Empyrean Energy (EME ) said “excellent progress” has been made at the LH 17-2-1 well at the Jade prospect situated at the group’s 100% owned Block 29/11 permit offshore China, thereby pushing the current estimated geological chance of success to 65%, up from 41%.
Empyrean operates Block 29/11 and has 100% working interest in the exploration phase. In the event of a commercial discovery, its partner China National Offshore Oil Company, may assume a 51% participating interest in the development and production phase of the permit.
The oil and gas development company, which has drilled the 12-1/4" section of the well to 2150 metres measured depth (MD), said it is now preparing for the running of 9-5/8" casing before the 8-1/2" hole is drilled by the company to the Total Depth (“TD”) of 2860 metres MD.
During drilling of the 12-1/4" section, elevated methane (C1) ranging from 227 parts per million (“ppm”) to 15440 ppm was recorded at the gas chromatograph during mudlogging.
The Company said negligible C2 and no C3 components were recorded while higher values of methane (C1) ranging from 4190 ppm to 15440 ppm were recorded in the zone between 1550 metres to 1800 metres MD which was interpreted pre-drill to be a “gas cloud” zone.
To date, Empyrean Energy’s partner China National Offshore Oil Company (CNOOC) has confirmed comparable methane ranges in their oil discovery well LH 23-1-1d that is located 10km Southwest of the Jade prospect and which also had a “gas cloud” feature, it noted.
Drilling results at the site have validated the pre-drill interpretation of seismic data including the presence of gas clouds over the Jade and the Topaz prospects also on the permit.
Based on the latest elevated methane (C1) readings thus far, Empyrean Energy has upgraded its internal Geological Chance of Success (“GCoS”) for the Block’s Jade prospect from 41% to 65% as well as the GCoS for its Topaz prospect from 35% to 47%, respectively.
Empyrean’s CEO, Tom Kelly, informed investors: “The first technical objective of the Jade well has now been drilled. The validation of “gas clouds” through the presence of elevated methane levels in exactly the depth zone we interpreted on the excellent quality seismic data proves that the gas clouds exist and supports the Company’s pre-drill interpretation that the methane is probably coming from light oil in the anticipated reservoir section.”
He commented: “This is a major box now ticked, if we are to make a light oil discovery at Jade. The comparisons to nearby CNOOC discovery wells look very compelling. Drilling operations continue to run smoothly and safely, with progress to date right on schedule”.
The objective of the 2021 drilling campaign is to target a world class conventional oil target in the Jade prospect, to which Gaffney Cline & Associates (“GCA”) assigned a GCoS of 32%.
Subsequent to this independent assessment, Empyreancompleted a gas cloud study and post stack seismic inversion study that it believes further mitigates risk and increases the GCoS to 41%. Following the elevated methane readings, the internal Company GCoS is now 65%.
Empyrean said its “excellent” quality 3D seismic indicates that there is a classic “fill to spill” geological setup in the basin, and a robust regional seal, that provides the Jade and Topaz prospects with a very real possibility of being filled in a similar fashion to nearby discoveries.
The Company said the Jade and Topaz prospects both have gas clouds, similar to nearby discoveries, in the overburden on 3D seismic while dry wells nearby do not have gas clouds.
The Jade prospect is the first of the three identified prospects within Block 29/11, which also contains the Topaz and Pearl prospects. The combined audited mean in place potential of all three prospects is 884 MMbbl and a P10 in place upside of 1,588 MMbbl, the Group notes.
‘The post stack seismic inversion study showed Jade and Topaz both have the potential for excellent carbonate buildup reservoir quality with excellent porosity and permeability,’ it said.
The Company further explained: “Any oil discovered is expected to be light oil in the 38-41 API range, similar to nearby discoveries. These attributes combined with the potential for exceptional natural reservoir drive supports the potential for excellent recovery rates.”
The objective of the Jade well is to test for hydrocarbons down to TD of 2860 metres MD.
In a morning research note, analysts at Cenkos Securities commented: “Following any potential success atJade, Empyrean would like to drill the much larger Topaz prospect, to which Gaffney, Cline & Associates assigned a 30% geological chance of success.”
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