Empyrean Energy Spuds Kennedy #1H in Sugarloaf Block B

Empyrean says that the Kennedy #1H exploration well, located in the onshore Gulf Coast Basin in Texas, USA, commenced drilling at 18:30 hours Texas time on 17 September 2007.

At report time (06:00 hours on 18 September 2007, Texas time) the well had reached a depth of 565 feet in 17.5-inch diameter hole and was drilling ahead.

The proposed total depth of Kennedy#1H is 17,570 feet (5,360 meters), which includes a horizontal section of approximately 5,000 feet (1,525 meters) to be drilled through the Austin Chalk Formation at a vertical depth of approximately 12,000 feet. The zone to be targeted by this horizontal section is believed to correlate with the producing section in the Sugarkane Field discovery well which is located some 8 km to the west of Kennedy #1H.

On a trouble-free basis the prognosed drilling time for this well is about 45 days.

Sugarloaf-1 Well

Kennedy #1H is located some 1.6 km from the Sugarloaf-1 well where fraccing and testing operations were commenced last week. Fracture stimulation of the deepest of the three zones of gas shows and log interpreted potential gas pay in the Cretaceous age Austin Chalk Formation was carried out on 11 September. The fracture stimulation operation terminated early after a premature screen-out halted pumping after only 6% of the planned proppant was placed in the formation. The reason for the screen-out is not known.

Proppant in the well bore is presently being washed out by a work-over rig prior to running tubing to test the zone. Some intermittent gas is being recovered during this operation. The significance of the gas shows will not be known until test operations are completed.