Empyrean makes up its mind to drill ‘robust and large’ target off China

After a comprehensive analysis of the Jade prospect well results, AIM-listed oil and gas exploration company Empyrean Energy has come to a decision to embark on the second phase of exploration drilling in Block 29/11 offshore China with plans to drill another high-impact prospect.

While the drilling of the Jade well proved that there was no oil migration into the Jade trap, Empyrean in early May revealed its intention to proceed with the drilling of the second prospect – known as Topaz – within Block 29/11 based on the preliminary assessments of the Jade well results and the ongoing agreement with its partner, China National Offshore Oil Company (CNOOC), to further cooperate in regards to follow up post-well analysis.

During the exploration phase, Empyrean holds 100 per cent interest in Block 29/11 in China and serves as the operator of the block. Should a commercial discovery be made, its partner, CNOOC, may assume a 51 per cent participating interest in the development and production phase.

In an update on Friday, Empyrean confirmed the completion of a post-well analysis and informed about its decision to enter the second phase of exploration. This entails the drilling of the Topaz prospect and requires the payment of $250,000 to CNOOC, while the work obligation includes the drilling of an exploration well within two years.

This decision was made following a comprehensive post-well analysis, which confirmed the Jade well carbonate reservoir quality is better than the pre-drill estimate with a regional seal confirmed and depth conversion approach validated, including a total thickness of 292 metres and porosity in the range of 25 to 27 per cent. As these parameters can now be more confidently mapped across the firm’s 3D data set, reservoir, seal and trap validity of the Topaz prospect has been enhanced by the Jade well data, according to Empyrean.

The company elaborates that CNOOC geochemical and basin modelling experts provided assistance in assessing the critical elements of effective regional oil migration pathways as a part of the post-well evaluation, which led to positive implications for the Topaz prospect. Based on several oil discoveries in the area, CNOOC has identified three key elements for effective regional oil migration: a deep sag for oil generation, a deep fault for efficient vertical migration that has reactivated at the peak time of oil expulsion (10Ma), and a carrier bed for lateral migration to the prospect.

Therefore, Empyrean decided to enter the second phase of exploration and drill the Topaz prospect based on a post-drill technical evaluation, and CNOOC-assisted migration pathways assessment.

Tom Kelly, Empyrean CEO, remarked: “Being able to combine our excellent quality 3D seismic data with the confirmed well data and post well analysis has improved the validity of the Topaz prospect as a robust and large drilling target of approximately 891 million barrels in place (P10). Empyrean looks forward to maximising the value from its interest in the Mako gas field and positioning to drill the exciting Topaz prospect.”

Empyrean’s post-well evaluation indicates that the Topaz prospect has the potential for oil charge from two kitchen/source rocks – the Baiyun North Sag and the Baiyun East Sag – with the latter being bio-marked as the proven source rock for CNOOC light oil discoveries to the immediate West of Block 29/11. 

Located within Block 29/11 immediately south and down-dip of the Topaz prospect, the Baiyun North Sag has all three key elements required for successful oil migration, since, it is a deep sag that is in the timing and depth window for oil generation, says Empyrean. The AIM-listed company has identified a suitable deep fault for efficient vertical migration that reactivated at the peak time of oil expulsion approximately 10 million years ago (10Ma).

Moreover, the firm claims that a thick carrier bed exists for lateral migration to the Topaz prospect, which has been confirmed during the drilling of the Jade well and is mapped on the company’s 3D data set.

Furthermore, Empyrean elaborates that the gas shown within the “gas cloud” zone in the overburden at the Jade well is now interpreted to have migrated from Baiyun North Sag via reactivation of a nearby fault, approximately 800 metres away rather than coming from basinal faults extending into Baiyun East Sag which is approximately 20 km away. The company sees the identification of this nearby fault that extends into the Baiyun North Sag as the most likely explanation for the gas shows in the Jade well.

In light of this, Empyrean believes that this interpretation enhances the prospects of Baiyun North Sag as a potentially valid additional source rock and, in turn, the likelihood of the Topaz prospect having access to two mature source rocks/kitchens.

In addition, the company further adds that a CNOOC regional migration map indicates that Topaz has the potential for being charged from the proven Baiyun East Sag via spill from the CNOOC discovery well LH 23-1d.

“Empyrean has also started to assess a number of additional oil and gas projects that it believes may enhance a balanced portfolio of opportunity and will update shareholders as required,” concluded Kelly.