Empyrean Energy Share Discussion Threads

[jemjem] 05/10/2021 08:11

Empyrean Energy Plc
Well Site Survey Awarded
Empyrean has announced the award of the contract for the well site
survey over the 225mmbbl Jade prospect to China Oilfield Services
Limited (COSL). The award of the well site survey contract marks another
important milestone for Empyrean as the Company moves towards the
drilling of the Jade prospect in December 2021.

As explored in our previous report, exploration success at Jade would see
our risked valuation of the Jade prospect increase from 9.9p to an
estimated c41.8p, a c4.2x increase. Success at Jade would also
significantly de-risk both the adjacent Topaz and Pearl prospects.
Unrisked (the point at which there is 0% risk) our valuation of the Pmean
resources at Jade would increase to c83.7p.

With all but one of the adjacent CNOOC oil discoveries “filled to spill”,
their recoverable resources are close to the P1/P10 oil in place volumes.
Assuming a P10 oil in-place volume for the Jade prospect increases our
unrisked valuation from an estimated c83.7p to c135.7p. BUY.

 Another Important Milestone – Empyrean Energy has awarded a contract for the
well site survey over the Jade prospect to COSL on Block 29/11. The objective of the
well site survey is to identify all possible constrains and hazards which may affect the
operational or environmental integrity of a proposed drilling operation. In addition,
the survey is designed to provide sufficient data to fully assess potential top-hole
drilling hazards at the proposed well location and to ensure the rig can be secured
safely onsite.
The site survey is scheduled to commence in late October 2021, subject to a safe
weather window for operations.

 High Impact Exploration at a Discount – In September, Empyrean awarded COSL an
Integrated Drilling Contract (IDC) for the drilling of the Jade prospect exploration well
in mid to late December. The final IDC is expected to be signed in the coming weeks
once the ancillary drilling programme and geological programme have been
finalised.
Empyrean had previously been quoted a dry hole cost of US$18.5m; however,
following detailed well engineering and design work with AGR, Empyrean and COSL
have agreed a substantially reduced turnkey dry hole cost of US$12.3m, a c34%
saving on the initial quote. The substantially reduced drilling contract quote has beenreached without compromising well design, safety or operational efficiency. On asuccess case, testing of any oil column has been quoted at US$7.4m.
The award of a contract to COSL at c34% below the initial quote is significant and iseffectively better than a 34% JV farm out, maintaining Empyrean’s 100% exposure
without the need for any asset dilution.

 China’s Largest Oilfield Contractor – COSL is China’s largest oilfield contractor and one ofthe largest energy service companies globally. COSL has the largest drilling fleet in Asia and
the third-largest drilling fleet worldwide, with 36 jack-up rigs, 12 semi-subs and six modularrigs, all equipped with the latest technology. Empyrean has previously hired COSL tocomplete a 580km2 3D seismic survey in Block 29/11, offshore China, in 2017. Empyrean hasalso had previous experience of using COSL’s drilling capabilities as part of the 2019 DuyungPSC drilling campaign, in Indonesia, where COSL employed the Asian Endeavour-1 jack-uprig to drill the Tambak-1 and Tambak-2 wells

 A Well To Watch – The Jade prospect is one of the most exciting prospects to be drilled bya junior oil and gas explorer this year. Jade is a four-way dip closed carbonate build-upencased in marine shale, situated updip and proximal to several CNOOC oil discoveries. Theprospect is estimated to contain 225mmbbls of gross mean oil in place, with Empyreanassigning the prospect an internal 41% geological chance of success (GCoS).
With the exception of one field, which is 90% full, all of the CNOOC discoveries situated alongthe migration pathway to Block 29/11, which also contains the Jade prospect, are “filled tospill”. As such, the CNOOC discoveries have often been close to their P1 or at the very leasttheir P10 oil in place volumes. In the P10 case, the Jade prospect contains 395mmboe of oilin place.

A comprehensive oil migration study, completed in June 2018 interpreted that the Jadeprospect was potentially filled from at least two different migration pathways. Whilstanalysis of the 3D seismic data from over the nearby LH 23-1d-1 oil discovery has helpedconfirm the potential “fill and spill” pathways to the Jade structure from the LH-23-1d-1discovery.

In May 2019, comprehensive analysis of the 3D seismic data also revealed the presence ofwell-defined gas clouds above the Jade prospect. Gas clouds have been effectively used asan exploration tool in many geological basins (eg North Sea, Gulf of Mexico), leading to thediscovery of significant amounts of oil.

Subsequent to the gas cloud study, post stack seismic inversion work confirmed the potentialfor a world-class carbonate reservoir at the Jade prospect. Analysis of the seismic inversiondata confirmed that the Jade prospect had the potential for a world-class reservoir, withporosities between 20-30% and 1 Darcy permeabilities. Any oil discovered is expected to belight oil in the 38-41 API range, similar to nearby discoveries. These attributes combined withthe potential for exception natural reservoir drive support the potential for excellent
recovery rates.

[blakieboy7] 05/10/2021 08:04

Nice blue start

[lazarus2010] 05/10/2021 07:57

TD...could be right but then again why wait? Clearly just a formality, and the JV agreement can have certain terms precedent, which if not completed the cash is withheld and the agreement becomes void. Not exactly complicated...maybe Tom's cunning plan is that with each hurdle crossed the value of Jade increases and the cost to any investors also increases?

[blakieboy7] 05/10/2021 07:54

It seems like Cenkos are making up for lost time

[lazarus2010] 05/10/2021 07:52

Cenkos just put out a new report on EME, if anybody can pop a copy on here that would be nice ;-)

[the donald] 05/10/2021 07:48

I would have thought any JV partner would want these approvals before committing to deal?

[michmcd] 05/10/2021 07:47

Ducks in a row

[pb01] 05/10/2021 07:43

A cunning plan Baldrick!

[lazarus2010] 05/10/2021 07:36

not quite the rns I was hoping/expecting but as others have said another milestone achieved, Tom & Gaz keeping busy behind the scenes moving us towards the spud date. Clearly no point in doing all this work if they can't get the funding...so they must have a cunning plan...

[pb01] 05/10/2021 07:21

Another box ticked. Positive RNS

[soggy] 05/10/2021 07:09

That ticks another reassurance box and helps us believe it truly is going to happen. Still got the biggest elephant in the room to discuss, funding. But this news is good news - another important jigsaw piece in the puzzle.Anyone wish to speculate about the effect, if any, on the share price today?

[blakieboy7] 05/10/2021 07:04

Still targeting mid December too for initial spud

[judijudi] 05/10/2021 07:02

On our way 😀

[soggy] 05/10/2021 07:02

RNS out. Site survey contract awarded.Maybe just coincidence that we rose onto the close yesterday.

[blakieboy7] 04/10/2021 19:32

https://www.ft.com/content/ccd6f6d6-6045-4f0c-8638-9b0e01fee1c5

[lazarus2010] 04/10/2021 18:31

with a sustained bit of buying and pi's actually holding onto their shares we should see this fly as soon as we get a perfect storm...

rig date announced - tick
Oil prices hitting 3 year highs - tick
gas prices hitting record highs - tick
rig financing sorted with a good deal for existing PIs - tbc
PR roadshow after rig financing confirmed - tbc

and possibly...

New large investors on board - tbc
JV partners investing $5-10mln just for Jade and possibly option commitment to Topaz - tbc

[blocker2] 04/10/2021 16:07

Omg buying

[jemjem] 04/10/2021 14:56

Brent nearly $82. Heading for $90 apparently although OPEC might change that?
For me, it is inconceivable that there aren't a few parties out there who are prepared to have a $5-7m punt on a JV with us in China. Now's the time ;-))
Imo

[scaleyman] 04/10/2021 14:55

That ought to do it then Jj?? :0)

[scaleyman] 04/10/2021 14:53

How much are Dempsey/Borba and Eagle Oil Pool worth at firesale price?

[blakieboy7] 04/10/2021 14:35

Oil prices are on the move. Brent is just under 81

[lazarus2010] 04/10/2021 14:13

Last chance to buy around 6p imho. Tom needs to get some news out pretty sharpish if he will have any chance to get the share price to 12pps and receive the warrants cash...buy ahead of the herd...aimho niai dyofr gla