Texas Crude Commences Commercial Production at Kennedy-1H

Empyrean Energy has provided the following update on operations on Block B which is part of the Sugarkane Gas and Condensate Field.


Empyrean has been advised by the Operator, Texas Crude Energy Inc ("TCEI"), that commercial production commenced at Kennedy-1H at initial rates of 0.2 million standard cubic feet per day and 60 barrels of condensate per day on October 2, 2008. This initial Kennedy production comes from a fracture stimulated zone of approximately 600ft in the bottom of the 4,000 ft horizontal section of the well drilled through a lower stratigraphic level to that currently being drilled at Kowalik-1H. To our knowledge this represents the first production from this level within the Sugarkane Field.

Kowalik-1H Well

TCEI have also reported that on October 8, 2008, the well had reached a measured depth of 16,178 ft, which equates to approximately 4,350ft of horizontal section within the Austin Chalk.

The well has continued to produce gas while drilling, with regular intervals producing strong flares with back pressure on the well. The rig has consistently measured gas readings in excess of 2,000 units.

Whilst encouraging the commercial significance of these gas shows and flares will not be known until the well has been flow tested.

The horizontal section is targeting the upper pay interval that has been reported as successfully producing gas and condensate in Block A (TCEI JV Block A-1 and A-3 wells).

Empyrean has a working interest of 18% in this well.

Empyrean Director Tom Kelly said, "This first commercial production from Kennedy in the middle pay zone is very exciting as it confirms the middle pay zone as being commercially productive. The middle zone has the potential to hold greater reserves than the upper zone. We think there is also vast room for improvement in flow rates from this zone."


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