EMPYREAN ENERGY (EME): CHART AND DISCUSSION THREAD (moderated)

Some info on Margarita:-

1. Shallow Drilling Program Farmout
AIM listed Empyrean Energy PLC (“Empyrean”) has farmed into the drilling of six of the inventory of shallow oil and gas prospects and has the option to participate in further drilling of the shallow prospect inventory on the same terms and conditions of drilling as the six prospects. Empyrean also has an option to farm into the drilling of three of the deep prospects (>2,000 metres depth) on completion of the six shallow well program. The drilling of the six shallow wells will be broken into two phases, the Initial Wells program and the Final Wells program. A commercial success in the Initial Wells program will trigger the Final Wells program and Empyrean’s immediate commitment to this phase of the program.

Empyrean will contribute to well funding and earn equity from each of the operating USA subsidiaries of Sun Resources, Victoria Petroleum NL (“Victoria”) and Wandoo Energy LLC (“Wandoo”). Wandoo in turn has a part carry on the drilling and completion from Sun Resources and Victoria as per an agreement between the parties dated 5th December 2005. The table below outlines the final equity position of the participants. For all subsequent completions and development activity on a successful well, the parties contribution to the costs will be on the basis of final equity %.
Participant Final Equity %
Sun 20.0000
Victoria 20.0000
Wandoo 16.0000
Empyrean 44.0000
Total 100.0000
As part of the Empyrean farmin, Empyrean will reimburse land and prospect costs on each of the prospects it has a commitment to drill and in return on success on a prospect will preferentially recoup its land, prospect and promoted dry hole well costs on that prospect only from production at the expense of Sun Resources, Victoria and Wandoo.