10th May 2007 08:36
Empyrean Energy PLC10 May 2007 Empyrean Energy PLC ("Empyrean" or the "Company"; Ticker: (EME)) Increased interest in the Sugarloaf Project Area, ("Sugarloaf") Texas USA ------------------------------------------------------------------------- • New Agreement signed with Texas Crude Energy Inc ("TCEI") covering a sixteen (16) well program over Block A and Block B• New working interest on any well in the 16 well program in respect of Block A• Working Interest increased from 6% to 18% on any wells in the 16 well program operated by TCEI in respect of Block B Empyrean has entered an Oil & Gas Exploration And DevelopmentAgreement with TCEI to participate in a new sixteen (16) wellprogram covering two projects, "Block A" and "Block B". In Block A, TCEI has an interest through an Operating Agreement witha major international oil and gas company ("Block A Operator")(nameundisclosed for confidentiality purposes and to preserve and protectcompetitive advantage). In Block B, TCEI is the operator andEmpyrean already has a 6% working interest in this Block via aprevious agreement and its participation in the drilling of theSugarloaf-1 well. The new agreement covers the next sixteen (16) wells to be drilledon either Block A and / or Block B. The agreement provides forEmpyrean to pay 12.5% of costs to first production to earn a workinginterest of 7.5% in wells drilled on Block A and to pay 20% of coststo first production to earn a working interest of 12% in wellsdrilled on Block B. Empyrean's agreement covering a pre-existing 6%working interest in Block B remains unchanged and is in addition tothis new agreement. The Block A Operator has drilled a first exploratory test well onBlock A and this well is a discovery well which it has been reportedflowed gas and associated condensate on test. This exploratory testwell does not form part of the 16 well program. On Block B, duringthe drilling of the Sugarloaf-1 well Empyrean previously reported tothe market on the 29th September 2006 a 92 feet (28 metres) zone ofpossible gas pay, interpreted from wire-line logs and gas shows inCretaceous age carbonates. Preparations are underway for testing tobe carried out on these possible pay zones. It is estimated that wells in this program will have a total cost in theorder of US$5million each. Empyrean's agreement with TCEI is structuredon a well by well basis with the right to proceed or withdraw at anystage. If Empyrean withdraws then wells earned to that date areprotected. It is also understood that the Block A Operator is preparingfor drilling to commence on the next well in Block A within the next 2months. A further update will be provided as soon as confirmation of the date forspudding the first well in this sixteen well program is advised by TCEI,along with testing dates for the Sugarloaf-1 well. Commenting today, Empyrean's Commercial Director, Tom Kelly said "Today'sagreement with Texas Crude Energy allows Empyrean to increase its interest inthe Sugarloaf Project Area and in particular the shallow potential pay zones tobe tested in the Sugarloaf-1 well. We look forward to testing these chalk zonesin the Sugarloaf-1 well and to the commencement of the sixteen well program". The information contained in this announcement was completed and reviewed by theTechnical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who hasover 40 years experience as a petroleum geologist. For further information:Laurence Read/ Ed PortmanConduit PRTel: +44 (0) 207 429 6605/ +44 (0) 7979955923 Empyrean Energy plcTel : +44(0) 207 182 1746 Rod Venables/ Cecil JordaanHB CorporateTel: +44(0) 207 510 8600 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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