Empyrean Energy plc ("Empyrean" or the "Company"), the oil and gas development company with interests in Australia, Indonesia and the United States, is pleased to announce that, further to the announcement on 6 November 2024, it has successfully completed the acquisition of an option to participate in a conventional oil exploration project (the "Wilson River prospect") from Apnea Holdings Pty Ltd ("Apnea").
The Wilson River prospect is situated close to existing infrastructure in the prolific Cooper Basin in South West Queensland, Australia, and adjacent to several producing oil fields operated by Santos-Beach (Cooper Basin JV) and Bridgeport Energy.
The Wilson River prospect lies within lease ATP 1173 and is being prepared for near-term drilling once final surveys are complete and permits granted. Material progress has been made since November 2024 to progress the pre-drill preparations including finalisation of well design, testing and completion protocols, long lead item procurement, rig service guarantee payment, land access agreement and commencement of required surveys. The Wilson River prospect has multiple stacked reservoir targets, lies within a NW to SE oil migration pathway and shares similar structural orientation and features to fields immediately NW of the prospect.
Based on current rig availability, and subject to the completion of surveys and permitting, the well is scheduled to be drilled in March 2025.
The Wilson River prospect has been mapped with a combination of 2D and 3D seismic and has estimated prospective oil in place in the range of 8.7MMBOE to 37.4MMBOE with a mean of 21.3MMBOE. Nearby fields have recovery factors in the more prolific formations of up to 59 percent, depending on a range of factors including reservoir quality.
The Option allows Empyrean to earn a minimum 40 per cent. Working Interest in the permit by paying two-thirds of the gross cost of drilling an exploration well at the Wilson River prospect, estimated at approximately AUD$2.8m (gross). Apnea previously entered a binding agreement to jointly fund the drilling of the Wilson River 1 well with Condor Energy Services Limited ("Condor Energy"), an experienced Australian based well services and drilling company with recent drilling contracts completed nearby in the Cooper Basin. Empyrean and Condor Energy will become Joint Venture partners with the current leaseholder of ATP1173, Chi Oil and Gas Pty Ltd ("Chi Oil"), and will earn into the project by funding the Wilson River 1 well. Under the agreement, Condor Energy will fund the balance of costs to drill the Wilson River 1 well. Chi Oil and Empyrean have negotiated a competitive fixed price agreement with Condor Energy to drill and test the well based on an Authority For Expenditure ("AFE") that formed part of the binding agreement to jointly fund the Wilson River 1 well. Chi Oil and Empyrean are currently finalising the drilling contract with Condor Energy along with a definitive Farm In Agreement and Joint Operating Agreement.
Related Party Transaction
Apnea is a company wholly owned by Thomas Kelly, Managing Director of Empyrean, and the acquisition of the Option therefore constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Under the terms of the acquisition of the Option, Apnea will receive consideration in the form of new ordinary shares in Empyrean representing 5 per cent. of the enlarged issued capital of Empyrean at the time, but only in the event that the Wilson prospect is declared a commercial discovery. The Company's independent Directors (Gaz Bisht, John Laycock and Patrick Cross) consider, having consulted with the Company's nominated adviser, Cavendish, that the terms of the acquisition are fair and reasonable insofar as the Company's shareholders are concerned.
Empyrean Technical Director, Gaz Bisht commented, "Empyrean is pleased to have secured the opportunity to drill this exciting conventional oil target nearby to existing Santos-Beach and Bridgeport discoveries. Empyrean is also excited to be working alongside the Chi Oil and Condor Energy teams to plan for and execute this upcoming drilling program. Empyrean is encouraged by the fact that Condor Energy are prepared to put equity on the line and take a direct participating interest in the Wilson River 1 well."
The information in this announcement has been reviewed by Empyrean's technical director Gaz Bisht, who has over 33 years experience as a hydrocarbon geologist and geophysicist.