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Sunday, 05/28/2023 9:36:31 PM

Sunday, May 28, 2023 9:36:31 PM

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Empire Energy Group delivers “nationally significant” LNG resource at EP187 in Beetaloo Basin
20:29 Sun 28 May 2023
Ephrem Joseph
Empire Energy Group Ltd
Empire Energy Group Ltd - Empire Energy Group Ltd delivers “nationally significant” LNG-scale resource at EP187
Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) has made a breakthrough with an independent LNG resource at EP187 permit in the highly prospective Beetaloo Basin, representing a “nationally significant” resource of low CO2 gas.

The company said the results were nothing short of impressive, revealing a substantial increase in the contingent resources of EP187, including:

270% increase in 2C contingent resources to 1,739 Petajoules (PJ) representing an average estimated ultimate recovery (EUR) per well of 7.9 PJ;
217% increase in 1C contingent resources to 304 PJ representing an average EUR per well of 6.2 PJ; and
129% increase in 3C contingent resources to 3,507 PJ representing an average EUR per well of 9.3 PJ.
The assessment, carried out by Netherland, Sewell & Associates, Inc. (NSAI), an esteemed petroleum property analysis firm, follows the successful completion of Empire's 2022 Beetaloo work program.

What makes Empire's EP187 even more promising is the high calorific value of its gas, a factor that NSAI has taken into account while assessing the sales volumes.

Shares have been as much as 8.15% higher in the first hour of ASX trading to A$0.20.

Gas shortfall on horizon
Empire managing director Alex Underwood said: "The Empire team is delighted to share these outstanding results with shareholders.

“The volumes delineated in EP187 represent a nationally significant resource of low CO2 gas.

“Warnings abound from multiple sources that Australia faces material gas shortfalls in years ahead, a view that I share given the enduring role of gas.

“The Beetaloo and more particularly Empire’s resource has the potential to service domestic demand gaps and international sales via LNG.

“At an assumed gas contract price of $10/GJ, each development well in EP187 could produce between $62 million and $95 million of revenue over its life, compared to a development cost of ~$20 million in the pilot phase and or ~$15 million in larger development scenarios.

Results summary
The C-2H and C-3H operational results demonstrate that Empire can cost-effectively deliver 3-kilometre hydraulically stimulated horizontal wells utilising Australia’s existing rig and frack spread fleet.

3-kilometre horizontal wells represent Empire’s intended well design for future development of the Carpentaria Project in EP187.

Contingent resources have been estimated using a combination of deterministic and probabilistic methods based on step-out locations from current well control using this well design with a 500m lateral drainage offset.

EP187 contingent resources

Forward plan
Prospective resources are those areas proximal to the contingent resources areas where uncertainty in mapping is still evident due to a lack of well control.

Future additional step-out drilling may allow Empire to convert some of this prospective resources base to contingent resources.

However, Empire’s current focus for EP187 is on commercialising its significant discovered resource base.

Underwood adds: “NSAI has identified over 200 2C drilling locations, representing LNG scale development potential.

"Following the recent green light from the NT Government to move into production, the Empire team is progressing towards development drilling and cash flow.

“Our current capital resources allow us to proceed to a final investment decision on the pilot project this year without raising any further capital in the near term.

“This will allow the team to focus on further value accretive work including field development planning, indigenous consultation, regulatory approvals and gas sales negotiations