Quarterly Activities Report
Sydney, Jan 28, 2025 AEST (ABN Newswire) - During the Quarter, Empire Energy Group Limited (
ASX:EEG) (EEGUF:OTCMKTS) drilled the Carpentaria-5H ("C-5H") well. The primary objective of C-5H is to produce gas for the Carpentaria Pilot Project ("CPP") which is wholly owned and operated by Empire within the EP187 permit located in the Beetaloo Basin, Northern Territory.
C-5H was drilled from the same pad as Carpentaria-2H ("C-2H") and Carpentaria-3H ("C-3H") and is the longest well drilled by Empire to date with a total depth of 5,310 metres (17,421 feet), including a 3,310 metre (10,860 foot) horizontal section. The horizontal section was entirely drilled in the target Velkerri B Shale at an average depth of ~1,575 metres (~5,170 feet) below ground level. C-5H will be fracture stimulated and flow tested commencing in Q2 2025 following the northern Australian wet season.
The fracture stimulation stage depths are currently being finalised with scope for over 60 stages along the horizontal section. The focus of C-5H will be adapting the Beetaloo specific lessons learnt from the prior two wells, C-2H and C-3H, and transitioning from demonstrating execution to optimising gas productivity. Improvements are focused on fluid selection, pump strategies and perforation strategies.
These improvements will, in the success case, drive increased gas recovery and flow rates.
C-5H was drilled in 41 days from spud to rig release, compared to a pre-drill forecast of 45 days.
The forecast total cost for the drilling of C-5H is ~$19.7 million which includes drilling, casing, cementing and suspending the well in preparation for fracture stimulation. A large portion of this cost is transport and logistics including mobilisation and demobilisation for the single-well campaign in a remote location. Such costs are expected to materially decrease in future drilling campaigns due to the spread of cost over multiple wells, optimization and the development of an in-basin supply network as activity increases in the Beetaloo.
The CPP continues to build momentum towards first gas deliveries expected later in 2025, subject to construction of midstream gas processing infrastructure and receipt of Beneficial Use of Test Gas approval under the provisions of the NT Petroleum Act for the sale of gas. Receipt of this approval requires Traditional Owner consent and negotiation of a production royalty with the Northern Land Council who acts as agent to the Traditional Owners on the land in which we operate. Stakeholder consultations are well advanced and are presently anticipated to conclude in Q2 2025 with regulatory approval shortly thereafter.
Carpentaria project activities anticipated in 2025 include the stimulation and testing of C-5H, the construction of the Carpentaria Gas Plant and associated infield infrastructure and tie-in of C-2H, C-3H and C-5H for first gas production.
Comments from Managing Director Alex Underwood:
"Our team's focus during the Quarter was the drilling of Carpentaria-5H, securing financing for the Carpentaria Pilot Project and securing regulatory approvals.
Carpentaria-5H was drilled within time and budget, with the entire 3,310 metre horizontal section drilled, cased and cemented within the target Middle Velkerri B shale zone.
We had planned to stimulate the well immediately after drilling. However, to do so would have exposed our shareholders to material financial risks associated with weather (namely, that if we had not been able to demobilize the stimulation equipment, we would have incurred substantial standby costs). We have rescheduled stimulation to Q2 2025, immediately after the Wet Season, following which we will carry out an extended production test.
We secured a binding commitment from Macquarie Bank Limited for a $65 million funding package during the Quarter and completed documentation of Facility A and the Performance Bond Facility as detailed below. Documentation of the Midstream Infrastructure Facility is expected to complete this Quarter. Funds under the facilities will be applied to the Carpentaria Pilot Project, with substantially reduced dilution of shareholders' interests in the Company compared to equity financing.
We received NT environmental approvals for the Carpentaria Pilot Project. We are working closely with the Northern Land Council ("NLC") to facilitate traditional owner consent for sale of test gas. The NLC has advised us that the on-country meeting to seek that consent is scheduled for April 2025."
*To view the full Quarterly Report, please visit:
https://abnnewswire.net/lnk/Z2Y37I2I
About Empire Energy Group Ltd
Empire Energy (ASX:EEG) (OTCMKTS:EEGUF) is a Sydney based Australian oil and gas company holding 100%-owned and operated assets with unconventional targets in the Northern Territory Beetaloo Sub-basin and central trough of the McArthur Basin.
Empire is an active Beetaloo Sub-basin operator, focused on maturing its assets to production. Following the successful appraisal drilling and flow testing of the Carpentaria-2H and 3H wells in Empire's EP187, Empire is targeting first gas flow in H1 2025 at its Carpentaria Pilot Project. The Pilot has a targeted sales gas rate of up to 25 TJ per day utilising the existing McArthur River Pipeline.
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