Onshore US-focused junior oil firm Empyrean Energy’s latest set of results indicate that it is set to enjoy further upside at its Sugarloaf AMI project located in the Eagle Ford shale, Texas.
In half-year results released Thursday, Empyrean said there was a major upgrade to reserves and resources at Sugarloaf during the six months to September 30, 2015 so that its 1P reserves at the project have been valued at $45.7 million and 2P reserves are valued at approximately $136m million. Production during the period amounted to 224,182 barrels of oil equivalent net to the company.
Empyrean holds a three percent interest in the Sugarloaf AMI project, which is operating by US independent firm Marathon Oil. Marathon has spud 335 wells at Sugarloaf to date, with 81 wells in production at the project as of November 30.
Empyrean said that it expects to see between 80 and 100 wells drilled at Sugarloaf in 2016.
Commenting on the results, Empyrean CEO Tom Kelly said:
“We have added significant value to our flagship Sugarloaf AMI during the six months under review. In July 2015 we announced that between December 31, 2013 and December 31, 2014, our proven reserves (1P) had increased by 63 percent to 5.78 million barrels of oil equivalent while our probable reserves had improved by 130 percent to 6.86 MMboe. Add to this our further reserves increase reported in October 2015, effective to 30 June 2015, which brought our 1P reserves to 6.58 MMboe, and a 9.77-percent increase in probable reserves to 7.53 MMboe, the significant scale of our project is very clear.
“Marathon remains committed to developing the Sugarloaf AMI. 58 wells were spudded during the period in total, with an increased proportion drilled to the Austin Chalk formation. Appraisal of the Upper Eagle Ford Shale is developing positively and results to date are reflective of the Lower Eagle Ford Shale, which has been our main target to date. Considering the reduced drilling costs, and the increased production rates, we believe the Sugarloaf AMI is well positioned for growth in 2016.”
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