Increased interest -Sugarloaf
Empyrean Energy PLC
10 May 2007
Empyrean Energy PLC
('Empyrean' or the 'Company'; Ticker: (EME))
Increased interest in the Sugarloaf Project Area, ('Sugarloaf') Texas USA
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• New Agreement signed with Texas Crude Energy Inc ('TCEI') covering a
sixteen (16) well program over Block A and Block B
• New working interest on any well in the 16 well program in respect
of Block A
• Working Interest increased from 6% to 18% on any wells in the 16
well program operated by TCEI in respect of Block B
Empyrean has entered an Oil & Gas Exploration And Development
Agreement with TCEI to participate in a new sixteen (16) well
program covering two projects, 'Block A' and 'Block B'.
In Block A, TCEI has an interest through an Operating Agreement with
a major international oil and gas company ('Block A Operator')(name
undisclosed for confidentiality purposes and to preserve and protect
competitive advantage). In Block B, TCEI is the operator and
Empyrean already has a 6% working interest in this Block via a
previous agreement and its participation in the drilling of the
Sugarloaf-1 well.
The new agreement covers the next sixteen (16) wells to be drilled
on either Block A and / or Block B. The agreement provides for
Empyrean to pay 12.5% of costs to first production to earn a working
interest of 7.5% in wells drilled on Block A and to pay 20% of costs
to first production to earn a working interest of 12% in wells
drilled on Block B. Empyrean's agreement covering a pre-existing 6%
working interest in Block B remains unchanged and is in addition to
this new agreement.
The Block A Operator has drilled a first exploratory test well on
Block A and this well is a discovery well which it has been reported
flowed gas and associated condensate on test. This exploratory test
well does not form part of the 16 well program. On Block B, during
the drilling of the Sugarloaf-1 well Empyrean previously reported to
the market on the 29th September 2006 a 92 feet (28 metres) zone of
possible gas pay, interpreted from wire-line logs and gas shows in
Cretaceous age carbonates. Preparations are underway for testing to
be carried out on these possible pay zones.
It is estimated that wells in this program will have a total cost in the
order of US$5million each. Empyrean's agreement with TCEI is structured
on a well by well basis with the right to proceed or withdraw at any
stage. If Empyrean withdraws then wells earned to that date are
protected. It is also understood that the Block A Operator is preparing
for drilling to commence on the next well in Block A within the next 2
months.
A further update will be provided as soon as confirmation of the date for
spudding the first well in this sixteen well program is advised by TCEI,
along with testing dates for the Sugarloaf-1 well.
Commenting today, Empyrean's Commercial Director, Tom Kelly said 'Today's
agreement with Texas Crude Energy allows Empyrean to increase its interest in
the Sugarloaf Project Area and in particular the shallow potential pay zones to
be tested in the Sugarloaf-1 well. We look forward to testing these chalk zones
in the Sugarloaf-1 well and to the commencement of the sixteen well program'.
The information contained in this announcement was completed and reviewed by the
Technical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who has
over 40 years experience as a petroleum geologist.
For further information:
Laurence Read/ Ed Portman
Conduit PR
Tel: +44 (0) 207 429 6605/ +44 (0) 7979955923
Empyrean Energy plc
Tel : +44(0) 207 182 1746
Rod Venables/ Cecil Jordaan
HB Corporate
Tel: +44(0) 207 510 8600
This information is provided by RNS
The company news service from the London Stock Exchange
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