Empyrean ticks off ‘major box’ at Chinese well

AIM-listed oil and gas exploration company Empyrean Energy has backed up its pre-drill interpretation of seismic data related to the Jade prospect well – located in Block 29/11 offshore China – with drilling results confirming the presence of gas clouds thanks to elevated methane levels, which support the firm’s hopes of making a light oil discovery.

Following several delays, Empyrean Energy spudded the LH 17-2-1 well on the Jade prospect on 10 April 2022 with the China Oilfield Services Limited (COSL)-owned NH9 rig.

Empyrean is the operator of Block 29/11 in China with 100 per cent working interest during the exploration phase. However, its partner, China National Offshore Oil Company (CNOOC), may assume a 51 per cent participating interest in the development and production phase in the event of a commercial discovery.

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In an update on Tuesday, Empyrean revealed that its drilling results have validated the pre-drill interpretation of seismic data including the presence of gas clouds over the Jade and Topaz prospects. The company explained that the NH9 semisubmersible rig made progress at LH 17-2-1 with the drilling of the 12-1/4″ section to 2150 metres MD and current operations are preparations for running 9-5/8″ casing.

While elaborating on the results amassed during the drilling of the 12-1/4″ section, the firm confirmed elevated methane (C1) ranging from 227 parts per million (ppm) to 15440 ppm was recorded at the gas chromatograph during mudlogging along with negligible C2 and no C3 components.

Tom Kelly, Empyrean CEO, commented: “The first technical objective of the Jade well has now been drilled. The validation of “gas clouds” through the presence of elevated methane levels in exactly the depth zone we interpreted on the excellent quality seismic data proves that the gas clouds exist and supports the company’s pre-drill interpretation that the methane is probably coming from light oil in the anticipated reservoir section. This is a major box now ticked, if we are to make a light oil discovery at Jade.”

Furthermore, Empyrean informed that higher values of methane (C1) ranging from 4190 ppm to 15440 ppm were recorded in the zone between 1550 metres to 1800 metres MD, which was interpreted pre-drill to be a gas cloud zone. As the company was in regular contact with CNOOC to fully understand and cross-check the significance of elevated methane (C1) against CNOOC discovery wells, the firm corroborated comparable methane ranges in CNOOC’s oil discovery well LH 23-1-1d – located 10km Southwest of the Jade prospect – which also exhibited a gas cloud on seismic data.

COSL-owned NH9 rig; Source: Nevsky Shipyard

In light of this, Empyrean disclosed that the elevated methane readings to date have validated its pre-drill interpretation of seismic data, including the presence of a gas cloud in the overburden above the Jade prospect. This feature is also present in the Topaz prospect.

The Jade prospect has a GCA audited mean in place potential of 225 MMbbl and a P10 in place upside of 395 MMbbl and it is the first of the three identified prospects within Block 29/11, which also contains the Topaz and Pearl prospects. These three prospects have combined audited mean in place potential of 884 MMbbl and a P10 in place upside of 1,588 MMbbl. Similar to nearby discoveries, any oil discovered is expected to be light oil in the 38-41 API range.

The company’s hopes are further fuelled by the fact that two dry wells, drilled in the 1990s by AMOCO on the eastern flank of Empyrean’s Block 29/11 permit area, did not display any gas clouds nor did they have elevated methane (C1) whilst drilling the same geological formation.

In line with its findings based on the latest elevated methane (C1) readings, Empyrean has upgraded its internal Geological Chance of Success (GCoS) for the Jade prospect from 41 per cent to 65 per cent. In addition, the company has also upgraded the GCoS for its Topaz prospect from 35 per cent to 47 per cent.

“The comparisons to nearby CNOOC discovery wells look very compelling. Drilling operations continue to run smoothly and safely, with progress to date right on schedule,” added Kelly.

The firm plans to drill the 8-1/2″ hole to the TD of 2860 metres MD, following the setting of 9-5/8″ casing. The objective of the Jade well is to test for hydrocarbons down to TD of 2860 metres MD.