusion of a
gas sales agreement ("GSA") will mark an important step toward the
final investment decision to develop and commercialise the
field.
The full field resources above are classified as "contingent"
since, for example, no GSA has been signed and a Final Investment
Decision ("FID") has not yet been taken. However, the HOA is a
definitive step on the path to executing a GSA, a definitive gas
sales document detailing all the terms regarding the sale of all
Mako gas to Singapore.
The information contained in this announcement has been reviewed
by Empyrean's Executive Technical director, Gaz Bisht, who has over
30 years' experience as a hydrocarbon geologist and
geoscientist.
**ENDS**
For further information:
Empyrean Energy plc
Tom Kelly Tel: +61 8 9380 9920
Cenkos Securities plc
Neil McDonald Tel: +44 (0) 131 220 9771
Pete Lynch Tel: +44 (0) 131 220 9772
St Brides Partners Ltd
Priit Piip Tel: +44 (0) 20 7236 1177
Frank Buhagiar Tel: +44 (0) 20 7236 1177
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END
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