EEGUF - Empire Energy Group Ltd (EEGUF) Material Beetaloo Resource Upgrade
Sydney, Australia (ABN Newswire) - Empire Energy Group Limited (ASX:EEG) (OTCMKTS:EEGUF) is pleased to advise shareholders that Netherland, Sewell & Associates, Inc. ("NSAI") has prepared an updated independent resource report for Empire's 100% owned and operated EP187 tenement located in the Beetaloo Sub-basin, Northern Territory, utilising the technical results of the Carpentaria-1 drilling program.
Highlights
Empire's best estimate prospective gas resource for EP187 has increased by 47% to 3.5 TCF
- Empire has booked a maiden best estimate prospective condensate resource of 27 million barrels
- Empire has booked a maiden best estimate contingent gas resource of 41 BCF in the immediate vicinity of the Carpentaria-1 well location
- Empire has received Northern Territory Government approvals to carry out hydraulic stimulation and flow testing of the vertical Carpentaria-1 well
- Tendering for the hydraulic stimulation and flow testing is well advanced, with operations expected to commence in Q2 2021
- The program will be fully funded from existing cash at bank
- Current cash balance is A$12.3 million
Comments from Managing Director Alex Underwood:
The NSAI report, which incorporated the results of our drilling program, updated petrophysical understanding gained from the W.D. Von Gonten & Co core analysis, and comparison of our results to key wells drilled by other operators across the Beetaloo Sub-basin, demonstrates that our EP187 contains significant resource potential, particularly for a company of our size.
The increased prospective gas resource volumes, maiden assessment of valuable liquid hydrocarbons, and maiden booking of contingent gas resources in the vicinity of Carpentaria-1 validate the decision we made to drill Carpentaria-1 last year amid challenging economic conditions.
Since that time, market conditions for the energy sector have improved materially, and the important role of gas in the energy transition has been a focus of the Australian Government which is actively supporting the development of the Beetaloo Sub-basin.
We look forward to commencing the fully funded and approved flow testing program at Carpentaria-1 to assess which zones within the Velkerri Formation are likely to provide the optimal flow rates and gas / liquids contributions.
While we prepare for this program, we are also continuing to advance opportunities to commence commercial production utilising existing infrastructure and markets.
Updated NSAI Report
The independent resource assessment for Empire's 100% owned and operated EP187 permit was prepared by NSAI, a worldwide leader of petroleum property analysis to industry, financial organisations and government agencies.
Following completion of the evaluation program of the Carpentaria-1 well core and wireline data by W. D. Von Gonten & Co. in Houston, Texas, NSAI has incorporated the analyses and interpretations into its independent resource assessment for Empire's EP187 permit.
The reservoir properties and shale pay thickness exceeded pre-drill expectations for Carpentaria-1, which has driven material increases in assessed gas and now condensate resources.
Empire's shales in the target Velkerri Formation are both thicker and contain more liquid hydrocarbons than expected prior to drilling. Furthermore, an additional interval, which we are referring to as the Intra A-B, was identified immediately adjacent to the target Velkerri Formation A and B shales.
NSAI has assessed a best estimate condensate (C5 and greater) prospective resource of 27 million barrels. Assessment of Natural Gas Liquids (C2 to C4) will require further gas analysis (post-flow testing) and those volumes are included in the best estimate prospective gas resource for the purpose of the updated independent assessment.
NSAI's analysis was restricted to Empire's current operations in EP187 and did not incorporate further assessment of Empire's northern properties targeting the Barney Creek or other McArthur Basin shale targets. The Kyalla Shale was deemed to be too shallow or not present in EP187 and so has been reduced to zero for prospective resource assessment.
The results of the NSAI EP187 report have been summarised by Empire in the table below. A detailed summary of the NSAI contingent and prospective resource estimates can be found at Appendix A*.
The Carpentaria area and Carpentaria East area were assessed by NSAI utilising a depth cut-off of 1000 metres below ground level, which reflects the likely depth below which commercial hydrocarbons may be recoverable in future development scenarios.
Maiden Contingent Resource Assessment
Empire has booked contingent resources in EP187 for the first time in the immediate vicinity of the Carpentaria-1 well location, utilising the technical results of the Carpentaria-1 well and comparison of those results to analogue wells in the Beetaloo Basin which have flowed gas to surface, including Origin's Amungee NW-1H horizontal well and Santos' Tanumbirini-1 vertical well.
The 2C contingent resource assessment represents hydrocarbon recovery from three (3) horizontal production well locations defined as 'blocks' which are 500m across and 2km long, which represents the assessed area of hydrocarbon recovery from 2km lateral wells into the target formations in future commercial development scenarios. The 3C contingent resource assessment represents hydrocarbon recovery from five (5) horizontal production well locations, two (2) of these locations being in addition to the 2C contingent resource blocks.
Based on this methodology, the 2C area is a total of 3km2 and the 3C area is a total of 5km2. As detailed above, this represents only a small percentage of the total prospective area within EP187.
The key contingencies that presently prevent the booking of proved and probable reserves are demonstration of the economic viability of the project development, successful completion of work program commitments on the leases and commitment to develop the resources.
As Empire works to address these contingencies, our focus is on seeking to establish that the target formations can flow at commercial rates and building commercialisation opportunities for Empire's gas and liquids resources.
Carpentaria-1 Vertical Hydraulic Stimulation and Flow Testing Update
Empire's EP187 Environment Management Plan ("EMP") for the hydraulic stimulation and flow testing of the vertical Carpentaria-1 well was approved by the Northern Territory Government on 16 February 2021. The EMP will remain active for five years from the date of approval.
The tendering process is well advanced for services and ordering long-lead items in preparation for hydraulic stimulation and production flow testing of the vertical Carpentaria-1 well.
The program will be fully funded from existing cash at bank.
Empire expects to commence field operations in Q2 2021.
*To view tables and figures, please visit:
https://abnnewswire.net/lnk/4UA8XNI7
Highlights
Empire's best estimate prospective gas resource for EP187 has increased by 47% to 3.5 TCF
- Empire has booked a maiden best estimate prospective condensate resource of 27 million barrels
- Empire has booked a maiden best estimate contingent gas resource of 41 BCF in the immediate vicinity of the Carpentaria-1 well location
- Empire has received Northern Territory Government approvals to carry out hydraulic stimulation and flow testing of the vertical Carpentaria-1 well
- Tendering for the hydraulic stimulation and flow testing is well advanced, with operations expected to commence in Q2 2021
- The program will be fully funded from existing cash at bank
- Current cash balance is A$12.3 million
Comments from Managing Director Alex Underwood:
The NSAI report, which incorporated the results of our drilling program, updated petrophysical understanding gained from the W.D. Von Gonten & Co core analysis, and comparison of our results to key wells drilled by other operators across the Beetaloo Sub-basin, demonstrates that our EP187 contains significant resource potential, particularly for a company of our size.
The increased prospective gas resource volumes, maiden assessment of valuable liquid hydrocarbons, and maiden booking of contingent gas resources in the vicinity of Carpentaria-1 validate the decision we made to drill Carpentaria-1 last year amid challenging economic conditions.
Since that time, market conditions for the energy sector have improved materially, and the important role of gas in the energy transition has been a focus of the Australian Government which is actively supporting the development of the Beetaloo Sub-basin.
We look forward to commencing the fully funded and approved flow testing program at Carpentaria-1 to assess which zones within the Velkerri Formation are likely to provide the optimal flow rates and gas / liquids contributions.
While we prepare for this program, we are also continuing to advance opportunities to commence commercial production utilising existing infrastructure and markets.
Updated NSAI Report
The independent resource assessment for Empire's 100% owned and operated EP187 permit was prepared by NSAI, a worldwide leader of petroleum property analysis to industry, financial organisations and government agencies.
Following completion of the evaluation program of the Carpentaria-1 well core and wireline data by W. D. Von Gonten & Co. in Houston, Texas, NSAI has incorporated the analyses and interpretations into its independent resource assessment for Empire's EP187 permit.
The reservoir properties and shale pay thickness exceeded pre-drill expectations for Carpentaria-1, which has driven material increases in assessed gas and now condensate resources.
Empire's shales in the target Velkerri Formation are both thicker and contain more liquid hydrocarbons than expected prior to drilling. Furthermore, an additional interval, which we are referring to as the Intra A-B, was identified immediately adjacent to the target Velkerri Formation A and B shales.
NSAI has assessed a best estimate condensate (C5 and greater) prospective resource of 27 million barrels. Assessment of Natural Gas Liquids (C2 to C4) will require further gas analysis (post-flow testing) and those volumes are included in the best estimate prospective gas resource for the purpose of the updated independent assessment.
NSAI's analysis was restricted to Empire's current operations in EP187 and did not incorporate further assessment of Empire's northern properties targeting the Barney Creek or other McArthur Basin shale targets. The Kyalla Shale was deemed to be too shallow or not present in EP187 and so has been reduced to zero for prospective resource assessment.
The results of the NSAI EP187 report have been summarised by Empire in the table below. A detailed summary of the NSAI contingent and prospective resource estimates can be found at Appendix A*.
The Carpentaria area and Carpentaria East area were assessed by NSAI utilising a depth cut-off of 1000 metres below ground level, which reflects the likely depth below which commercial hydrocarbons may be recoverable in future development scenarios.
Maiden Contingent Resource Assessment
Empire has booked contingent resources in EP187 for the first time in the immediate vicinity of the Carpentaria-1 well location, utilising the technical results of the Carpentaria-1 well and comparison of those results to analogue wells in the Beetaloo Basin which have flowed gas to surface, including Origin's Amungee NW-1H horizontal well and Santos' Tanumbirini-1 vertical well.
The 2C contingent resource assessment represents hydrocarbon recovery from three (3) horizontal production well locations defined as 'blocks' which are 500m across and 2km long, which represents the assessed area of hydrocarbon recovery from 2km lateral wells into the target formations in future commercial development scenarios. The 3C contingent resource assessment represents hydrocarbon recovery from five (5) horizontal production well locations, two (2) of these locations being in addition to the 2C contingent resource blocks.
Based on this methodology, the 2C area is a total of 3km2 and the 3C area is a total of 5km2. As detailed above, this represents only a small percentage of the total prospective area within EP187.
The key contingencies that presently prevent the booking of proved and probable reserves are demonstration of the economic viability of the project development, successful completion of work program commitments on the leases and commitment to develop the resources.
As Empire works to address these contingencies, our focus is on seeking to establish that the target formations can flow at commercial rates and building commercialisation opportunities for Empire's gas and liquids resources.
Carpentaria-1 Vertical Hydraulic Stimulation and Flow Testing Update
Empire's EP187 Environment Management Plan ("EMP") for the hydraulic stimulation and flow testing of the vertical Carpentaria-1 well was approved by the Northern Territory Government on 16 February 2021. The EMP will remain active for five years from the date of approval.
The tendering process is well advanced for services and ordering long-lead items in preparation for hydraulic stimulation and production flow testing of the vertical Carpentaria-1 well.
The program will be fully funded from existing cash at bank.
Empire expects to commence field operations in Q2 2021.
*To view tables and figures, please visit:
https://abnnewswire.net/lnk/4UA8XNI7
About Empire Energy Group Ltd:
Empire Energy (ASX:EEG) (OTCMKTS:EEGUF) holds over 14.5 million acres of highly prospective exploration tenements in the McArthur and Beetaloo Basins, Northern Territory. Work undertaken by the Company since 2010 demonstrates that the Eastern depositional Trough of the McArthur Basin, of which the Company holds 80% has very considerable conventional and unconventional hydrocarbon potential. The Beetaloo sub-Basin, in which Empire holds a substantial position, has independently assessed world class hydrocarbon volumes in place with a major ramp up in industry activity underway to appraise substantial discoveries already made by major Australian oil and gas operators.
Empire Energy is an experienced conventional oil and gas producer with operations in the Appalachia region (New York and Pennsylvania). Empire has been successfully developing and producing oil and gas since 2006.
Source:
Empire Energy Group Ltd
Contact:
Empire Energy Group Ltd
E: info@empiregp.net
T: +61-2-9251-1846
F: +61-2-9251-0244
WWW: www.empireenergygroup.net