Empire O&G Spuds Red Gully North-1 Exploration Well in WA's Perth Basin

Oil and gas producer Empire Oil & Gas NL disclosed Tuesday that it has spud its Red Gully North-1 exploration well in EP 389 in Western Australia’s Perth Basin, located 2.4 miles (4 kilometers) to the north of the Company’s Red Gully Processing Facility. Proximity to the Red Gully Processing Facility will allow for a fast tie-back and commercialization of the well if successful.

The Red Gully North-1 well will be drilled by the Enerdrill Rig 3 and is expected to take approximately 44 days to reach a final proposed depth of 14,360 feet (4,377 meters). The objective section of the well will be evaluated using wireline logs after total depth is reached.

Empire Oil and Gas CEO Ken Aitken said drilling success at Red Gully North would provide numerous benefits to Empire and its shareholders.

“Empire is focusing on growing its reserves and resources to build on the Company’s existing 1P reserves of 12.29 petajoules (PJ) and 2P reserves of 17.8 PJ. The Red Gully North prospect is seen as a low risk opportunity to add reserves and resources in the case of a significant recovery,” Aitken said.

“It would also provide a low cost tie-in to the Red Gully Processing Facility to generate additional gas sales and revenue for Empire. Commercial success at Red Gully North-1 will further assist in reducing risks associated with other exploration leads in the north of EP 389, which have been identified by the Black Swan Airborne Geophysical Survey, undertaken by Empire in mid-2015.”

“In addition, supply of gas to the Red Gully Processing Facility from multiple, rather than a single well, will provide potential investors with greater confidence around the sustainability of gas supply to the plant and the associated cash flow.”

Target Prospectivity

Empire considers Red Gully North-1 to be a relatively low risk exploration well, located structurally up dip of the existing Gingin-1 well gas discovery made by WAPET in the 1960s. The Red Gully North structure has subsequently been re-defined by modern 3D seismic conducted by Empire. It was the interpretation of this modern seismic data, and a review of the old Gingin-1 discovery, which allowed Empire to select the Red Gully North-1 well location. Gingin-1, located close to the edge of the target structure, tested gas from four zones in the Jurassic age, Cattamarra Coal Measures at a total, aggregate maximum flow rate of 16 million cubic feet per day (MMcf/d) with minor amounts of associated condensate. Gingin-1 produced gas for a brief period in the 1970s before being abandoned due to high levels of water production. Empire considers that the high level of water influx was due to a combination of the location of the well close to the edge of the structure, poor well integrity and a less than optimal completion of the well.


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