Carpentaria-1 Intersects Liquids Rich Velkerri Shale Gas
Carpentaria-1 Intersects Liquids Rich Velkerri Shale Gas
Sydney, Oct 12, 2020 AEST (ABN Newswire) - Empire Energy Group Limited (ASX:EEG) (OTCMKTS:EEGUF) is pleased to provide shareholders with an operational update on its 100% owned and operated Carpentaria-1 exploration well in EP187, located on the eastern side of the Northern Territory's Beetaloo Sub-basin.

Highlights include:

- Empire has intersected an extensive interval of liquids rich gas in the Velkerri Shale based on mud gas liquids readings

- The proportion of liquids rich gas intersected in the Velkerri dramatically exceeds that of analogue wells previously drilled across the Beetaloo Basin and materially exceeds Empire's pre-drill expectations

- The Velkerri Formation in Carpentaria-1 is nearly 1,000m thick

- The substantial proportions of heavier end, higher value liquid hydrocarbons indicated in the target Velkerri Shale will materially enhance the economics of any future EP187 production because liquid hydrocarbons attract higher oil linked market pricing than dry gas, opening up additional commercialisation options for Empire

- The Velkerri Shale interval in EP187 is shallower than analogue wells in other parts of the Beetaloo Basin with equivalent thickness and gas shows, resulting in reduced drilling costs

- Appraisal of the liquids-rich gas Velkerri Shale targets is planned for early in the 2021 Dry Season including fracture stimulation and flow testing

- A shareholder briefing call will be conducted at 2pm AEDT today. Details can be found below.

Comments from Managing Director Alex Underwood:

We are delighted to announce that we have intersected liquids-rich gas across a thick and contiguous Velkerri Shale section in Carpentaria-1, Empire's first exploration well in its highly prospective Northern Territory petroleum acreage.

This result has pleased the Empire team. In the pre-drill planning we have worked with various seismic interpretations and our 'most likely' model was that we would encounter the Velkerri Shale at greater depth, and that it would tend to drier gas. This had been the experience of the wells drilled across the Beetaloo Basin that have targeted the Velkerri Shale.

The presence of high levels of associated gas liquids in the target shales is encouraging for future commercial production scenarios because high-value liquids from produced gas can significantly enhance economics.

The shallower depths at which we have intersected the Velkerri Shale will reduce development costs in future drilling programs.

We will now further appraise the Velkerri Shale sequences with an extensive formation evaluation program commencing within the week. Fracture stimulation and flow testing is scheduled for Q2 2021, which in the success case will allow Empire to book maiden contingent resources including higher value liquid hydrocarbons not previously expected.

Geological Update

The Velkerri Shale was intersected from 833m MD to 1,831m MD (top of the Upper Velkerri Shale to top of the Bessie Creek Sandstone). This was intersected at a shallower depth than pre-drill prognosis. Such a reinterpretation of stratigraphy is not uncommon in frontier exploration plays with sparse 2D seismic coverage. The nearest control well is more than 60km away.

Background mudlog gas chromatograph readings were elevated across the Velkerri Formation with peak mudlog gas readings over the Middle Velkerri C1 (from ~1,105m MD to ~1,160m MD), Middle Velkerri B (from ~1,320m MD to ~1,372m MD) and Middle Velkerri A (from ~1,490m MD to ~1,544m MD). Strong mud gas readings were also observed in the interval between the Middle Velkerri B and the Middle Velkerri A Shales.

The Velkerri Shale intersected in Carpentaria-1 has comparable thickness to other wells in the Beetaloo Basin including Santos' Tanumbirini-1 vertical well where equivalent elevated gas shows were recorded. Tanumbirini-1 was flow tested across these intervals earlier this year following a vertical fracture stimulation with peak flow rates of over 1.2 mmcf / day which, according to Santos, exceeded initial expectations. Santos' preliminary gas composition analysis reported >90% methane and 3% ethane, indicating relatively dry gas in Santos' work program areas compared to Empire's mudlog recordings indicating liquids-rich gas in Carpentaria-1.

Carpentaria-1 is located within a 40,000-acre (160 km2) fault block that Empire has defined as its Phase 1 Work Program Area. Preliminary post-drill interpretation of Empire's 2019 seismic data which can now be confidently tied to Carpentaria-1 well control demonstrates that Carpentaria-1 is located shallower within the fault block, which dips and deepens to the North West of Carpentaria-1. Given the relatively gentle dip, Empire anticipates that future drilling within the Phase 1 Work Program Area is likely to also encounter liquids rich gas across the Velkerri Formation target shales.

The Kyalla shale interval was a shallow secondary target for Carpentaria-1. Empire's pre-drill subsurface mapping concluded it was restricted to a limited area in the west of EP 187. Drilling has now confirmed that the Kyalla shale is absent at the Carpentaria-1 location. Empire's pre-drill petroleum volumetrics estimates suggested that, if present at Carpentaria-1, the Kyalla shale would host a modest incremental prospective resource compared with the primary Velkerri shale target. This view was supported by Netherland, Sewell and Associates, Inc. ('NSAI') in its prospective resource report announced by Empire on 18th May 2020. NSAI attributed only 0.5% of total best estimate prospective resource across Empire's Northern Territory properties to the Kyalla Shale.

Operational Update

As at 3pm AEDT on Sunday 11th October, 2020, Empire is currently drilling ahead as planned in the 8 1/2" hole at a depth of 1,907m MD.

Given that Empire has intersected the target formations at shallower depths than initially predicted, we currently expect the final depth of the well will be reduced to ~2,200m MD, approximately 700m shallower that the pre-drill planned target depth.

Once the well reaches its final depth, an extensive formation evaluation program will be executed including logging, large diameter rotary sidewall coring and DFITs.

The well will then be cased, cemented, and suspended in preparation for re-entry after the Wet Season and the rig demobilised. The Empire team will continue preparing for the appraisal fracture stimulation and flow testing program in 2021.

Shareholder Briefing Conference Call

Empire's Managing Director, Alex Underwood, will host a conference call at 2pm AEDT today to update shareholders, investors and analysts on the drilling program results to date and forward plan. For those who are unable to attend, a recording of the call will be made available on Empire's website.

Access to the conference call is available by clicking on this link:
https://webcast.openbriefing.com/6623/

To view the Macquarie SMID Oil & Gas Day Presentation, please visit:
https://abnnewswire.net/lnk/A5C601F5


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.

 


Contact

Empire Energy Group Ltd
E: info@empiregp.net
T: +61-2-9251-1846
F: +61-2-9251-0244
WWW: www.empireenergygroup.net



Related Companies

Empire Energy Group Ltd

ABN Newswire This Page Viewed: