Empire Oil & Gas NL reported that its wholly owned subsidiary, Rough Range Oil Pty Ltd, has executed a Farmin Agreement with DVM International Limited ("DVM") who will earn varying interests in Exploration Permits EP 439, EP 5 and EP 6 all in the onshore Carnarvon Basin by contributing to the exploration program described below.
DVM is an investment company listed on the ASX.
DVM will contribute 40% of the costs of drilling the Star Finch-1 exploration well to earn a 20% interest in EP-5. The Star Finch structure is a compressional anticline feature with the main objectives being porous Birdrong Sandstone sealed by the regionally extensive marine shales of the Muderong Shale. Seismic lines over the anticline exhibit bright amplitudes at the Birdrong Sandstone, Windalia Radiolarite and lower Gearle Siltstone, and these amplitudes die out at about the spill point of the structure. Assuming the Star Finch structure is gas bearing with a 5 metre oil column, estimated potential recoverable reserves are of the order of 50 billion cubic feet of gas and 25 million barrels oil. The main gas market would be the town of Carnarvon with any excess gas going along the spur line to the Dampier to Bunbury natural gas pipeline.
DVM will contribute 20% of the costs of drilling the Lake MacLeod-1 exploration well to earn a 10% interest in EP-439 and EP-6. The Lake MacLeod structure is an anticlinal feature where Devonian aged sediments drape over an older Silurian fault block. The Devonian section in the nearby Quobba-1 well demonstrated good reservoir, seal and source and the well encountered good oil and gas shows. The main objectives in Lake MacLeod-1 are porous dolomites of the Gneudna Formation. The Lake MacLeod structure has the potential to have up to an estimated 150 million barrels of recoverable oil, if oil is present and the structure is filled to its maximum possible spill point.
As a result of this Farmin Agreement with DVM, Empire is pleased to announce that the Lake MacLeod-1 well and the Star Finch-1 well are fully funded. These wells are planned to be drilled "back-to-back" during April-May, 2008 using DCA Rig 7 which is currently operating in the Carnarvon Basin.
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