TECI to Test for Positive Gas at Sugarloaf's Kowalik-1H

Empyrean Energy 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, Texas Crude Energy Inc ("TCEI"), that on September 23, the well had reached a measured depth of 14,385 ft, which equates to approximately 2,500 ft of the planned 6,000 ft of horizontal section within the Austin Chalk.

The well has continued to produce gas while drilling, which has led to sustained flaring activity. In addition, when routine operations such as connections reduce the down hole pressure, larger flares have been observed on surface, indicating a response to drawdown. Elevated gas readings of approximately 1500 units have been consistently measured during the drilling of this portion of the horizontal section.

While 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 an 18% working interest in this well.