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Wednesday, 05/24/2023 8:49:22 AM

Wednesday, May 24, 2023 8:49:22 AM

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Empire Energy Group continues strong gas flow at Carpentaria-2H as testing ends
10:53 Wed 24 May 2023
Empire Energy Group Ltd
Empire Energy Group Ltd -
Gas flare at the Carpentaria-2H well.

Consistently strong gas flow rates at the Carpentaria-2H (C-2H) well within the Beetaloo Sub-Basin in Australia's Northern Territory (C-2H) has renewed the confidence of Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) in the commercial viability of its EP187 asset.

C-2H has produced a total of 323 terajoules (TJ) or 281 million standard cubic feet (mmscf) over 127 days, with the gas composition remaining consistent with high calorific value and extremely low carbon dioxide (CO2).

This equates to a normalised rate of 2.75 TJ or 2.4 mmscf per day per 1,000 metres for the entire test period.

Following an updated gas composition analysis, the post-soak 2023 IP30 is now confirmed at 3.5 TJ or 3.0 mmscf per day per 1,000 metres.

Growing confidence
"We are pleased to share the continued strong gas flow rates achieved at C-2H as they provide further confidence that an economic development in EP187 may be achievable,” Empire Energy managing director Alex Underwood said.

“The cumulative production of 323 TJ over 127 days from C-2H would equate to over 1,000 TJ cumulative production for an equivalent 3-kilometre horizontal development well over the same period.

“This is despite the unoptimised nature of the C-2H well that has tested multiple completion methodologies.

Wells shut
C-2H has been 'shut in' for now and will be available as a future gas producer.

On the other hand, Carpentaria-3H (C-3H) will reopen for flow testing once its soaking period ends.

Soaking is the practice of shutting in a shale gas well for a period following fracture stimulation to improve its long-term productivity through redistribution and interaction of the residual water with the rock.

Meanwhile, the front-end engineering and design for the Carpentaria Pilot Project’s final investment decision is ongoing.

Map showing depth to base of Velkerri B shale across the Greater Carpentaria project area.

Attractive gas price
“If we assumed a gas price of $10/GJ, which is less than half the spot price at Wallumbilla on May 22, 2023, an equivalent 3-kilometre development well could generate over $10 million in gross revenue before royalties over an equivalent first 127 days of commercial production without any further well optimisation,” Underwood said.

“Such a level of gross revenue so early in the life of development wells may support field level economics.

“Following recent regulatory implementation by the NT Government giving the Beetaloo a ‘green light’ to move into commercial production, and an extremely tight domestic gas market, line of sight towards commercialisation is getting clearer by the day," he added.