Empyrean to ‘let the drill bit do the talking’ after firming up rig slot

Following almost six years of early-stage exploration, Empyrean Energy has set all the wheels in motion to drill the Jade prospect well, located in Block 29/11 offshore China. To this end, the firm has managed to work out a rig slot with its Chinese partners to start drilling operations by mid-April.

The previous timeline for the drilling of the Jade prospect, which was planned between 15 December to 30 December 2021 after Empyrean and China Oilfield Services Limited (COSL) executed an integrated drilling contract in November 2021, was delayed due to poor weather conditions.

On the heels of discussions with COSL and China National Offshore Oil Company (CNOOC) to finalise rig availability and an anticipated spud date for the Jade prospect well, Empyrean revealed on Friday that COSL would drill the Jade well immediately following completion of operations at the current CNOOC well.

Tom Kelly, Empyrean CEO, remarked: “After nearly six years of early-stage exploration, including modern 3D seismic and rigorous geological studies we are finally ready to drill the exciting Jade well. We are literally weeks away from testing the 225-395 mmbbl light oil target at Jade. In terms of impact – and by that I mean the potential impact a discovery, within the 225-395 mmbbl range, would have in the success case upon our current market capitalisation – Jade is one of the most exciting wells to be drilled globally in 2022.”

Empyrean is the operator of Block 29/11 in China and has a 100 per cent working interest during the exploration phase, while its partner, CNOOC, may assume a 51 per cent participating interest in the development and production phase in the event of a commercial discovery.

As previously reported, Empyrean had been in discussions with COSL and CNOOC to establish rig availability and a rig slot to drill the Jade well after the well site survey was completed, as CNOOC has the COSL-owned Nanhai 9 (NH9) rig under contract for approximately the next 12 months.

As a result of these discussions, CNOOC has created a slot in the rig’s schedule for the Jade well to be drilled immediately following its own well, which is currently being drilled using the NH9 rig, according to Empyrean. The company anticipates that the rig will become available by the end of March – if the current well does not encounter testable hydrocarbons – or approximately two weeks later – mid-April – if a testing program is required.

Furthermore, the Empyrean/CNOOC EnerTech team will be present both onshore and offshore on the rig, during the drilling of the Jade well, while the offshore team will include a hand-picked drilling supervisor, well site geologist, mudlogger and an electric logging expert. The CNOOC EnerTech team – hired last November to manage a number of critical pre-drilling permitting and logistical requirements – has vast local hands-on experience managing the drilling of wells within the Pearl River Mouth Basin where the Block 29/11 permit sits.

Moreover, after the recently completed well site survey over the Jade drilling location, Empyrean is expecting to receive the final survey report within the next few days and anticipates that the final permit to drill Jade will be applied for and received within approximately one week after getting this report.

With the aim of planning and executing a safe drilling campaign at Jade, the CNOOC EnerTech team and Empyrean are taking every precaution, thus, the NH9 rig and its drilling team are drill fit, based on the firm’s latest statement. At this stage, it is envisaged that the NH9 rig will be mobilised straight to the Jade well location from its current position without the need to go back to port.

Although, following a safety inspection, there would be approximately two days mobilisation to the Jade well location from the current CNOOC well location. From the spud date – now anticipated to be early April to mid-April – the Jade well is expected to take approximately 26 days to drill to total depth on a trouble-free basis.

Empyrean further explained that there are no overly challenging drilling zones anticipated with the Jade well design and program and if the well intercepts a hydrocarbon zone – as anticipated – then testing is planned to take approximately a further two weeks.

“We are particularly appreciative of CNOOC facilitating a rig slot for Empyrean to drill Jade using the NH9 rig. Every effort and precaution is being taken to drill the Jade well safely. We now need to let the drill bit do the talking! We look forward to providing our shareholders with further updates as we get even closer to spudding the exciting Jade well,” concluded Kelly.

The company also assured that a more accurate confirmation of rig mobilisation and exact spud date will be announced along with further drilling details in due course.