TCEI Drilling Ahead at Sugarkane Field's Block B

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

Kowalik #1H Well

Empyrean has been advised by the Operator of the Sugarloaf AMI, Texas Crude Energy Inc (TCEI), that as of July 30, 2008, the Kowalik #1H well had reached a depth of 6,126 feet in the 8 3/4" hole section and was drilling ahead. Since the last operational update the 13 3/8" and 9 5/8" casing have both been run and cemented, with the latter at a depth of 6,020 feet.

This vertical section of the well will be drilled as a pilot hole down to approximately 11,970 feet through the chalk. This will then be logged, plugged back and the well sidetracked in the 8 3/4" hole size to the top of the chalk before 7" casing is run prior to drilling the horizontal section. The well is planned to have a 6,000 ft horizontal section and is targeting the upper pay interval that has successfully produced gas and condensate in Block A (TCEI JV Block A1 and A3 wells). The Joint Venture is working towards this being the first in a continuous sequence of 4 wells.

Kennedy #1H Well

Empyrean has been advised by TCEI that following fracture stimulation operations, which took place on Thursday July 3rd and subsequent clean out operations, the well has continued to flow at 30 - 40 bbls of condensate per day with associated gas and minor volumes of fracture fluid. Over 5,000 bbls of fracture fluids have not been recovered from the most recent stimulation. The present production rates originate from 17 feet of perforations in the bottom 600 feet of the horizontal section.

This well was drilled horizontally within the deeper section (potential 'middle pay zone') of the Austin Chalk accessing a chalk horizon not previously tested within the Sugarkane Field. While the gas and condensate flow rates are minor at this juncture the production represents the first sustained hydrocarbon flow from this deeper horizon indicating additional hydrocarbon recoverability above the already considerable resource estimates associated with the upper chalk horizons. The Operator proposes to place this well on long term test to allow for possible further clean up and to monitor flow performance. It is not expected that additional operations will be undertaken at Kennedy #1H until Q1 2009.