Perth, June 10, 2008 AEST (ABN Newswire) - Empire Oil & Gas (ASX:EGO)(PINK:EOLGF) Announce an update of the planned drilling of the Gingin West No.1 well on a well location being defined by the April 2008 3D Seismic and a summary of additional gas prospects and leads including the Gingin gasfield, EP 389, onshore Perth Basin, Western Australia.
Empire Oil & Gas N.L. is the Operator of the EP 389 Petroleum Exploration Permit which contains the Gingin Gasfield and plans drilling the Gingin West No. 1 Gas prospect, located approximately 89 kms on the northern outskirts of the city of Perth.
The Company takes this opportunity to provide an update on the natural gas potential of the Gingin West Gas Prospect, the existing Gingin Gasfield and its likely extension southward and other oil and gas prospects and leads within the permit.
The participants in the EP 389 Joint Venture are:
EP 389 Permit Equity----------------------------Empire Oil & Gas N.L. 62.5%Wharf Resources Plc 25%ERM Gas Pty Ltd 12.5%----------------------------
Summary
Following is a brief summary of the discovery gas wells in the EP 389 Permit that flowed gas naturally at economic rates without the requirement of fracture stimulation. The Jurassic aged Cattamarra Coal Measures Sandstone reservoirs are not deemed as "tight gas reservoirs".
The Gingin Gasfield wells, located within EP 389, were discovered by WAPET in 1964 and 1965 respectively. Gingin No. 1 was put on production in 1972 and flowed an average 5 million cubic feet of gas per day (MMCFG/D). Cumulative production was 1.72 billion cubic feet (BCF).
Gingin No. 2, drilled in 1965, tested gas at rates of 3.9 MMCFG/D. The Gingin No. 2 well was put on production but declined after 14 days. It is considered progressive formation damage (blocking) during the test is likely due to the use of a diesel based drilling mud system.
Bootine-1 was drilled by MESA Australia Limited in 1981 with a test flowing gas at a natural rate of 2.25 MMCFG/D from one reservoir sand.
Empire's exploration to date and the planned drilling of Gingin West No. 1
Empire has recorded an aeromagnetic survey over the EP 389 Permit with detail aeromagnetics over the Gingin Gasfield Area. This was followed by recording 333 line kilometers of 2D Seismic in late 1997 and a further 110 km2 was recorded in 1999/2000. A total of 443 kilometres of modern 2D 160 fold seismic has been recorded in the Permit and interpreted together with the reprocessing of all the previous seismic already recorded in the Permit.
Based on seismic interpretation at near the top of the Lower Jurassic Cattamarra Coal Measures, significant areas of structural closures are interpreted at Gingin West, and in the Gingin Gasfield area, Gingin South Lead, Gingin Brook, Eclipse West and Yeal and other leads located along the axis of the Gingin/Bullsbrook Anticline.
Gingin West Gas Prospect
The Company considers the Gingin West Gas Prospect to be the lowest risk. Sand 5 (within Sand Member D of the Cattamarra) tested gas at 2.25 MMCFG/d in the Bootine-1 well. Seismic mapping shows an anticline to the north west of Bootine-1. Based on the current seismic database, this anticline is closed to the south. The gas accumulation in Bootine-1 also indicates that the structure is closed to the south.
Gingin West 45km2 3D Seismic Survey recorded in April 2008
In April 2008, Empire recorded the Gingin West 45km2 3D Seismic Survey to detail the Gingin West structure and a well location at a crestal position updip from Bootine-1 to intersect all 5 sands of the reservoir objective Cattamarra Coal Measures. Potential recoverable reserves are estimated at 212 BCF. These calculations are based on the interpretation that Bootine-1 was drilled at or near the spill point of the structure. The 3D Seismic is currently being processed and the data set will be available to be interpreted by the Company in the 3rd Quarter. The Gingin West Structure is located within a few kilometers of both the Parmelia (Dongara to Pinjarra) and Dampier to Bunbury Gas Pipeline. The Parmelia Pipeline has an existing 'T' piece access (from Gingin No. 1) with Compression Station No. 5 in closer proximity.
Gingin Gasfield Area
Empire drilled the Gingin No. 3 well in 1998, reaching a total depth of 4,200 metres on 24 October 1998. Subsequent seismic recorded and its interpretation demonstrates the well was drilled outside of the bounding fault closure. The Gingin No. 3 well was suspended for future entry and sidetrack. Upon success at the Gingin West No. 1 well, an attractive drilling operation would be to sidetrack the Gingin No. 3 well into the Cattamarra Coal Measure gas sands to the east of the bounding fault containing both the Gingin No. 1 and Gingin No. 2 gas discovery wells.
The potential recoverable gas reserves in the Gingin Gasfield area are estimated to be 200 BCF.
Other Prospects and Leads
There are a number of exciting prospects and leads within the EP 389 Permit which require additional seismic to delineate well locations prior to drilling. Some of these prospects are potentially quite large.
Gingin Brook has the potential to have a volume of gas in place of 633 BCF. Eclipse West has potential recoverable gas reserves calculated at 226 BCF. The Yeal Oil Prospect has the potential to have entrapped up to 25 million barrels of oil.
Markets
The Gingin Gasfield wells of Gingin No. 1 and Gingin No. 2 have flowed naturally at economic rates in the 1960's. An assessment of the reservoir quality of all the wells drilled in the EP389 Permit has demonstrated that these reservoir rocks have sufficient quality to not require any further stimulation to flow at sustained and economic flow rates utilising good drilling practices suitable for these reservoirs.
The proximity of the Gingin West Gas Prospect and the Gingin Gasfield area to pipeline infrastructure in a deregulated gas market place provides the market place with a diversity of supply from North West Shelf gas upon new gas discoveries and their development in the EP 389 Permit.
The economics of developing and selling gas has increased during the year with substantially high natural gas prices being entered into between producers and consumers in Western Australia.
The Company looks forward to providing the interpretation of the recently recorded Gingin West 3D Seismic Survey, the Gingin West drilling location and the drilling timetable.
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