Empyrean Energy Share Discussion Threads

[10owen] 12/4/2022 18:53

Thanks JJ.

[lazarus2010] 12/4/2022 18:05

Markets closed so o/t...blood batteries...

[blueblood] 12/4/2022 17:57

Thanks all good to see further potential being highlighted widely

[judijudi] 12/4/2022 17:39

You’re welcome Guys

[crosseyed] 12/4/2022 17:28

Thanks to JJ

[realcooltrader] 12/4/2022 17:22

Thanks Elric, thanks JJ.

[judijudi] 12/4/2022 16:57

There are quite a few diagrams etc with the above article (they wouldn’t copy for some reason)
That’s just the text

[judijudi] 12/4/2022 16:47

Empyrean Energy Plc
Drill Prospect - Overview

🐝Small Company Champion 📈

3 hr ago

By Elric Langton | 12 April 2022

I have a financial interest in Empyrean Energy.

Empyrean Energy plc (AIM: EME), the oil and gas development company with interests in China, Indonesia and the USA, has announced the drill rig NH 9 has commenced drilling operations at LH 17-2-1 well on Jade Prospect at its 100% owned Block 29/11 permit, offshore China.

This news should prove to be an exciting period for the Company and investors as the Empyrean team has been working with a laser focus on this permit for the past five years. With the commencement of drilling operations, I expect more news within days because the drilling campaign is relatively short.

The news of spudding of the well and setting of the 36” conductor will be followed by a set of two further casings before the well is drilled to the total depth of 2860m. The drilling campaign period is expected to last c26 days. This drilling operation period has significant potential for news – which we hope will include potential gas kicks around the “gas cloud” zone and potential strong oil shows in the primary reservoir formation as the good drills to target depth.

If news breaks that the well has hit hydrocarbons based on the logging while drilling (LWD) data in the main reservoir, we are looking at a significant rerate in the share price.

In this scenario, operations will move to a “success-case” outcome that includes the acquisition of comprehensive log suites data that will further confirm the oil column height, the porosity of the reservoir etc. It will be followed by formation pressure, downhole fluid analysis, fluid sampling, sidewall coring etc.

Duster or commercial find, the well will be closed off because it is an exploration well, not a production well.

The Jade Prospect is located at the Pearl River Mouth Basin in the South China Sea. Empyrean has partnered with a significant resource player, none other than state-owned China National Offshore Oil Corporation (CNOOC), with 51% participating interest in the development and production phase. Empyrean’s man on site is Executive Director Gaz Bisht; he has a long and productive relationship with CNOOC, a relationship that sets Empyrean apart from its peers, which bodes well should Jade prove a commercial prospect.

CEO Tom Kelly has this to say about Gaz, which is worth repeating.

“Gaz was contracted to write a report for Roc Oil Company Pty Limited (ROC), one of Australia's leading independent upstream oil and gas companies with a presence in China, following a partially unsuccessful drilling campaign that would justify Roc pulling out of a final exploration well. It was expected that Gaz would simply lean on the poor results to date and then write a “yes man” report advising Roc to pull out of the final obligation well. A “no brainer”, it would seem, given the odds of discovery. However, Gaz did his homework and went against the odds. Instead of recommending Roc pull out of the well, given the previous failures, he did the opposite. He advised the board that the remaining exploration well was the one they should have drilled first!! He showed them why. To their credit, they listened. That discovery is still in production today. And Gaz is significantly credited with this achievement… there is no man I trust more, technically, than Mr Gajendra Bisht.”

Gaz is a man of integrity with the skillset required to take Empyrean through the current very exciting stage of business. To get to this stage, Empyrean has done the hard yards and drawn on all of Gaz's experience and utilised the best technology that modern hydrocarbon exploration offers. Empyrean’s Jade and Topaz assets share important similarities with the recent CNOOC discoveries immediately west and close by to Jade and Topaz, which provide greater encouragement than Gaffney Cline & Associates (GCA) assigned Geological Chance of Success (GCoS) of 32%. After this independent assessment, the Company completed a gas cloud study and post-stack seismic inversion study that it believes further mitigates risk and increases the GCoS to 41%.


The Jade Prospect has a GCA audited mean in place potential of 225 MMbbl and a P10 in place upside of 395 MMbbl. In addition, four recent nearby discoveries by CNOOC immediately to the West of the Jade Prospect are filled to their P10 potential or better. All four CNOOC discoveries have gas clouds showing in the overburden on seismic.


Steve Larratt, who is something of an oil expert, has produced several videos for the benefit of lay investors who may be unfamiliar with O&G geology and terminology.

Empyrean's excellent quality 3D seismic indicates a classic "fill to spill" geological setup in the basin, and a robust regional seal, that provides the Jade and Topaz prospects with a genuine possibility of being filled similarly to nearby discoveries. The Jade and Topaz prospects both have gas clouds, like nearby discoveries, in the overburden on 3D seismic. Dry wells nearby do not have gas clouds. The Jade Prospect is the first of the three identified prospects within Block 29/11, containing the Topaz and Pearl prospects. The combined audited mean in place potential of all three prospects is 884 MMbbl and a P10 in place upside of 1,588 MMbbl. The post-stack seismic inversion study showed Jade and Topaz both have the potential for excellent carbonate build-up reservoir quality with excellent porosity and permeability. Like nearby discoveries, any oil discovered is expected to be light oil in the 38-41 API range. These attributes, combined with the potential for exceptional natural reservoir drive, support the potential for excellent recovery rates.

The Jade Prospect will cost US$12.3 million to drill, significantly cheaper than the expected cost of $18.5million. Empyrean recently raised the amount required to drill, and they have approximately 62 million warrants exercisable at 12.5p or less, which potentially raises around US$9m should they be exercised. Testing costs are estimated at US$7.5m, so the exercise of the warrants can potentially negate the need for a further raise for testing. Gaffney Cline has assessed the Jade prospect to have an Oil in Place (STOIIP) potential of 225 MMbbl (mean) with an upside case of 395 MMbbl (P10).

In a note to its clients on Friday, 8 March, First Equity argues, “Drilling success at Jade would focus investor attention on the potential of the Topaz prospect, which has a P50# estimate of 434m barrels, which therefore adds even more potential value to Empyrean Energy and strengthens the investment case (+135p to +278p per share on a P50 or P10 discovery basis respectively).”;

Cenkos explains, “any exploration success at Jade would see its 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).”

[digger2779] 12/4/2022 16:39

Stewart and crosseyed. Thanks.

[starzerus] 12/4/2022 16:35

Cheers xeyed

[10owen] 12/4/2022 16:30

Thanks Cross.

[jamesiebabie] 12/4/2022 16:29

xi'd - a gentleman as ever. Thank you.

[crosseyed] 12/4/2022 16:25

I have decided to alter the basis for the volume and valuation table in the header (within the CHINA tab) in that I am now using the estimates provided by Cenkos for the Jade propsect.

I have included £/share estimates using the PMean and P10 volume figures determined by Gaffney, Cline & Associates (last updated at 9/11/2018) taken from the latest Cenkos update of 11/04/2022 (see post 47087 provided by pro s2009) where estimates are determined for three risk categories:
- Before the results of the test drilling of the Jade prospect which is now in progress;
- After the completion of the test drilling, which may also lead to further testing of identified hydrocarbon zones, assuming success in confirming commercial volumes;
- At the start of full commercial production.

At this stage, I have simply pro-rated the Cenkos valuation figures for Jade to provide valuations for the Topaz and Pearl prospects.

The valuations are incremental. I have included a TOTAL row as an indication of the upper ranges of what we might expect assuming commercial hydrocarbons are found.

Regards,
c

[abergele] 12/4/2022 16:23

(ii) are offering us shares at 11p exactly

so 239+240 could well be buys in the ? box.
.g.l.all

my belief is 238-242 are buys at 11p

[stewart4990] 12/4/2022 16:09

DiaryBeach,

A ridiculous comment, but each to their own, I say a climb to 15p and above.

[stewart4990] 12/4/2022 16:06

Digger,

You are correct based on the comments "one of the most anticipated drill on AIM in 2022."

I assume the CLN and other conversions at a lower price are holding it back. In addition a number will de-risk although if I was going to de-risk I would wait either for Duyung to come in or wait until the conversions etc have completed, its a 26 day drill, so I am ok with the wait, been waiting 16 years and 5 years or so for this drill, to me yes a slight disappointing start but its only been a couple of days and volume good.

Judi, had a look at Leemimg, I follow him on Twitter, not sure if I can get into it without being a subscriber, Ill ask, he let be see his article last time, usually very good.

Anyway everyone is on Telegram including me LOL

[diarybeach] 12/4/2022 15:59

Agreed. We may now see a steady drift back down to 7/8p pending drill results.

[daler1966] 12/4/2022 15:58

Good time to load up

[digger2779] 12/4/2022 15:47

Bit of a disappointing reaction so far to spudding news.

[blakieboy7] 12/4/2022 15:33

Thanks JJ - anyone subscribed?

[abergele] 12/4/2022 11:46

Laz,
even the ADVFN trades ..
just had a quote (ii) of 11.245p to buy as a similar trade went into the sells column.
they are "sets" to deceive even,,a pun...hohooo please leave the stage now,,ok..
tempted to take some more,mmm

[lazarus2010] 12/4/2022 11:05

ps and even the charts are sh*t!!

[lazarus2010] 12/4/2022 11:04

JJ, this is now the 'Chat about general sh*t, with EME charts' thread ;-0

Telegram is where the in crowd hang out these days ;-)