21st Jan 2019 14:34
LONDON (Alliance News) - Empyrean Energy PLC on Monday said an independent audit of its Mako gas field located offshore Indonesia has confirmed much of the previous technical assessment.
The Mako field is situated within the Duyung production sharing contract, which is owned and operated by West Natuna Exploration Ltd. Empyrean owns a 10% shareholding in West Natuna Exploration, while Conrad Petroleum Ltd holds the remaining 90%.
Gaffney Cline & Associates conducted the audit and found gross 2C contingent resources in the field of 276 billion cubic feet recoverable dry gas. Gaffney Cline also found gross 3C resourced of 392 billion cubic feet.
Moreover, Gaffney Cline identified exploration targets under the Mako field "with potential to be more than twice the size" of the existing discovery.
Empyrean Chief Executive Tom Kelly said: "The audit by [Gaffney Cline] provides a tremendous endorsement of the Mako gas field, confirming much of Conrad's and our own technical assessment of the field. More work on a given field-whether drilling operations, technical maturation, or administrative progress...reduces risk, removes uncertainty and allows for more accurate appraisal and valuation."
The oil and gas development firm also announced that West Natuna Exploration has converted the Duyung production sharing contract to the Indonesian government's new gross split production sharing contract structure.
The gross split contract replaced the previous cost recovery scheme with a higher headline contractor share of revenue.
"The conversion of the Duyung [production sharing contract] to a gross split [production sharing contract] is a step in the right direction resulting in strengthening project economics while at the same time lessening the bureaucratic burden on the execution of the project. Rarely do you get such a unique mix of low risk appraisal coupled with a potentially high reward exploration target under an advantageous structure. Empyrean looks forward to continuing to work closely with Conrad to unlock value from the Duyung [production sharing contract]," said Kelly.
Shares in Empyrean were up 3.9% at 10.00 pence on Monday.
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