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Friday, 05/12/2023 7:58:03 AM

Friday, May 12, 2023 7:58:03 AM

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Upstream article 5/11/23...
In operation: the Silver City Drilling Rig 40 at the Carpentaria-2H well on EP 187 in Australia’s Northern Territory.Photo: EMPIRE ENERGY
Empire Energy eyes pilot production in newly-reopened Australian shale play
Final investment decision targeted in 2023 for Carpentaria gas production

11 May 2023 23:05 GMT UPDATED 11 May 2023 23:05 GMT
By Amanda Battersby in Singapore
Australia-listed junior Empire Energy is racing to step up a gear towards production at its Northern Territory assets now the territory’s government has finalised the Beetaloo regulatory framework.

Empire is progressing front-end engineering and design work, field development planning, Indigenous and regulatory approvals, gas sales and pipeline transportation negotiations for its proposed Carpentaria pilot project on EP 187, with the aim of taking the final investment decision later this year.

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Independent reservoir engineering forecast production analysis indicates that three-kilometre horizontal wells in the Carpentaria area of EP 187 could ultimately deliver about 6 billion cubic feet of gas per well on a 50% recovery basis and about 8 Bcf on a 10% recovery basis, the operator said.

“This represents a potential upstream development cost of A$2 to A$3 per gigajoule in future development scenarios assuming A$15 million to A$20 million per well capital expenditure,” Empire said.

The company has engaged consultants Netherland, Sewell & Associates to prepare an updated resource assessment for its EP 187 asset, which is due before the end of June.

The regulatory framework put in place by the NT government is now among the most extensive and robust in the world and will allow the safe and sustainable development of the Beetaloo’s abundant natural gas resources, Empire said.

The company added that this gives management the confidence to accelerate its investment decision and planning processes as it moves towards pilot production.

“Building on the encouraging results of our exploration activity over the last four years, we look forward to submitting applications for all required approvals to enable us to move into gas production and the delivery of much-needed new gas supply to the Australian domestic market, and subsequently to increase liquefied natural gas exports, already the NT’s largest source of foreign income and a significant contributor to federal government revenues,” Empire managing director Alex Underwood said.

Last week, the NT government announced the finalisation of all 135 recommendations of the 2018 scientific inquiry into hydraulic fracturing in the territory chaired by Justice Rachel Pepper, effectively establishing a platform for approval of gas production in the Beetaloo sub-basin.

“After an extensive process of review and reform, industry participants and their investors now have certainty on how the NT government will regulate this vital industry,” Underwood added.

Meanwhile, in the western Beetaloo, Empire has secured a groundwater extraction licence to supply water for its planned 2D seismic survey, drilling and hydraulic stimulation activities in the gas discovery area within its wholly owned EP 167 and EP 168.

The company plans to soon resubmit its environment management plan for this work and, once its EMP and Land Access & Compensation Agreements are completed and approved, Empire will be able to acquire up to 376 line kilometres of 2D seismic and construct up to six well pads with horizontal stimulated wells.