Empyrean announced being awarded the Drilling Contract for Jade Prospect. Block 29/11, China – The Drilling Contract for Jade Prospect including a significantly reduced drilling cost estimate and December target Spud Date.
Share Talk took the opportunity to arrange an interview with Tom Kelly CEO, Director & Gaz Bisht Executive Director (China) to ask a few questions and listen to what the company has in store for shareholders.
Here is the list of questions we asked
- So the spud date for the Jade prospect is being targeted for 15th to 30th December, can you tell me how long it will take for the well to be drilled and how soon afterwards the results will be known and announced to the market?
- In the RNS you say that from your 3D seismic, that the basin is a classic “fill to spill” setup, can you explain what you mean by this?
- Upon making a commercial discovery what percentage will Empyrean have? Would you then look to take this into production or bring in another partner?
- Are there any nearby producing oil fields or discoveries to Jade?
- If you make a discovery at Jade, what do you think the revised geological chance of success for discovery will then be for the nearby prospects Topaz and Pearl?
- Is there any further news to report on your Mako gas field investment in Indonesia?
Block 29/11 is located in the Pearl River Mouth Basin, offshore China.
Block 29/11 is a large block – 1806 square kilometres – located in the prolific Pearl River Mouth Basin, offshore China, approximately 200km southeast of Hong Kong.
Background information of the project.
Empyrean is the operator of Block 29/11 in China and has 100% working interest during the exploration phase. In the event of a commercial discovery, its partner, China National Offshore Oil Company (“CNOOC”), may assume a 51% participating interest in the development and production phase.
As part of the award process, the Company and COSL have agreed all technical, commercial and contractual terms and COSL has confirmed rig availability and a target spud date of 15 December to 30 December 2021 for the Jade Prospect. A condition of the award is that Empyrean and COSL have now agreed that there will be no further exceptions, qualifications or deviations to the technical, commercial and contractual terms and conditions ahead of signing the IDC. The Drilling Program and Geological Program are the only remaining items to be incorporated into the IDC and are procedural in nature. CNOOC approval was sought and provided ahead of the award of the IDC and all parties are aligned in the targeted timing to drill the Jade Prospect in mid to late December.
As announced on 23 April 2021, Empyrean appointed AGR to complete a comprehensive well design and engineering project for the Jade Prospect. Empyrean then elected, based on AGR’s analysis and recommendation, to use a four-string casing design for the drilling of the Jade Prospect.
The Company had previously been quoted US$18.5 million to drill the Jade well with testing of any oil column to be in addition to this amount. Following the well engineering and design work completed with AGR, the Company has been working diligently with COSL towards securing a rig and finalising costs for the well. To this end, the parties have reached agreement on a substantially reduced turnkey quote for the drilling of the Jade Prospect of US$12.3 million on a dry hole basis, an approximate 34% saving on the initial quote. On a success basis, testing of any oil column has been quoted at US$7.4 million.
The substantially reduced drilling contract quote has been reached without compromising the well design, safety or operational efficiency of the proposed well.
The Company is making good progress on other drill preparations including preparation of the Drilling Program, Geological Program, Well Site Survey and various pre-drilling permits.
The Company announced on 9 July 2021 that it had raised gross proceeds of £5.02 million (US$6.92 million) through an equity placing and that the net proceeds would be used to secure a suitable drilling rig and order long lead items, as well as for the Company’s general working capital requirements. The Company will require further funding, via a joint venture, exercise of warrants or from an equity raising in order to enable it to undertake the drilling of the Jade Prospect.
For further information please contact the following:
Empyrean Energy plc
Tom Kelly
Tel: +61 6146 5325
