Empyrean Energy Ups Stake in California Project
Empyrean Energy Plc announced it has increased its working interest in the Eagle Oil Pool Development Project in the San Joaquin Basin, California to 57.2126 percent.
The increase in working interest has resulted from previous partner FAR Limited deciding to surrender its interest. FAR Limited has stated the reason for surrendering its interest in the Eagle Oil Pool Development Project along with another non-core asset is to focus operations and exploration efforts on its African assets. There is no direct cost associated with the additional working interest other than the nominal costs of assignment and recording. Empyrean will pay a proportionately higher share (57.2126 percent) of future joint venture costs.
An independent expert has estimated that the Eagle Oil Pool Development Project could contain a P50 (probability 50 percent unrisked) reserve of 7.1 million barrels of recoverable oil and 12.3 billion cubic feet of associated gas, with the P10 assessment estimated at 22.7 million barrels of oil and 22.7 billion cubic feet of associated gas. The Project is a structural-stratigraphic trap play targeting the Eocene aged Gatchell sands. The Project covers approximately 5,160 gross acres with a discovered yet undeveloped oil accumulation. The operator of the Project is TSX-V and ASX-listed Strata X Energy, of Denver, Colorado.
Recent exploration efforts by operators nearby to the Project have targeted other formations including the Kreyenhagen Shale and Monterey Shale. These exploration efforts are being monitored by Strata X Energy to determine if targets in addition to the Gatchell sands should be included in future exploration and testing efforts. The Company currently believes, based on existing results and data, that the Gatchell sands remain the priority target for future testing with potential for the Monterey Shale to be included as a secondary objective. Stratigraphic trap plays such as the Eagle Ford Shale play in Texas, within which the Company's Sugarloaf Project is situated, have become highly sought after in the USA due to modern day advancements in drilling and completion technology. These advancements have allowed unconventional hydrocarbon plays to achieve highly valued production from formations that were previously thought to be either too technically difficult or too expensive to develop.
Strata X Energy has indicated that a vertical well test of the Gatchell sands has merit, subject to the results of nearby exploration wells. Further discussions need to take place with Strata X Energy before any future operational plans are finalized.
"This increased working interest at the Eagle Oil Pool Development Project gives Empyrean greater leverage and flexibility in the project. Given the renewed activity in the San Joaquin Basin we are happy to have been able to add significantly to our working interest in the project at essentially no cost," Empyrean CEO Tom Kelly said.
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