Empyrean Energy Updates On Sugarloaf Project In Texas
Published: 19-Nov-2009
Empyrean Energy Plc (Empyrean Energy) has provided an update on Sugarloaf project. The detailed planning for the fracture stimulation of each of the three horizontal wells has now been completed. The operator of the Sugarloaf project, Texas Crude Energy Inc, intends to carry out multi-staged fracture stimulations along the horizontal section of each of the Kennedy-1H, Kowalik-1H and Weston-1H wells.

Each stage will be individually hydraulically stimulated using a design that has proved effective elsewhere in the play, that stage is then isolated and the process repeated further up the liner. At Kowalik-1H, where it was not possible to recover the slotted liner, the slotted section will be stimulated with a single larger treatment and the conventional solid section of the liner will be treated in a similar fashion to the other two wells. Once treated, the wells will be brought on line to sales.

Each well has now been prepared with the production tubing being pulled at Kennedy -1H and Kowalik-1H. The horizontal liners of all three wells are presently being washed out and clean water left behind ahead of the stimulations.

At Weston-1H, production facilities are being installed, including a pipeline connection to the Kennedy-1H location to utilize the existing tie-in to a major export gas pipeline.

Progress to date and the availability of equipment indicates that the likely start of the fracture operations will be during December 2009. Each stimulation will take approximately 10 - 14 days. A further announcement will be made when these operations commence.

Following the successful farm-out to Hilcorp Energy, Empyrean Energy retains the following working interests (WI) in Block B wells:

Kennedy-1H - 9% WI, Kowalik-1H - 10.2% WI, Weston-1H 3% WI, Future Block B wells - 3% WI.

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Interim Results

RNS Number : 6288D
Empyrean Energy PLC
04 December 2009




4 December 2009


Empyrean Energy Plc

("Empyrean" or the "Company"; Ticker: (EME))


Interim Results for the six months ended 30 September 2009



Empyrean today announces its unaudited interim results for the period ended 30 September 2009.


Please find below the Chairman's and Technical Director's statement and the interim accounts.




Contact


Tom Kelly Empyrean Energy Plc Tel: +61 8 93216988


Nominated Adviser and Broker:


Jerry Keen Astaire Securities Plc Tel: +44 (0) 20 7448 4400

Shane Gallwey Astaire Securities Plc Tel: +44 (0) 20 7448 4400




CHAIRMAN'S AND TECHNICAL DIRECTORS STATEMENT


Chairman's Introduction


I am pleased to be able to report that the first half of this year has again been a period of growth for Empyrean Energy Plc ("Company" or "Empyrean"). In an eventful six months the Company raised 2.44 million in three placings, one above the market price at the time. Half of the Company's holdings in Block B of the Sugarloaf project were successfully farmed out to Hilcorp Energy Company, a major US private company with extensive operating experience in the region. This move endorsed our view of the potential value of the asset, generated new development momentum and provided Empyrean with free carriage on the drilling of three new wells and the fracture stimulation of three existing wells.


The farmout of Block B has freed Empyrean to focus on other high impact projects, in particular and as reported at the AGM, enabled us to secure a 10% share of the Riverbend Project, which has enormous potential. In a separate exciting development, the Eagle Oil Pool Development Project has emerged from limbo with the purchase by R & M Oil and Gas Ltd of Victoria Petroleum USA Inc, the project's operator. The new operators have already prepared ambitious plans to move this project forward, and Empyrean Energy owns a 48.5% share.


The following technical report provides more detail on all six of the projects in which Empyrean is currently engaged.



Technical Overview


Empyrean is at present involved in five projects, four of which are located onshore USA.


The focus of Empyrean's efforts continues to be directed towards the highly sought after Austin Chalk play, onshore Texas.


Empyrean had originally pursued the Austin Chalk play by farming into Blocks A and B through Texas Crude Energy Inc ("TCEI"). These blocks fall within the boundaries of the Sugarkane gas and condensate field. On 5 May 2009 Empyrean announced that it had entered into a further arrangement with TCEI to seek a farm-out of up to half of its 6% interest in Block B. This arrangement did not include or affect Empyrean's interest in the 5 wells it had participated in on Block A. On 21 September 2009 the farm-out was confirmed. The terms of the farm-out result in Empyrean being free carried for the drilling , completion and tie in of up to 3 new horizontal wells (the preferred option in these types of limestone reservoirs) and the stimulation of the 3 existing, horizontal Sugarloaf wells, namely Kennedy- 1H, Kowalik-1H and Weston -1H. The farmee, Hilcorp Energy Company, is the 4th largest private oil and gas exploration & production company in the USA and has an annual production of 15.8 million barrels of oil equivalent.


The farmout of Block B at Sugarloaf has not affected Empyrean's interest in the five wells that it has participated in on Block A.


On 1 June 2009 Empyrean announced its participation in an additional and entirely separate Austin Chalk project in the Tyler and Jasper counties onshore Texas. The project area lies south of the prolific Brookeland Field and southeast of the Woodbine Field. Empyrean will earn a 10% interest in the Riverbend Project from Krescent Energy Company LLC ("Krescent") by participating in the re-entry and horizontal drilling and testing of the Quinn 3-H well which had originally been suspended when higher than normal pressures were encountered while drilling.


The Quinn 3-H well was re-entered on 2 September 2009 and reached a total depth of 16,641 feet (measured depth on 13 November 09) with encouraging gas shows (100 feet flares) and fracture zones being encountered while drilling the horizontal section. The well is at present being prepared for production testing. A sales pipeline is already connected to the site.


This Participation Agreement with Krescent is particularly important as the Riverbend Project has an estimated recoverable reserve potential of 800 billion cubic feet of gas equivalent. Furthermore, Empyrean will then pay 13.33% of costs to earn a 10% interest in the second, third and optional fourth well before paying 10% on any further wells thereafter located within the AMI of approximately 50,000 acres.


Onshore California, the Eagle Oil Pool Development Project in which Empyrean has a 48.5% interest has had no further field work done since the drilling of Eagle North-1. On 18 September 2009 Empyrean announced that R&M Oil & Gas Ltd had acquired the interests of the previous operator, Victoria Petroleum USA Inc., and was in the process of re-vitalising the project.


Acquisition of 20 square miles of 3D seismic will evaluate the potential of two shallower zones of interest in addition to the primary target Gatchell Sands which have already tested oil.


Elsewhere the Glantal Gas Project in Germany has had no further work performed since the drilling of Glantal-1. Further seismic acquisition will be required before any drilling can be carried out on the Lautertal Prospect located to the northeast of Glantal.

Financials


The unaudited results for the six months to 30 September 2009 reports oil and gas revenue of 182,000 (30 September 2007: 575,000) and a loss before tax of 518,000 (30 September 2008: 427,000).


Net exploration expenditure of 1,301,000 (30 September 2008: 1,538,000) during the six months has been capitalised, which predominately relates to participation in the Riverbend Project. Further expenditure was also incurred in relation to lease commitments and drilling programmes at the Sugarloaf Project.

During the six months, Empyrean completed three placements of 55,666,668 ordinary shares to institutions, raising 2,440,000 before expenses.

Outlook


The enormous potential reserves in the Riverbend project, together with the very large flares encountered during drilling, provide the foundations for our confidence in continued rapid growth for the company. These prospects are further enhanced by the renewed development of the Eagle project which showed evidence of substantial oil reserves when first drilled in 2006.


With a portfolio of additional projects already identified and being evaluated, the Company's expansion will continue to be pursued with vigour, and as rapidly as the global economic conditions will permit.

You were posting yesterday as oilandgasman..what happened william ?

and newsflash

Goes through about 500 names a year with these pump and dumps.

Used to post as "theresearcher", think people need to be warned, so many
of them end up suspended, he is bad news.

11 MINS AGO RAPID GROWTH
http://proactiveinvestors.co.uk/companies/news/11001/empyrean-energy-confident-in-continued-rapid-growth-11001.html Friday, December 04, 2009
Empyrean Energy confident in continued rapid growth
company news image

Empyrean Energy PLC (AIM: EME) reported results for the first half to end-September 2009, a period in which it raised 2.44 million in three placings and farmed out half its holding in the Sugarloaf gas and condensate project in Texas, freeing it to focus on other high impact projects.

It secured a 10 percent share of the Riverbend gas project in Texas, which it believes has enormous potential, from Krescent Energy Company LLC. This, together with the very large flares encountered during drilling at Riverbend, provide the foundations for our confidence in continued rapid growth for the company, it said.

Also during the period, the Eagle Oil Pool development project in California emerged from limbo with the purchase by R & M Oil and Gas Ltd of Victoria Petroleum USA Inc, the project's operator. The new operators have already prepared ambitious plans to move this project forward, and Empyrean Energy owns a 48.5 percent share.

Oil and gas revenue was lower at 182,000 compared with 575,000 in the previous first half, while pretax loss widened somewhat to 518,000 from 427,000 a year earlier.

Empyrean is at present involved in five projects, four of which are located onshore US.

At Riverbend, the Quinn 3-H well was re-entered on September 2 2009 and reached a total depth of 16,641 feet with encouraging gas shows and fracture zones being encountered while drilling the horizontal section. The well is at present being prepared for production testing. A sales pipeline is already connected to the site. The Riverbend project has an estimated recoverable reserve potential of 800 billion cubic feet of gas equivalent. Furthermore, Empyrean will then pay 13.33 percent of costs to earn a 10 percent interest in the second, third and optional fourth well before paying 10 percent on any further wells thereafter.

At Eagle Oil Pool, acquisition of 20 square miles of 3D seismic will evaluate the potential of two shallower zones of interest in addition to the primary target Gatchell Sands which have already tested oil.

Elsewhere the Glantal gas project in Germany has had no further work performed since the drilling of Glantal-1. Further seismic acquisition will be required before any drilling can be carried out on the Lautertal Prospect located to the northeast of Glantal, Empyrean added.

http://www.investegate.co.uk/Article.aspx?id=200912230823006168E

cyril

Empyrean is pleased to report that it has been advised by the operator, Texas Crude Energy Inc (TCEI), that fracture stimulation operations on the Kowalik-1H well commenced on 28 December 2009, with the stimulation of approximately 3,800 feet of the slotted liner section presently underway.

Following stimulation of this section with a single large treatment, the remaining 850 ft of conventional solid liner will be treated in four stages with an isolation plug between each one.

This program is anticipated approximately 7-14 days to complete following which the well will be cleaned up, completed for production and flowed to sales.

Further updates will be provided as significant developments occur.
cyril

From an oil expert via another board,

I think it is better than 'commencement', they must have successfully completed stage 1 or why report it 2 days later. This is significant and means they have the frac design right.
After all these fracs do not expect instant results as with all that fluid in the well it will take quite a time to clean up. But IF the well does start to clean up well after fracs then that will effectively tell us all we want and need to hear. imho.
cyril

Kowalik #1H Fracture Stimulation Program

Adelphi Energy Limited (Adelphi) provides the following update on the fracture stimulation operations at the Kowalik #1H well:
As previously reported the pumping operations commenced on 28 December 2009 (US CST)with the first stage comprising of four phases targeting the horizontal 3,800 ft of slotted liner.

After 22 hours of continuous pumping and during the fourth phase of the stimulation program an anomalous pressure drop was noted and operations were suspended to allow further investigation. At this point the first three phases had been successfully completed with over 80% of the planned fluids for this stage having been pumped with encouraging real time indicators of the stimulation.

Following the investigation the Operator has elected to run a tie back string of 5 casing from the top of the liner to surface. Thereafter an isolation plug, which has been set in the liner as part of the investigation, will be removed and the well flowed to surface.

The fracture equipment has demobilised and a rig is now moving on to location to carry out the abovementioned work. It is presently estimated that the Kowalik well will be flowed to production in 1-2 weeks.

First New Well Under Farmin Agreement

Preparations and planning is now underway for the first farmin well at Sugarloaf, the Easley#1H well, which will be located approximately 2km to the north east of the Weston #1H well.

As previously reported, this well is expected to be spudded during the month of January 2010.
-----------------------------
cyril

Fracc engineers thoughts on pressure drop.

They had an anomolous pressure drop during fracing : Probably the seal between the liner and the upper casing failed or fluid got past it somehow.

Tie back liner: to get round the above problem simply, and have a high pressure production string. (Note: they are expecting high pressure)

Isolation plug in liner: put in place so they can pressure test liner/casing seal to confirm problem.

Stimulation indicators: By observing the pressure changes during fraccing and the close-in pressures afterwards they can tell if the frac is succesful and the reservoir pressures are maintained etc.

All good IMHO apart from small problem with pressure drop easily fixed. Will take some while to clean up I expect, BUT they are expecting it to clean up and at some pressure, which can only mean one thing imho.

SP dropped 20&(ASX)before recovering.
cyril

Still some work to do but,

5.68 million cubic feet of gas/day and 415 b of condensate in total using conversion factor equals 10.65 million cubic feet of gas/day.
cyril

Sugarloaf well flowing gas, says Empyrean
Business Financial Newswire
The fracture stimulation of the Weston-1H well on the Sugarloaf project in Texas was successful and it is flowing gas and condensate to sales, Empyrean Energy said today (24 February).

Empyrean said it had been advised by the operator, Hilcorp Energy, that the average production rate over the first five days was 5.68 million cubic feet of gas per day and 414 barrels of condensate per day.
cyril