Empyrean has signed a new participation agreement with Krescent Energy Company LLC to participate in the drilling of the Hercules Prospect in Tyler County, Texas.

The Hercules Prospect, located to the north of the Theuvenins Creek and Highbaugh Fields, is targeting Upper and Middle Wilcox sands and a well defined amplitude versus offset ("AVO") event, that appears in existing 3D seismic imaging, within the Upper Wilcox interval. The primary objective is in sand at a depth of 10,350' where the AVO anomaly conforms to structure.

Krescent will be the operator and have a turn-key drilling contract in place to drill the prospect which is expected to commence late December.

The terms of Empyrean's participation are that Empyrean will pay 13.333'% of the drilling and completion costs ("to the tanks") and 10% of all other prospect costs (including land, G&G and seismic) to earn a 10% working interest in the prospect.

Dry hole costs are expected to be in the order of US $715,000 for the final turnkey contract (Empyrean share $95,350) and prospect costs are approximately US $630,000 (Empyrean share $63,000). These payments have already been made to Krescent.

Further updates will be provided as significant events occur.

Commenting today Empyrean Director Tom Kelly said, "We are very pleased to have been offered the opportunity to work with Krescent on another project. We hope to build on the good working relationship that is being built following drilling of the Quinn-3H well at the Riverbend Project. With testing preparations well underway at Quinn-3H and drilling to commence shortly at Hercules we are excited for the future of Empyrean."