Empyrean Hires COSL Rig For Jade Drilling Off China
Oil and gas company Empyrean Energy has hired China Oilfield Services Limited (COSL) to drill the Jade prospect exploration well on Block 29/11, offshore China.
Empyrean is the operator of Block 29/11 and has 100 percent working interest during the exploration phase. In the event of a commercial discovery, its partner CNOOC may assume a 51 percent participating interest in the development and production phase.
The company said in a statement that all technical, commercial, and contractual terms were agreed and COSL has confirmed rig availability and a target spud date between December 15-30, 2021. CNOOC also gave its approval ahead of the contract award and all parties agree on the timing of the Jade prospect drilling.
In April, Empyrean appointed AGR to complete a comprehensive well design and engineering project for the Jade prospect. Based on AGR's analysis and recommendation, a four-string casing design was chosen as the best solution.
The parties were also able to agree on a $12.3 million turnkey quote for the Jade drilling. This is an approximate 34 percent saving on the initial $18.5 million quote. On a success basis, testing of any oil column has been quoted at $7.4 million.
It is worth noting that, although Empyrean raised $6.92 million in early July through an equity placing, it will require further funding, via a joint venture, the exercise of warrants, or from an equity raising to enable it to undertake the drilling of Jade.
As for Jade, it has an audited mean in place potential of 225 MMbbl and a P10 in place upside of 395 MMbbl. Four recent nearby discoveries by CNOOC immediately to the west of Jade are filled to their P10 potential or better. Other prospects identified on block 29/11 are Topaz and Pearl prospects, with the combined audited potential of 884-1,588 MMbbl.
"The countdown to the drilling of the Jade prospect has begun. Locking in rig availability, finalizing costs, and setting a target spud date were all essential to securing the remaining funds required to drill the Jade prospect whether that be by JV, warrant exercise, or equity raise,” Empyrean CEO Tom Kelly said.
“All other drilling preparation activities, including finalizing the site survey, ordering long-lead items, and securing the necessary drill permits, are progressing well. We also thank CNOOC for their continued support and cooperation throughout this process," he added.
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