Empyrean Notes Production Performance at Sugarloaf

Empyrean provided the following update on production and operations on Block B at the Sugarloaf Project:

Production 

Kennedy-1H

This well was the first to be brought online following stimulation and has been on continuous production since January 29, 2010, it has not yet had production tubing installed.

• Q1 2010 gross production - 29/01/10 to 31/03/10 (62 days)
• Total Gas - 151 mmscf (average 2.44 mmscf/d)
• Total Condensate - 31,383 bbls (average 506 bpd)
• Average Daily Gas Equivalent - 9.12 mmscfe/d^
• 60 day gross production
• Total Gas - 148 mmscf (average 2.47 mmscf/d)
• Total Condensate - 30,825 bbls (average 514 bpd)
• Average Daily Gas Equivalent - 9.26 mmscfe/d^

Weston -1H

This well has been on continuous production since February 16, 2010 and has not yet had production tubing installed. The 60 day gross production has been estimated to allow comparisons to be made.

• Q1 2010 gross production - 16/02/10 to 31/03/10 (44 days)
• Total Gas - 253 mmscf (average 5.76 mmscf/d)
• Total Condensate - 16,648 bbls (average 378 bpd)
• Average Daily Gas Equivalent - 11.74 mmscfe/d^
• 60 day gross production*
• Total Gas - 342 mmscf (average 5.7 mmscf/d)
• Total Condensate - 21,351 bbls (average 356 bpd)
• Average Daily Gas Equivalent - 11.4 mmscfe/d^

^equivalent gas rates have been calculated using an industry standard 12:1 conversion of oil to gas and an uplift to the gas volume of 25% representing the high calorific content of the gas.

*this figure is based on 57 days data and 3 days extrapolation based on the decline observed in the last day of reported data.

On March 25, 2010 Empyrean reported 30 day average production figures (calculated on the same basis) and these were: Weston-1H - 11.5 mmscfe/d and Kennedy-1H - 11.7 mmscfe/d.

By comparison the Petrohawk announcement released on 01/02/10 had a 30 day average from 19 wells in its Hawkville Field at 7.8 mmscfe/d and a 60 day average from 18 wells at 6.6 mmscfe/d when calculated on a 12:1 basis. 

Sugarloaf Project Fracture Stimulation Program

Empyrean has been advised that due to a late scheduling change, the Morgan-1H well will now be the first well to be fracced ahead of the Easley-1H well with operations expected to start very shortly. 

Empyrean Executive Director, Tom Kelly said, "We are pleased with the production performance of these two wells. In addition, the operator has managed to reduce the time taken to drill development wells and this reduces costs. This is good news and has very positive implications for the overall economics of the project."