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Q4 2014 Production from Sugarloaf AMI, Texas
Empyrean Energy, an US onshore oil, gas and condensate exploration, development and production company with assets in Texas and California, has provided an update in respect of production from its flagship Sugarloaf AMI Project in the prolific Eagle Ford Shale, Texas, for the three month period to the end of December 2014.
Empyrean has a 3% working interest in the Project, which is operated by Marathon Oil Company, a subsidiary of US major Marathon Oil Corporation (NYSE: MRO).
Highlights
· Significant increase in total production to Empyrean’s interest from Sugarloaf for Q4 2014
o 166,572 boe net to Empyrean’s interest before royalties and costs and 111,921 boe net to Empyrean’s interest after royalties, representing an increase of 39% and 38% respectively on Q3 2014
· Average daily production from Sugarloaf for Q4 2014 of 1,811 boe net to Empyrean’s interest before royalties and 1,217 boe net to Empyrean’s interest after royalties
· As at 31 December 2014, there were a total of 187 gross producing wells at Sugarloaf
· As at 20 March 2015, there were a total of 205 gross producing wells including 21 in the Austin Chalk
· Benefited from improvement in single well recoveries / productivity and from further improvement in drilling and completion cost efficiencies during 2014
· Awaiting results of first “frac and stack” pilot programme
· Sugarloaf remains one of the lowest marginal cost shale plays in the USA
Empyrean CEO, Tom Kelly said, “Despite extremely challenging oil prices recently, our production from Sugarloaf is continuing to grow steadily as further development wells are brought on line. We are fortunate that our project is located in the liquids rich sweet spot of the Eagle Ford Shale play and therefore enjoys relatively low marginal costs of production compared with other shale plays across the USA.
“Marathon continues to optimise well performance and drilling and completion costs continue to decrease. We are confident that further data gathered from existing Austin Chalk wells, in conjunction with additional Austin Chalk wells coming on line at lower spacing density, has the potential to deliver a significant increase in contingent resources along with an increase in proven reserves for existing producing locations in the short to medium term.
“In response to the continued and significant level of drilling activity at Sugarloaf, we are taking steps to adjust the basis on which we report production figures in order to ensure that we are in a position to update shareholders on a timely and accurate basis, and in a manner consistent with our revenue reporting.”
