Empyrean Sees Upgrade to Eagle Ford Shale Asset

U.S. onshore-focused junior oil firm Empyrean Energy reported Wednesday a major upgrade to its reserves and resources at its Sugarloaf AMI asset in the Eagle Ford Shale in Texas.

The project, in which Empyrean Energy, has had its proven reserves upgrade by 63 percent to 5.8 million barrels of oil equivalent, while its probable reserves were upgraded by 130 percent to 6.9 million boe.

Empyrean said that the increased reserves were attributable to the successful appraisal of the Austin Chalk and a shift from contingent resource status to reserve status. There are currently 231 wells in production at Sugarloaf AMI, with 54 drilled wells undergoing completion operations. 

Empyrean CEO Tom Kelly commented in a company statement:

"These are fantastic improvements to our reserves and resources. As anticipated, further appraisal and drilling of the overlying Austin Chalk wells along with continued success from optimization initiatives in the Eagle Ford Shale and Austin Chalk collectively have resulted in a very substantial increase in our reserves position at the Sugarloaf AMI.
"We anticipated a shift from contingent resources to reserves as further Austin Chalk wells were drilled and appraised. The excellent development rate during 2014 and, in particular, closer well spacing assumptions have resulted in assisting this conversion from contingent resource to reserves and an improvement in the volumes.
"Excellent upside potential from the relatively new productive zone, the Upper Eagle Ford formation, has now been identified by Marathon for further drilling and appraisal. The Upper Eagle Ford is already producing from a small number of wells and further pilot wells are already planned to test this productive zone.
"Although the fall in oil prices over the last 12 months has slightly impacted the Net Present Value at a 10-percent discount rate of Proven Reserves (1P), we are pleased to see that there has been a significant overall increase in both NPV10 of 2P and 3P reserves reflecting the increased potential of the Project. Our flagship asset continues to grow and represents a viable and attractive investment proposition even at current lower oil prices."

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