Ebenezer3
2 weeks ago
Empire Energy Group Ltd (ASX:EEG) Completes $46.8 Million Capital Raise
EMPIRE COMPLETES $46.8 MILLION CAPITAL RAISE CORNERSTONED BY BRYAN SHEFFIELD AND LIBERTY ENERGY
Sydney, April 17, 2024 AEST (ABN Newswire) - Empire Energy Group Ltd (googlechartASX:EEG) (googlechartEEGUF:OTCMKTS) is pleased to announce that it has received binding firm commitments to raise $39 million (before costs) via a strongly supported two-tranche placement of new fully paid ordinary shares ("Shares") to institutional and sophisticated investors at $0.16 per Share ("Placement").
- Commitments received from existing and new institutional and sophisticated investors for a strongly supported two-tranche placement to raise $39 million
- Bryan Sheffield and Liberty Energy Inc (googlechartNYSE:LBRT) ("Liberty Energy") have demonstrated their support for Empire with each investing US$5 million (~A$7.7 million) in the placement
- Daly Waters, a subsidiary of Formentera Partners (a US based private equity firm founded by Bryan Sheffield) and Liberty Energy have each independently acquired a 2.25% royalty interest in EP187 for US$2.5 million (~A$3.9 million) raising an additional US$5 million (~A$7.7 million).
- Empire is now funded to drill a 3km fracture stimulated horizontal pilot development well in EP187 and to further progress engineering and preparation for installation of Carpentaria Pilot Project surface facilities
- Empire anticipates commencement of commercial production and gas sales in 2025
- Empire Directors have demonstrated their continuing support for Empire by committing to invest an additional $325,000 (subject to shareholder approval)
Comments from Managing Director Alex Underwood:
"The Empire team is delighted to have received the support of key US strategic investors in the Beetaloo Basin, alongside investments from new and existing institutional and sophisticated investors under the placement.
Bryan Sheffield and his team have an outstanding track record of value creation in the US shale sector, and they have made significant investments across the Beetaloo Basin. The strategic alignment being created through Bryan's further investments announced today will be of material value to Empire's shareholders.
Liberty Energy is one of the largest providers of hydraulic fracture stimulation services in the US shale market and they will soon be sending a large frac spread to Australia to service the nascent Beetaloo Basin. Liberty also offers industry leading subsurface engineering services to help their customers 'spiral up' from data to value. Working with Liberty will facilitate improved well productivity and cost efficiency as we move from the exploration phase into the production phase.
We are grateful to Bryan and his team, the Liberty team and existing and new shareholders who have participated in this raise for their support.
The Beetaloo Basin is rapidly approaching a key inflection point which I believe will create substantial value for shareholders. We are now well funded to drill, stimulate and flow test our first pilot development well and to progress our field development plans as we aim to commence gas sales in 2025 into the undersupplied Northern Territory market."
Two-Tranche Placement
Blue Ocean Equities Pty Limited and Morgans Corporate Limited acted as the Joint Lead Managers for the Placement.
Sheffield Holdings LP and Liberty Energy have provided cornerstone support, with each investing US$5 million in the Placement.
Empire Directors have also demonstrated their continuing support for Empire by committing to invest an additional $325,000 (subject to shareholder approval).
Placement Details
Empire will issue a total of 243,750,000 Shares at an issue price of $0.16 per Share to raise $39 million (before costs) under the Placement. The issue price represents a discount of:
- 13.5% to Empire's closing share price on Friday 12 April 2024; and
- 9.3% to the 15-day VWAP prior to the trading halt.
The Shares will be issued in two tranches. The first tranche of 193,321,700 Shares will be issued under the Company's existing placement capacity under Listing Rules 7.1 and 7.1A ("Tranche 1"). It is anticipated that settlement of Tranche 1 will occur on Wednesday 24 April 2024 with the Shares being allotted on Friday 26 April 2024.
The second tranche will be subject to shareholder approval at the Company's Annual General Meeting, which is scheduled to occur on or around Tuesday 28 May 2024 and, if approved, will result in the issuance of 50,428,301 Shares ("Tranche 2"). The settlement of Tranche 2 is anticipated to occur on or around Monday 3 June 2024 and allotment is anticipated to occur on or about Wednesday 5 June 2024.
Sale of EP187 Royalty Interests to Daly Waters and Liberty
Empire has also sold 2.25% overriding royalty interests ("ORRI") over the 110,000 acre Carpentaria Project within EP187 on a net-back basis (same formula as NT Government royalty) for US$2.5 million in cash to each of Daly Waters Royalty, LP and Liberty Energy Australia Pty Limited. Funds raised under the royalty transaction will be applied to the development of the Carpentaria Pilot Project in EP187 and for working capital.
All of Empire's other Northern Territory exploration permits remain free of royalties other than to the Northern Territory Government and traditional owners.
About Empire Energy Group Ltd
Empire Energy (ASX:EEG) (OTCMKTS:EEGUF) is a Sydney based Australian oil and gas company holding 100%-owned and operated assets with unconventional targets in the Northern Territory Beetaloo Sub-basin and central trough of the McArthur Basin.
Empire is an active Beetaloo Sub-basin operator, focused on maturing its assets to production. Following the successful appraisal drilling and flow testing of the Carpentaria-2H and 3H wells in Empire's EP187, Empire is targeting first gas flow in H1 2025 at its Carpentaria Pilot Project. The Pilot has a targeted sales gas rate of up to 25 TJ per day utilising the existing McArthur River Pipeline.
Empire Energy Group Ltd
E: info@empiregp.net
T: +61-2-9251-1846
F: +61-2-9251-0244
WWW: www.empireenergygroup.net
https://www.abnnewswire.net/press/en/124853/Empire-Energy-Group-Ltd-(ASX-EEG)-Completes-$468-Million-Capital-Raise.html
Ebenezer3
3 weeks ago
https://www.smh.com.au/business/companies/empire-leading-the-charge-in-beetaloo-gas-revolution-20240404-p5fhhn.html#amp_tf=From%20%251%24s&aoh=17122346629166&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fwww.smh.com.au%2Fbusiness%2Fcompanies%2Fempire-leading-the-charge-in-beetaloo-gas-revolution-20240404-p5fhhn.html
Empire leading the charge in Beetaloo gas revolution
By Matt Birney
April 4, 2024 — 3.46pm
There’s a quiet revolution taking place in the Australian gas industry and it’s called the “Beetaloo Basin.”
The quaintly named Beetaloo Basin is a vast tract of land in the Northern Territory that is thought to contain almost biblical-scale accumulations of gas that, in time, could almost single-handedly solve the growing gas crisis in the eastern states.
The Beetaloo geological sub-basin lies 500km south-east of Darwin, covers about 28,000 square kilometres in total and stretches across about 350km from west to east.
Some say the Beetaloo is likely harbouring 500 trillion cubic feet (TCF) of gas. To put that in context, WA’s revered North West Shelf offshore oil and gas field, one of the largest investments ever made in Australian hydrocarbons, has only delivered about 18 TCF of gas over time and now has about 6 TCF of gas left.
Whilst the Beetaloo has not yet produced any gas commercially, the race is on to do so and several notable players now hold ground out there where they are looking to prove up flow rates and get into commercial production.
The leader of that pack is probably ASX-listed Empire Energy, the largest landholder in the basin by far, with an extraordinary 3 million net effective acres of ground under its control.
Perhaps even more extraordinary is the $130m market-capped Empire Energy’s prospective resource estimate of 47TCF of gas on its own ground. Whilst the company still has some work to do to get that resource up to reserve status, any part of that number that converts into reserve would still put the North West Shelf’s 6TCF in the shade.
The Beetaloo has been likened geologically to the unconventional Marcellus shale in eastern America. Prior to 2008 the Marcellus shale was considered to have inconsequential natural gas potential but is now believed to hold the largest volume of recoverable natural gas in the United States.
In 2012, the Marcellus Shale became the leading producer of both shale gas and overall natural gas in the United States. Two years later it was pumping out 14.0 billion cubic feet of gas per day (BCFD) and by 2019 it was responsible for producing 21 BCFD.
A fun fact is that Empire’s landholdings in the Beetaloo are roughly similar in size to core areas within the Marcellus shale. Notably, not even the leading producer of gas in the Marcellus shale, the US$16b EQT Corporation, comes close to the scale of Empire’s holdings with its 1m net acres.
Importantly, Empire’s four stacked shale reservoirs amount to a net thickness of more than 300m in the Carpentaria project, five times thicker than the prolific Marcellus shale suite at about 60m.
All of which begs the question, will the Beetaloo flow commercial gas because if it does, it will have a global impact on gas markets.
Empire says it does. The company has now drilled and stimulated two horizontal wells in the Beetaloo, its Carpentaria 2H and 3H wells. Normalised gas flows came in at 3.5 terajoules per day (TJ/d) per 1000m during testing – a number that Empire describes as “excellent.”
Management says after recent basin-wide appraisal drilling by its own field team in addition to industry heavyweights Origin, Tamboran, Empire and Santos, the project is assessed as being commercially viable.
The next big hurdle that all wanna-be gas producers face is infrastructure – i.e. how will they get their gas to market?
Empire’s Carpentaria project is fortunate when it comes to infrastructure. Its holdings basically smother the gas spur line that runs out to the McArthur River Mine to Empire’s east and Empire has already appointed energy infrastructure firm APA Group to commence pre-engineering studies to hook into the pipeline.
This connection would establish a link from the Beetaloo Basin through to APA’s Amadeus Gas Pipeline that pumps gas into Darwin, Alice Springs and regional centres in the Northern Territory.
The grand plan being developed by Empire and APA is to eventually work out how to connect the Beetaloo to the gas-hungry East Coast markets.
Before that happens however, Empire needs to build a pilot plant to commercially operate its 2H and 3H wells at Carpentaria. In December last year the company acquired a pilot plant from AGL who had no further use for its Rosalind gas plant after winding up its Camden Gas project.
Empire paid $2.5m to AGL for the plant that it says would likely have cost $100m, giving it a massive advantage when it comes to commercialisation. That plant has a maximum capacity of 42 TJ/d, albeit the initial plan is to produce 25 TJ/d from the 2H and 3H wells.
It will still have to spend money getting it to site and hooking it into the McArthur River pipeline and the company says a financial investment decision on that scope of work is now imminent.
Management says the 2H and 3H wells cost about $25m each to build however that number will likely be halved when it starts drilling wells at scale. Each well will produce about $80m worth of gas over its life and the company expects to pay the capex down for a well in just two years.
The opportunity for Empire to scale up its Beetaloo gas production is immense if gas flows end up coming out as expected from the early wells. Empire essentially has a three staged plan; initially produce up to 25TJ a day in phase 1 with first revenues of $110m a year expected by 2025 at plateau.
Phase two will see the company pump out 200TJ/d to supply the east coast of Australia that many say is currently experiencing a gas shortage crisis. The goal from phase 3 is to churn out 1BCF of gas a day and supply the LNG export markets. The company reckons it can land LNG in Tokyo Bay for just US$6.50 MMBtu.
And the rub? Well, Empire’s preliminary financial modelling shows a project net present value for phase 2 coming in at A$2.5b and phase three is showing an NPV of wait for it……A$14.5b.
And with the Marcellus shale’s biggest producer in the USA, EQT Corporation, currently valued at around $16b, maybe that phase three NPV is not so mind-boggling, albeit Empire has a lot of drilling and investing to do first and it will need to have its fair share of lady luck on its side when the gas starts to flow.
One thing seems certain however, if gas does successfully flow at commercial rates out of the Beetaloo, with its foot on 3m acres, Empire will have plenty to sell.
Ebenezer3
10 months ago
A rich resource bounty, but we need to get it right: Alex Underwood
22:20 Wed 14 Jun 2023
Elisha Newell
Empire Energy Group Ltd
ASX:EEG
OTC:EEGUF
Empire Energy Group Ltd - A rich resource bounty, but we need to get it right: Alex Underwood
Managing director Alex Underwood. Source: Empire Energy.
There’s a gigantic gas opportunity shaping up in Australia’s north and Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) MD Alex Underwood is in the thick of it.
The managing director has been at the helm for five years, transforming the company’s Australian portfolio into the largest acreage position in the NT’s Beetaloo Sub-basin.
Fast forward to today, mere weeks after the Northern Territory Government greenlit fracking in the Beetaloo, and Empire stands on the threshold of a sizeable development opportunity.
In this article:
Back then …
… And now
Gas remains in the mix
Community at the heart
New chapter for the Beetaloo
However, there’s a fine tightrope to walk. While the Beetaloo’s resource bounty represents significant upside, Empire needs to work with the region’s pastoralists and traditional owners to develop a vital asset that creates domestic energy security.
Underwood spoke to Proactive about his personal commitment to responsible production and sheds light on the role gas will play in the green energy revolution.
Back then …
It’s one thing to take a high-performing stock and build on its success. But for Underwood, his leadership journey has meant taking Empire through a 180 transformation.
When Alex joined the company in 2018 it was in a pretty challenging position: its core asset was subject to a moratorium on fracking, which meant no activity could be carried out in the field.
Beyond the situation in the basin, Empire’s finances were also a pain point.
“We had US$38 million of debt and that was secured against US oil and gas production that was only generating about US$4 million a year,” Alex remembers.
“In the office, it was just me and Kylie, our financial controller, who were trying to keep everything going.”
Although things looked bleak, Alex says he was drawn to the challenge.
“I’ve certainly always been a risk taker — often to my mother's great dismay when I was a teenager,” Alex laughs.
Things soon turned around. Shortly after Alex became MD, the moratorium was lifted, paving the way for exploration in the basin.
He also steered the company through an exhaustive recapitalisation process, meaning it could get some money back into the Beetaloo.
Five years on and Empire is leveraged to develop its extensive holding into a low-carbon operation — one that can provide critical energy security amid the east coast’s energy crisis.
Empire’s holding in the Beetaloo Sub-basin.
… And now
In early May, the Northern Territory Government made an announcement that will open the doors to a full-scale onshore gas industry: it’s allowing fracking to go ahead in the Beetaloo Basin.
This is a major development and not just for companies in the region. Last year, the Australian Competition and Consumer Commission (ACCC) reported that an energy crisis on the country’s east coast — triggering widespread supply issues and price hikes — was likely to last through winter 2023.
The ACCC forecast a 70% increase in gas demand for electricity generation, while high international gas prices also hit consumers’ pockets.
This phenomenon underscores the need for reliable domestic gas supply and the Beetaloo’s sizeable gas bounty is well placed to meet demand.
With this in mind, Underwood says the company plans to build on four years of exploration to deliver much-needed supply.
“Beyond the domestic opportunity we hope to increase liquefied natural gas (LNG) exports, already the NT’s largest source of foreign income and a significant contributor to Federal Government revenues,” he stated in early May.
Gas remains in the mix
While the green energy revolution remains front of mind, it’s important to remember the role oil and gas companies will play in global decarbonisation efforts.
“In this increasingly carbon-constrained world, gas is going to be a critical transition fuel,” Underwood notes.
“Ultimately there's going to be a competitive advantage for those sources of gas that have very low CO2.”
That’s where Empire’s focus lies: on building a sustainable, low-carbon operation that supports modern energy requirements.
Earlier this year, the Federal Government introduced safeguard legislation, essentially giving effect to its commitments to reduce Australia's emissions by 43% by 2030 and then ultimately getting to net-zero by 2050.
The mechanism lays down the law on gas supply, paying specific attention to prospective operations in the sub-basin to facilitate cleaner, greener production.
“First of all, gas from the Beetaloo will need to be scope one net-zero from the commencement of production but there's another requirement that new fields that feed gas into existing LNG plants will also need to be net-zero,” Underwood explains.
“We've been working on this in the background for quite some time.”
From Alex’s perspective, gas will always play a role in our modern energy mix.
“The reality is that 82% of all energy usage globally is still hydrocarbon based,” he explains.
“It's very clear to me — and I think a lot of other people in the broader energy industry — that there simply will not be net-zero without an orderly transition from the old system to the new system,” he continues.
That’s ultimately because renewables face one key problem: intermittency. And while battery technology is evolving rapidly, their intensive mineral and infrastructure requirements mean they’re a long way off powering the grid.
Community at the heart
Beyond the traditional carbon credit system, Alex is considering ways the business could reduce its carbon footprint while supporting Northern Territory communities.
“As part of our efforts to be a good corporate citizen and help generate more economic activity, one option we’re looking at is taking the capital that we would otherwise invest [in carbon credits] and helping Northern Territory-based businesses to develop their own carbon farming opportunity.”
One option on the table is human-induced regeneration, which involves planting trees to act as carbon sinks.
“We've had conversations with some of the pastoralists on whose properties we operate to look at that,” Alex says.
Another initiative is savanna burning, which involves deliberate burning in the early dry season to reduce the emissions released in large wildfires.
“For thousands of years, traditional owners have been managing these areas by deliberately setting smaller fires to manage the risk of big fire outbreaks,” he explains.
“It actually results in less carbon release in aggregate because you're more carefully managing the land.”
Considering the resource spoils Australia is known for, Underwood is a big advocate for prospecting our natural wealth with care.
“I believe the key to building a social licence for our industry is to demonstrate the environmental credentials of our products,” he concludes.
Regardless of a workforce’s size, Alex says a responsible operation can have a ripple effect on the local community. Although it may only create a certain number of on-site jobs, the money and people it brings to local businesses can have an exponential effect.
One of the best examples of this kind of impact? For Alex, it’s a motel that’s close to his heart.
The Heartbreak Hotel, Cape Crawford. Source: Heartbreak Hotel.
“There's a roadhouse about 80 Ks down the road from us called the Heartbreak Hotel — a great name for a remote roadhouse,” he laughs.
“They do a great steak by the way, if anyone's in that part of the world. But our activities can result in that business alone — just one business — having a great time, because people are staying there, eating, having a beer after work.
“It's these sorts of opportunities — out in these remote areas where there's little other economic opportunity — where we can actually really make a difference to people's lives.”
Next chapter for Empire
One area where Underwood believes Australia’s energy industry needs to step up is in the way it communicates its role in society.
“There's a bit of a perception about oil and gas, where it's just all of these people in glass towers,” he explains.
“I've seen the way they do it in America — you've got states like Texas and Oklahoma and Kansas where the oil and gas industry is just part of people's daily lives.
“I remember visiting Kansas once and going out to look at one of our fields … you see the nodding donkey wells dotted all over the place and the landowners benefit from it.”
Down under, Underwood says energy companies should talk more about their decarbonisation and ESG initiatives — especially considering Australia’s natural resource endowment.
And with all eyes on the Beetaloo right now, operating with a social licence — and valuing the safety and sustainability of your team — is Alex’s number-one priority.
“This can be a dangerous industry if you don't do things the right way, and I'm very proud of our safety track record.
“I'm ultimately the person responsible for lots of people's safety, and that really requires you to act with integrity.”
With all this in mind, one big question remains: What does Alex see in store for the Beetaloo asset?
“As a company, we are in this for the long haul. We’re not just looking to drill a few wells, de-risk projects and then sell off to a bigger player,” he clarifies.
“We take great inspiration from some of the great Australian success stories … but I think what’s most important is bringing people on the journey.
“We've got all the pieces of the puzzle on the board as it were, and really what we're focused on is bringing them together for what could be a nation building project.
Ebenezer3
11 months ago
Gas crisis paves accelerated path to production
Meagan Evans
Tue, 13 June 2023 6:06AM
Empire Energy Group has confirmed critical commercial flow rates from its Carpentaria-2H gas well.
Empire Energy Group has confirmed critical commercial flow rates from its Carpentaria-2H gas well. Credit: File
An impending and material cut to the Northern Territory gas supply is exacerbating the looming East Coast gas crisis.
Production at the Blacktip gas field, offshore in northern Australia, has fallen faster than expected, raising fears about energy security both within the NT and further afield.
Gas from Blacktip, which is owned by Italian multinational Eni, is used to generate electricity for Top End users, with any excess piped to East Coast markets. Production peaked in 2019 at about 100 million cubic feet per day and has declined ever since.
It fell by about 50 per cent last year – a trend that has worryingly continued into 2023.
The stark cut in production resulted in a two-month shutdown last year of the northern gas pipeline between the NT and the East Coast gas grid, the only pipeline link.
And the situation does not look like it will be improving at Blacktip any time soon. The NT Power and Water Corporation recently advised Incitec Pivot about potential gas reserves issues at the Blacktip gas field, with a cut to forecast supply under the parties’ gas supply agreement from this month.
The cut in Blacktip production adds to both State and national concerns in relation to energy security, as the only other gas production in the NT comes from Central Petroleum’s Amadeus basin gas fields.
However, this does pave the way for new sources of production, with the NT Government likely to be highly-supportive of any new gas supply projects – amenable to a potential saviour, if you like. The Beetaloo Basin, within the Greater McArthur Basin and said to host some 500 trillion cubic feet of in-place gas resources, appears to be a standout option.
Holding the biggest tenement position across the Beetaloo-McArthur Basins is Empire Energy Group, which is maturing its portfolio of onshore, long-life oil and gas opportunities. Already an early mover in the Beetaloo, Empire’s path to first gas production is now on an accelerated schedule amid the looming East Coast gas shortage.
There have previously been questions around whether there was a big enough domestic market to warrant development of the scale of Empire’s greenfield, unconventional gas project. But with the production drop from the Blacktip field and long-term gas supply issues, success at the project could clearly help bolster future domestic supply.
The production issues at the Blacktip Gas Field that provides energy for electricity generation for the people of the NT, power for NT mining operations and industrial activities as far as Mount Isa and the East Coast, underscore the critical importance of gas for our households and economy. Empire is rapidly progressing towards pilot production from the Beetaloo, aiming to be producing sales gas by early 2025. This will provide the NT with energy it needs, putting downwards pressure on power bills and enabling economic growth.
Empire Energy Group managing director Alex Underwood
Beetaloo’s in-place gas resources are from entirely within the middle Velkerri B layer of the Mesoproterozoic Roper Group – where Empire is targeting. While only a handful of horizontal wells have been drilled to date, Velkerri B is the most prospective of the stacked, organic-rich shales of the Roper Group.
It is where both the Santos-Tamboran and Origin-Falcon joint ventures made big steps with lateral wells across the basin.
Amid accelerating urgency for new gas supply options, Empire substantially increased the contingent resources of its wholly-owned EP187 permit late last month to what it says is now a “nationally significant resource”. An independent review lifted the estimated 2C contingent resource by 270 per cent to a sizable 1739 petajoules.
The material upgrades in contingent resources to LNG scale help make the case to accelerate towards an early gas development option.
Empire further solidified its potential to step in and help fill the supply shortage by recently confirming critical commercial flow rates from its Carpentaria-2H gas well, its first horizontal well into the Beetaloo sub-basin. It pulled up an impressive 323 terajoules, or 281 million standard cubic feet (mmscf), over 127 days. That equated to a normalized rate of 2.75 terajoules (2.4 mmscf) each day per 1000m.
The impressive flow rates have already elicited the attention of multiple parties, who have expressed strong interest in buying Empire’s Beetaloo gas in both the pilot phase and full development phase.
With a recent green light from the NT government to move into production, along with adequate capital resources, Empire is now progressing towards development drilling and – more importantly – cash flow. A final investment decision on an initial gas project is due by the year’s end ahead of the anticipated first gas production in 2025.
Ebenezer3
11 months ago
Empire Energy Group delivers “nationally significant” LNG resource at EP187 in Beetaloo Basin
20:29 Sun 28 May 2023
Ephrem Joseph
Empire Energy Group Ltd
ASX:EEG
OTC:EEGUF
Empire Energy Group Ltd - Empire Energy Group Ltd delivers “nationally significant” LNG-scale resource at EP187
Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) has made a breakthrough with an independent LNG resource at EP187 permit in the highly prospective Beetaloo Basin, representing a “nationally significant” resource of low CO2 gas.
The company said the results were nothing short of impressive, revealing a substantial increase in the contingent resources of EP187, including:
270% increase in 2C contingent resources to 1,739 Petajoules (PJ) representing an average estimated ultimate recovery (EUR) per well of 7.9 PJ;
217% increase in 1C contingent resources to 304 PJ representing an average EUR per well of 6.2 PJ; and
129% increase in 3C contingent resources to 3,507 PJ representing an average EUR per well of 9.3 PJ.
The assessment, carried out by Netherland, Sewell & Associates, Inc. (NSAI), an esteemed petroleum property analysis firm, follows the successful completion of Empire's 2022 Beetaloo work program.
What makes Empire's EP187 even more promising is the high calorific value of its gas, a factor that NSAI has taken into account while assessing the sales volumes.
Shares have been as much as 8.15% higher in the first hour of ASX trading to A$0.20.
Gas shortfall on horizon
Empire managing director Alex Underwood said: "The Empire team is delighted to share these outstanding results with shareholders.
“The volumes delineated in EP187 represent a nationally significant resource of low CO2 gas.
“Warnings abound from multiple sources that Australia faces material gas shortfalls in years ahead, a view that I share given the enduring role of gas.
“The Beetaloo and more particularly Empire’s resource has the potential to service domestic demand gaps and international sales via LNG.
“At an assumed gas contract price of $10/GJ, each development well in EP187 could produce between $62 million and $95 million of revenue over its life, compared to a development cost of ~$20 million in the pilot phase and or ~$15 million in larger development scenarios.
Results summary
The C-2H and C-3H operational results demonstrate that Empire can cost-effectively deliver 3-kilometre hydraulically stimulated horizontal wells utilising Australia’s existing rig and frack spread fleet.
3-kilometre horizontal wells represent Empire’s intended well design for future development of the Carpentaria Project in EP187.
Contingent resources have been estimated using a combination of deterministic and probabilistic methods based on step-out locations from current well control using this well design with a 500m lateral drainage offset.
EP187 contingent resources
Forward plan
Prospective resources are those areas proximal to the contingent resources areas where uncertainty in mapping is still evident due to a lack of well control.
Future additional step-out drilling may allow Empire to convert some of this prospective resources base to contingent resources.
However, Empire’s current focus for EP187 is on commercialising its significant discovered resource base.
Underwood adds: “NSAI has identified over 200 2C drilling locations, representing LNG scale development potential.
"Following the recent green light from the NT Government to move into production, the Empire team is progressing towards development drilling and cash flow.
“Our current capital resources allow us to proceed to a final investment decision on the pilot project this year without raising any further capital in the near term.
“This will allow the team to focus on further value accretive work including field development planning, indigenous consultation, regulatory approvals and gas sales negotiations
Ebenezer3
11 months ago
Empire Energy Group continues strong gas flow at Carpentaria-2H as testing ends
10:53 Wed 24 May 2023
Proactive
Empire Energy Group Ltd
ASX:EEG
OTC:EEGUF
Empire Energy Group Ltd -
Gas flare at the Carpentaria-2H well.
Consistently strong gas flow rates at the Carpentaria-2H (C-2H) well within the Beetaloo Sub-Basin in Australia's Northern Territory (C-2H) has renewed the confidence of Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) in the commercial viability of its EP187 asset.
C-2H has produced a total of 323 terajoules (TJ) or 281 million standard cubic feet (mmscf) over 127 days, with the gas composition remaining consistent with high calorific value and extremely low carbon dioxide (CO2).
This equates to a normalised rate of 2.75 TJ or 2.4 mmscf per day per 1,000 metres for the entire test period.
Following an updated gas composition analysis, the post-soak 2023 IP30 is now confirmed at 3.5 TJ or 3.0 mmscf per day per 1,000 metres.
Growing confidence
"We are pleased to share the continued strong gas flow rates achieved at C-2H as they provide further confidence that an economic development in EP187 may be achievable,” Empire Energy managing director Alex Underwood said.
“The cumulative production of 323 TJ over 127 days from C-2H would equate to over 1,000 TJ cumulative production for an equivalent 3-kilometre horizontal development well over the same period.
“This is despite the unoptimised nature of the C-2H well that has tested multiple completion methodologies.
Wells shut
C-2H has been 'shut in' for now and will be available as a future gas producer.
On the other hand, Carpentaria-3H (C-3H) will reopen for flow testing once its soaking period ends.
Soaking is the practice of shutting in a shale gas well for a period following fracture stimulation to improve its long-term productivity through redistribution and interaction of the residual water with the rock.
Meanwhile, the front-end engineering and design for the Carpentaria Pilot Project’s final investment decision is ongoing.
Map showing depth to base of Velkerri B shale across the Greater Carpentaria project area.
Attractive gas price
“If we assumed a gas price of $10/GJ, which is less than half the spot price at Wallumbilla on May 22, 2023, an equivalent 3-kilometre development well could generate over $10 million in gross revenue before royalties over an equivalent first 127 days of commercial production without any further well optimisation,” Underwood said.
“Such a level of gross revenue so early in the life of development wells may support field level economics.
“Following recent regulatory implementation by the NT Government giving the Beetaloo a ‘green light’ to move into commercial production, and an extremely tight domestic gas market, line of sight towards commercialisation is getting clearer by the day," he added.
Ebenezer3
11 months ago
Australia's gas industry will take the lead to a net zero 2050
We are "not a passive observer, or casualty" on path to decarbonisation: APPEA chair
16 May 2023 2:16 GMT UPDATED 16 May 2023 2:16 GMT
By Amanda Battersby in Adelaide
Australia’s oil and gas industry must not become a casualty in the nation’s and the global race to decarbonisation, said APPEA chair Meg O’Neill.
Northern Territory gas exploitation: ‘Best outcome’ or ‘rotten decision’? You decide
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“This week, we double down on our message that the oil and gas industry is not a passive observer, or worse — a casualty — of the global and Australian race towards a net zero economy, O’Neill said in a keynote address to the APPEA 2023 conference.
“We are part of the solution. We are an essential source of energy for every business… every household… every community… every person.
“And we are committed to working together to achieve the Paris targets,” she said.
The Australian Petroleum Production and Exploration Association (APPEA) sees gas as playing an important role on that road to net zero.
“When used to generate electricity, natural gas emits around half the lifecycle emissions of coal. That’s a pretty strong argument for using more gas in my book,” said O’Neill.
But investments in the new gas supply needed both for the domestic market and for export, require a regulatory framework that provides stability and transparency, she told delegates.
“Australia is uniquely placed to succeed in the energy transition — we have plenty of natural resources, the right workforce and a strategic location,” said O’Neill.
“I am confident the Albanese government wants the same outcome, and our industry will continue to work constructively and proactively on charting Australia’s reliable, affordable lower carbon future.”
Gas is crucial for Australia’s energy security, particularly when solar and wind power are compromised by the weather, and is also critical for energy security in nations such as Japan and South Korea that rely on liquefied natural gas imports from Down Under.
“Nations across the Indo-Pacific still rely on Australian gas to ensure their own energy security today and support their clean energy transformations, with higher penetration of renewables. Japan, South Korea, Singapore and China have been our most important LNG trading partners for years,” said Minister for Resources, Madeleine King.
Australia is one of the world’s largest LNG exporters, accounting for about 21% of global exports, with export revenues forecast to reach A$91 billion (US61 billion) in the current financial year.
Australia is by far the largest LNG supplier to Japan, accounting for almost half of its LNG imports in 2022, worth an estimated A$34 billion.
Australia’s gas supplies to South Korea and China last year were worth an estimated A$18 billion and A$19 billion, respectively.
Japanese and South Korean demand, and their significant capital investment, has underpinned development of Australia’s LNG industry, on both its east and west coasts, added King.
O’Neill noted that gas accounts for 42% of the energy used by Australian manufacturers.
“We know… that the Australian Government wants to turbocharge our manufacturing capabilities. Using more gas could do this.”
O’Neill also highlighted that gas can fuel the plants that manufacture batteries for electric vehicles.
Australia’s Prime Minister Anthony Albanese last week said that gas is an important industry for Australia and for its national interest.
“But we know some in the parliament, and many in the community, do not know the central role natural gas plays in the Australian economy and their everyday lives,” said O’Neill.
“Or the vital role natural gas is playing and will continue to play, in reducing Australia’s emissions.
“This is an area where our industry recognises we need to do more.”
APPEA is embarking on an awareness campaign, highlighting that its focus on the industry’s contribution to Australia’s economy and to emissions reductions, is not a policy pivot, or reset.
“Rather, it reflects our strengthened resolve to be more forward leaning about our sector’s strong future and critical role in the net zero economy… in Australia, in our region and globally.
“Many companies have set their own ambitious targets to achieve net zero and plan to invest billions of dollars in the technologies that will deliver the real emissions reductions needed to get us there,” said O’Neill.
“In short, we will lead, we will shape, and we will innovate towards 2050 and a net zero emissions Australia.”
Ebenezer3
12 months ago
Upstream article 5/11/23...
In operation: the Silver City Drilling Rig 40 at the Carpentaria-2H well on EP 187 in Australia’s Northern Territory.Photo: EMPIRE ENERGY
Empire Energy eyes pilot production in newly-reopened Australian shale play
Final investment decision targeted in 2023 for Carpentaria gas production
11 May 2023 23:05 GMT UPDATED 11 May 2023 23:05 GMT
By Amanda Battersby in Singapore
Australia-listed junior Empire Energy is racing to step up a gear towards production at its Northern Territory assets now the territory’s government has finalised the Beetaloo regulatory framework.
Empire is progressing front-end engineering and design work, field development planning, Indigenous and regulatory approvals, gas sales and pipeline transportation negotiations for its proposed Carpentaria pilot project on EP 187, with the aim of taking the final investment decision later this year.
Northern Territory gas exploitation: ‘Best outcome’ or ‘rotten decision’? You decide
Read more
Independent reservoir engineering forecast production analysis indicates that three-kilometre horizontal wells in the Carpentaria area of EP 187 could ultimately deliver about 6 billion cubic feet of gas per well on a 50% recovery basis and about 8 Bcf on a 10% recovery basis, the operator said.
“This represents a potential upstream development cost of A$2 to A$3 per gigajoule in future development scenarios assuming A$15 million to A$20 million per well capital expenditure,” Empire said.
The company has engaged consultants Netherland, Sewell & Associates to prepare an updated resource assessment for its EP 187 asset, which is due before the end of June.
The regulatory framework put in place by the NT government is now among the most extensive and robust in the world and will allow the safe and sustainable development of the Beetaloo’s abundant natural gas resources, Empire said.
The company added that this gives management the confidence to accelerate its investment decision and planning processes as it moves towards pilot production.
“Building on the encouraging results of our exploration activity over the last four years, we look forward to submitting applications for all required approvals to enable us to move into gas production and the delivery of much-needed new gas supply to the Australian domestic market, and subsequently to increase liquefied natural gas exports, already the NT’s largest source of foreign income and a significant contributor to federal government revenues,” Empire managing director Alex Underwood said.
Last week, the NT government announced the finalisation of all 135 recommendations of the 2018 scientific inquiry into hydraulic fracturing in the territory chaired by Justice Rachel Pepper, effectively establishing a platform for approval of gas production in the Beetaloo sub-basin.
“After an extensive process of review and reform, industry participants and their investors now have certainty on how the NT government will regulate this vital industry,” Underwood added.
Meanwhile, in the western Beetaloo, Empire has secured a groundwater extraction licence to supply water for its planned 2D seismic survey, drilling and hydraulic stimulation activities in the gas discovery area within its wholly owned EP 167 and EP 168.
The company plans to soon resubmit its environment management plan for this work and, once its EMP and Land Access & Compensation Agreements are completed and approved, Empire will be able to acquire up to 376 line kilometres of 2D seismic and construct up to six well pads with horizontal stimulated wells.
Ebenezer3
12 months ago
EMPIRE ENERGY GROUP LTD
Empire Energy Group Ltd (ASX:EEG) NT Government
NT GOVERNMENT FINALISES BEETALOO REGULATORY FRAMEWORK PROVIDING GREEN LIGHT TO MOVE TO PRODUCTION APPROVALS
NT Government Gives Green Light for Beetaloo Production
NT Government Gives Green Light for Beetaloo Production
Sydney, May 4, 2023 AEST (ABN Newswire) - Empire Energy Group Ltd (ASX:EEG) (EEGUF:OTCMKTS) report that the Northern Territory Government has announced the finalisation of all 135 recommendations of the 2018 Scientific Inquiry into Hydraulic Fracturing in the NT chaired by Justice Rachel Pepper, establishing a platform for approval of gas production in the Beetaloo Sub-basin
The regulatory framework the NT Government has put in place is now amongst the most extensive and robust in the world, and will allow the safe and sustainable development of the Beetaloo's abundant natural gas resources.
This announcement gives Empire management the confidence to accelerate our investment decision and planning processes as Empire moves towards pilot production.
Comments from Managing Director Alex Underwood:
"We welcome this historic announcement by NT Chief Minister Fyles and Resources Minister Manison. After an extensive process of review and reform, industry participants and their investors now have certainty on how the NT Government will regulate this vital industry.
Empire is committed to meeting the highest operational and environmental standards and collaborating with government, traditional owners, other landholders and the broader community to ensure the benefits of the development of the Beetaloo's natural resources will be shared across the Northern Territory and in other areas that support that development.
Gas is a critical enabler of the energy transition and an irreplaceable feedstock for many products on which we rely in our modern lives. The Beetaloo's low CO2 gas will play an important role in providing the NT, Australia and the Asian region energy security for decades.
Building on the encouraging results of our exploration activity over the last four years, we look forward to submitting applications for all required approvals to enable us to move into gas production and the delivery of much-needed new gas supply to the Australian domestic market, and subsequently to increase LNG exports, already the NT's largest source of foreign income and a significant contributor to Federal Government revenues."
Finalization of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory Recommendations
On 3 May 2023, the Northern Territory Government announced it had finalized all 135 recommendations of the 2018 Scientific Inquiry into Hydraulic Fracturing in the Northern Territory ("Pepper Inquiry") having released its Final Implementation Report. Finalisation of the recommendations sets the scene for approval of gas production in the Beetaloo Sub-basin including Empire's EP187 Carpentaria Pilot Project.
The Northern Territory Government's recently completed the Strategic Regional Environmental and Baseline Assessment (SREBA), which is the most comprehensive series of regional scientific studies ever conducted in the Northern Territory. The SREBA provides information necessary for appropriate decisions to be made about the development of the Beetaloo, including the assessment of water and biodiversity resources, to inform land-use planning, and the collection of baseline data to provide a reference for ongoing monitoring.
The regulatory framework the NT Government has put in place is now amongst the most extensive and robust in Australia and will allow the safe and sustainable development of the Beetaloo's abundant natural gas resources.
The Final Implementation Report concluded:
"Having considered the system reform undertaken as a complete package, the NT Government is now satisfied that the risks identified by the Inquiry have been sufficiently mitigated and is confident that applications for onshore petroleum production licenses may now be accepted for consideration by the new regulatory regime."
In announcing the Final Implementation Report, Chief Minister of the Northern Territory Hon. Natasha Fyles said:
"Along with our world-class renewable resources, our highly prospective onshore gas resources will support our energy security during the transition to renewables - and will improve living standards for all Territorians."
Deputy Chief Minister of the Northern Territory Hon. Nicole Manison also said:
"It will help fund things like schools, hospitals, services, housing. There will be further economic flow-on benefits ... more jobs, more benefits, more development in remote regions of the NT."
About Empire Energy Group Ltd
Empire Energy (ASX:EEG) (OTCMKTS:EEGUF) holds over 14.5 million acres of highly prospective exploration tenements in the McArthur and Beetaloo Basins, Northern Territory. Work undertaken by the Company since 2010 demonstrates that the Eastern depositional Trough of the McArthur Basin, of which the Company holds 80% has very considerable conventional and unconventional hydrocarbon potential. The Beetaloo sub-Basin, in which Empire holds a substantial position, has independently assessed world class hydrocarbon volumes in place with a major ramp up in industry activity underway to appraise substantial discoveries already made by major Australian oil and gas operators.
Empire Energy is an experienced conventional oil and gas producer with operations in the Appalachia region (New York and Pennsylvania). Empire has been successfully developing and producing oil and gas since 2006.
Contact
Empire Energy Group Ltd
E: info@empiregp.net
T: +61-2-9251-1846
F: +61-2-9251-0244
WWW: www.empireenergygroup.net
Link: NT Government Gives Green Light for Beetaloo Production
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Ebenezer3
12 months ago
ABC News
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NT government announces fracking in the Beetaloo Basin can go ahead
By Roxanne Fitzgerald and Sarah Spina-Matthews
Posted 11h ago11 hours ago, updated 3h ago3 hours ago
WATCH
Duration: 1 minute 50 seconds1m 50s
The Northern Territory Government has announced fracking in the Beetaloo Basin will be able to go ahead.
The Northern Territory government will allow a full-scale onshore gas industry to go ahead in the gas-rich Beetaloo Basin, five years after a moratorium on fracking was lifted.
Key points:
The NT Government will allow fracking to go ahead in the Beetaloo Basin
They say they have implemented all 135 recommendations of the Pepper inquiry
Scientists claim they have not met a recommendation to offset gas emissions from the project
The government has been racing to tick off 135 recommendations from the 2018 Pepper inquiry, which found industry risks could be managed if its recommendations were implemented in full.
The government announced today that has been done, and oil and gas companies will be able to make an application for onshore gas production projects, which will be regulated by one of the most robust frameworks in Australia.
It also said it has a new petroleum operations unit to deliver a strong compliance program, which will be funded by a $2 million annual investment.
It comes after the NT government released the findings of a critical, three-year study into fracking in the Beetaloo sub-basin on April 19.
The Strategic Regional Environmental and Baseline Assessment (SREBA), which was a key recommendation from the Pepper inquiry, found no new risks associated with the development of an onshore gas industry.
Nicole Manison and Natasha Fyles stand side-by-side in front of a number of media microphones
Deputy Chief Minister Nicole Manison and Chief Minister Natasha Fyles made the announcement on Wednesday. (ABC News: Hamish Harty)
However, almost 100 scientists published an open letter in national newspapers across Australia on Wednesday, urging the NT government not to allow fracking to go ahead and warning of "the damage it will inflict on our climate".
The scientists claimed one key recommendation of the Pepper inquiry, known as 9.8, had not been addressed.
"[The government] committed to implement all the recommendations of the Scientific Inquiry into Hydraulic Fracturing," the letter stated.
"Including that the NT and Australian governments seek to ensure that there is no net increase in the life cycle greenhouse gas emissions emitted in Australia from any onshore shale gas produced in the NT.
"The Northern Territory government has failed to keep its commitment."
NT denies Beetaloo gas plans in doubt without offsets help
No federal support for Territory Labor's promise to ensure all Beetaloo Basin emissions are offset is on the table, as cabinet prepares to announce whether full-scale fracking will be allowed to go ahead.
NT Health Minister Natasha Fyles stands looking concerned in front of some large flags.
Read more
Chief Minister Natasha Fyles said the government had released the final implementation report from the Pepper inquiry, saying it "absolutely met the recommendation".
The government scrapped a previous policy that only required companies to manage their emissions if they exceed 100,000 tonnes, but will now mandate all operators to submit a Greenhouse Gas Abatement plan outlining their pathway to net zero by 2050, regardless of size.
The government admitted it won't be able to deal with emissions created by the actual burning of gas for energy — commonly referred to as "scope three" emissions — generated outside of the NT, which account for a large portion of the total emissions from a project.
Instead, they are counting on the federal government's safeguard mechanism to capture and regulate these emissions.
An aerial view of an exploration well in the Northern Territory's Beetaloo Basin on a patch of cleared land surrounded by bush
The Beetaloo Basin is an enormous shale gas reserve about 500 kilimetres sout-east of Darwin. (Supplied: Empire Energy)
Dr David Ritchie — the bureaucrat tasked with overseeing the government's implementation of the Pepper inquiry's recommendations — disagreed that the recommendation around abating emissions had been completed.
Scientists call for Beetaloo fracking ban
The NT government is poised to make a final decision on whether it will green-light fracking in the Beetaloo Basin, but nearly 100 scientists have called for a fracking ban in the region, saying the costs to the community could be "enormous".
a gas flare in front of an exploration well.
Read more
"There has been no progress on the crux of this recommendation," he said.
Ms Fyles said both the Commonwealth and NT government were "putting in place the measures to transition the Northern Territory and Australia to net zero emissions".
"[But] we cannot simply flick a switch and transition overnight," she said.
She did not directly answer a question about whether or not the federal government had committed to help offset emissions from the project.
"The Commonwealth is focused on this," she said.
"We will continue to work with them."
Deputy Chief Minister Nicole Manison said the project would provide economic benefits to the NT through royalties.
"It will help fund things like schools, hospitals, services, housing," she said.
"There will be further economic flow-on benefits … more jobs, more benefits, more development in remote regions of the NT."
Traditional owners concerned, peak bodies welcome announcement
Ms Fyles said traditional custodians would be able to veto any projects on their country.
But Beetaloo Basin traditional owner and Nurrdalinji Native Title Aboriginal Corporation chair Johnny Wilson said that was an incorrect claim.
"There is no veto right at production stage under native title or land rights laws," he said.
"When our old people said yes, many years ago, they had no idea of the many thousands of wells we are looking at now."
Nurrdalinji Aboriginal Corporation
Johnny Wilson is concerned traditional owners will not have genuine power to veto projects on their country. (Supplied: Nurrdalinji Aboriginal Corporation)
The Pepper Inquiry found that Native Title holders "do not have a statutory right to veto an exploration permit by the government" but have the right to make an agreement with a gas company.
And under the land rights act traditional owners can say yes to development in some areas and no to development in others, but only in the exploration phase.
Outside parliament after the announcement, Anna Weekes from the Australian Parents for Climate Action said she was gravely concerned for her children's future in the wake of what she described as an industry going ahead with "no plan to manage emissions".
"We have no option but to defend a liveable climate for them," she said.
The NT Chamber of Commerce chief executive Greg Ireland said the green light for fracking was a win for the NT because it would create jobs.
"The territory has long suffered from the fact that it's been reliant on federal government support, but having our own revenue streams is critically important for our future," he said.
"It will build a technical skills base, it will build opportunities for our kids and encourage more and more people to want to live in the territory."
Four people stand on a concrete outdoor floor. They are holding red and white signs with ant-fracking slogans on them
Some people protested the decision outside Parliament House. (ABC News: Hamish Harty)
The Australian Petroleum Production and Exploration Association (APPEA), the overarching body for the oil and gas industry, has also welcomed the announcement.
With oil and gas companies still in their testing and appraisal phase in the Beetaloo Basin, it is expected that production applications will start flowing in for government approval next year.
Related Stories
'The end of the line': Scientists send open letter urging NT government to abandon fracking plans
a gas flare in front of an exploration well.
NT government finalises key Beetaloo Basin study ahead of final fracking decision
An aerial shot of a drilling site in the Beetaloo Basin. Machinery and vehicles are in a land clearing surrounded by trees,
NT government denies Beetaloo Basin gas plans in doubt without federal support for offsets promise
NT Health Minister Natasha Fyles stands looking concerned in front of some large flags.
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Ebenezer3
12 months ago
Empire pumps up production at NT gas play
Helen Barling
SPONSORED
Fri, 28 April 2023 5:04PM
Empire Energy completed the Carpentaria-4V gas well into the Beetaloo sub-basin in the Northern Territory.
Empire Energy completed the Carpentaria-4V gas well into the Beetaloo sub-basin in the Northern Territory. Credit: File.
Australian oil and gas company Empire Energy Group has turned the tap back on at its Carpentaria-2H (C-2H) gas well in the Northern Territory’s world-renowned Beetaloo sub-basin.
The company says its new rate in the March quarter of 2.81 million standard cubic feet (mmscf) per day at its first horizontal well, represents a normalised flow rate of more than 3mmscf a day per 1000m of horizontal section and a 17 per cent improvement on initial tests.
Fracking (short for hydraulic fracturing) is a technique for recovering gas from a prospective shale rock. Companies can maximise gas production rates by optimising the placement of a well’s fractures along the target zone by piercing the reservoir with a chemical mixture known as “fracking fluid”.
A 927m-long horizontal section of C-2H, Empire’s first horizontal well into the Beetaloo sub-basin, was fracture-stimulated over 21 stages using a host of hydraulic fluids including crosslink, slickwater and a hybrid blend of both formulations, along with a high-viscosity friction reducer.
Empire says using multiple fluids in a single wellbore is not common practice in the industry. Management says it is on a steep learning curve at Beetaloo and is developing basin-specific fracture stimulation methods to optimise gas flow.
The company, which boasts the biggest holding in the giant Beetaloo Basin gas province in Australia’s Top End, believes the results validate its soaking strategy - where a well is “shut-in” to allow gas pressure to build-up.
During production testing at C-2H, the company shut-in its Carpentaria-3H (C-3H) gas well to monitor pressure build-up and to evaluate the impact of soaking.
The company’s second gas well, C-3H, is the longest horizontal well section drilled in any onshore basin in Australian history, running in at 2632m. The well has been fracture-stimulated across 40 stages along a 1989m horizontal section.
A third hole, Carpentaria-4V (C-4V) was completed in January this year, after targeting the neighbouring fault block that houses the historical Carpentaria-1 well, in addition to C-2H and C-3H.
Interestingly, C-4V has proven the continuity of the prospective Carpentaria shale play into the adjoining Carpentaria East fault block and suggests the thickness of the stacked shale sequence is consistent over the EP187 tenure.
Independent analysis says the company’s development wells could generate 6.2 billion standard cubic feet (BCF) of gas per well on a conservative P50 basis and 8.1 BCF gas on a P10 basis.
The P50 basis signals at least a 50 per cent probability that the quantities recovered will equal or exceed the best estimate, while P10 means there should be a minimum 10 per cent chance that the amount recovered will equal or exceed the estimate.
After crunching the numbers, Empire believes its development wells at 2-H and 3-H in the pilot phase can be drilled and fracture-stimulated to be ready for production for between $15 million to $20 million per well. The numbers show an indicative cost of about $2-$3 per gigajoule in any future development scenario.
The company is neck-deep in the front-end engineering and design and regulatory approvals process for the Carpentaria pilot project, which will underpin a final investment decision slated for later this year.
Empire filled its coffers to the tune of $15.1 million in the March quarter after getting its hands on a further $5.6 million, courtesy of the Federal Government’s Beetaloo Cooperative Drilling Program. An additional $15 million credit facility with the Macquarie Bank remains firmly intact.
With global markets recently enjoying a rollercoaster ride, management says it is focused on minimising capital expenditure while the pilot project planning progresses.
At the nearby Western Betaloo project, Empire has recommenced work on the environmental management plan needed for it to get approval to undertake further ground-based activities.
Pending the approvals process and tidying up the last of the land access agreements, plans are afoot to gather 376 line kilometres of 2D seismic and construct up to six well pads with six horizontal stimulated wells.
Earlier this week, the Australian government released its final consultation paper for the mandatory code of conduct (Gas Code), which seeks to secure more gas at reasonable prices for Australian consumers feeling the heat for turning up the heat.
Under the code, small gas producers will be exempt from the price cap, currently set at $12 per gigajoule, if they supply only the domestic market – a win for small gas producers like Empire.
Ebenezer3
1 year ago
Words of wisdom: Woodside Energy chief executive Meg O'Neill. Photo: APPEA
Woodside chief blasts extremists that threaten investment in Australia’s gas industry
Meg O’Neill also urges investment and regulatory certainty amid twin goals of energy security and decarbonisation
23 April 2023 7:14 GMT UPDATED 23 April 2023 7:14 GMT
By Amanda Battersby in Singapore
Woodside Energy chief executive Meg O’Neill has slammed extremists who are doing the damnedest to scupper under development and new gas projects in Australia, the region’s largest liquefied natural gas exporter.
Addressing the National Press Club in Canberra, O’Neill said that development of Australia’s gas industry has only been possible with the support of international investors and customers looking to secure their own energy supplies. But now they are questioning whether Australia still wants their investment.
“A vocal minority wants to shut down the industry and the jobs and livelihoods that go with it. They have deep pockets and are using both protest action and the courts to create uncertainty and destabilise regulatory processes to frustrate existing and new projects,” she said.
“We respect every Australian’s right to express their opinion – and we share the commitment to decarbonisation - but extremism is not the answer. We need confidence in stable regulatory outcomes, or we risk choking our energy industry, impacting both domestic and international supply,” added O’Neill.
“This concerns our regional partners, who depend on current Australian gas projects to help them meet their decarbonisation commitments and to keep the lights on in Asian megacities.”
O’Neill said that the challenge, as she sees it, is for Australia to use its vast natural gas resources for three interrelated goals: To provide affordable and reliable energy for Australians, to maintain strategic partnerships and regional energy security, and to progress global decarbonisation.
“We want to develop new projects in Australia, across both hydrocarbons and new energy opportunities, but that will only be possible if policy settings provide the certainty to underpin long-term investment.”
Securing future investment
During 2022, the world experienced what the International Energy Agency has termed “the first truly global energy crisis” and Australia, for all its vast natural resources, was not immune.
“Those who can least afford it have felt it most acutely, sometimes having to choose between food and heating through winter. This should not be happening in Australia. Australians should be able to expect reliable energy. That needs to come from having the right investment climate - rather than arbitrary market intervention - and the right honest conversations between all participants in the energy system,” said O’Neill.
But, she said, a longer-term view is needed to ensure new supply will be there to meet anticipated demand.
“Woodside and other companies are actively considering what we might be able to do to help - from infrastructure to enable LNG imports, to buildout of gas storage - but we also know these can only be progressed in concert with government.
“[This] requires a clear investment framework and regulatory certainty to attract the capital from international markets that is needed for large-scale projects.”
Woodside's 2022 A$2 billion-plus tax bill
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The same partners who invested in Australia’s gas projects can provide the capital to develop lower-carbon hydrogen and renewable projects, but only if they consider it a secure investment, added O’Neill.
“For Australia to remain an attractive destination for global capital, fiscal and regulatory certainty is paramount.
“We urge the government, in any changes to the tax framework, to consider the long-term and preserve Australia’s ability to attract the next generation of investment, jobs and energy supply,” said O’Neill.
“In terms of regulatory certainty, agreement on clear processes and response times for project approvals is essential to unlocking reliable supply. Otherwise, energy investment will find another home, taking jobs and opportunities with it.”
Gas in tandem with renewables
Globally, we are going to need to use all the tools to address climate change while advancing developing economies, Woodside’s chief executive said.
“That’s going to require rapid scale-up of renewables and investment in ongoing gas supply as existing gas fields deplete.”
Even in its Net Zero Emissions scenario, the Paris-headquartered IEA has estimated an average of US$365 billion of upstream oil and gas investment is needed every year to 2030, and US$171 billion every year thereafter to 2050.
“When used to generate electricity, natural gas emits around half the life cycle emissions of coal. Gas is a flexible source of energy and provides a stable baseload,” she added.
Australia’s federal government is targeting increasing the share of renewables in the electricity grid to 82% by 2030, leaving an 18% gap that could be filled by natural gas. However, today gas-fired power only accounts for 7% of the national energy market.
O’Neill admitted that Australia’s gas industry needs to do more to reduce emissions but that it is moving in the right direction.
“We employ engineers – creative, practical problem-solvers, who are prioritising this challenge – and commercial analysts, who are figuring out ways to finance it,” she said.
“We have geologists, who used to explore for new oil and gas reservoirs, who are now looking at how we can safely inject and store carbon dioxide in depleted reservoirs.”
However, in the absence of certainty at a national level, Australian states have implemented complex and conflicting regulations for emissions reduction, moving away from the concept of tackling the lowest-cost abatement options first, and adding to the cost of doing business… not just for energy producers, but for all industrial segments, O’Neill commented.
Getting it right in future
“You might guess from my name that I’m of Irish heritage. I grew up in Boulder, Colorado, (in the US) but my Nanna grew up in a village in County Mayo, in Western Ireland, with no electricity - relying on a peat fire for heating, cooking and light,” O’Neill shared.
“As a society, we have come a long way since then, in just two generations. And we should not be regressing. We should instead be extending access to electricity to hundreds of millions of people in the developing world who still live without it. To do that, we need new supplies of affordable and reliable energy.”
However, against that backdrop, there is the need to decarbonise which will require the rapid scale-up of renewables alongside investment in ongoing gas supply as existing gas fields deplete.
Woodside is aiming to spend US$5 billion by 2030 to progress new energy opportunities and lower-carbon services.
Admitting the Australian company – which was founded in 1954 – historically has not always “got it right” in its relations with First Nations peoples, O’Neill said the company is on a journey in its relations with First Nations peoples and “working to get it right” by listening to and learning from these peoples.
“For Woodside, a big part of this is working with the Traditional Owners of Murujuga, in northern Western Australia, where our largest Australian operations are based,” she said
Ebenezer3
1 year ago
Empire Energy says it has boosted production ambitions by lifting its average 30-day gas flow rate by more than 17 per cent in initial tests held at the Northern Territory’s Beetaloo Basin.
The company says its new rate of 2.81 million standard cubic feet (mmscf) per day at its first horizontal well, Carpentaria-2H, represents a normalised flow rate of more than 3mmscf a day per 1000m of horizontal section.
Empire, which boasts the biggest holding in the giant Beetaloo Basin gas province in Australia’s Top End, believes the results validate its soaking strategy. It is now incorporating that strategy into its future development plans.
Independent analysis says the company’s development wells could generate 6.2 billion standard cubic feet (BCF) of gas per well on a conservative P50 basis and 8.1 BCF gas on a P10 basis.
The P50 basis signals at least a 50 per cent probability that the quantities recovered will equal or exceed the best estimate, while P10 means there should be a minimum 10 per cent chance that the amount recovered will equal or exceed the estimate.
The company has now crunched the numbers and believes its development wells at 2-H and 3-H in the pilot phase can be drilled and fracture-stimulated to be ready for production for $20 million per well. The figure could drop to $15 million per well for bigger developments once economies of scale kick in. The numbers show an indicative cost of about $2-$3 per mmscf in any future development scenarios.
Fracture stimulation is where the wellbore is filled with high-pressure fluids to create fractures in the rocks. The fluid composition is mostly made up of 99 per cent water combined with a matrix of the kind of chemical additives found around the house and a small amount of sand and clay. The sand and clay find their way into the rock fractures, propping them open and allowing the gas and oil to seep out over time.
With the flow testing now continuing in the background, management’s main focus is the work required for a final investment decision (FID) on a pilot project planned for later this year.
Interestingly, the company believes the recent political wrangling about the future of the Beetaloo Basin and how it fits into the Federal Government’s so-called “safeguard mechanism” in implementing a cut in emissions, has helped provide “clarity” for its project.
Empire Energy managing director Alex Underwood yesterday told the ABC: "As the NT government finalises the implementation of Pepper inquiry, settling the regulatory framework for the Beetaloo is essential to building investor confidence."
Leading into its FID, Empire has a healthy cash balance of $15.7 million and despite an upcoming bill of $3.5 million for last year’s drilling and stimulation, it is also expecting a final payment of about $7.6 million as part of the Beetaloo Cooperative Drilling Program. The company’s $15 million credit facility also remains untouched.
Ultimately, the financial numbers have added to management’s confidence in the cash-making potential of the project.
Empire Energy managing director Alex Underwood said: “The upgraded IP30 rate that Empire has achieved at C-2H, the company’s first horizontal appraisal well within an experimental and therefore unoptimized stimulation design, demonstrates that EP187 has the potential for commercial outcomes in development scenarios.”
China's liquefied natural gas demand is forecast to recover this year as the country emerges from COVID-19 controls. According to analysts Rystad Energy, Wood Mackenzie and ICIS, the Middle Kingdom is expected to rebound to between 70 million and 72 million tonnes this year, jumping up to between 9 per cent and 14 per cent higher than in 2022.
As Empire ticks more boxes on the practical and political side of its project on the road to production, news of even greater demand for gas should only increase the confidence of its bullish board.
Ebenezer3
1 year ago
Latest flow rates and operations: ABN Newswire) Empire Energy Group Ltd (ASX:EEG) (OTCMKTS:EEGUF) report that the Carpentaria-3H ('C-3H') has been flow tested for 27 days and is currently shut in for soaking (the practice of shutting in a well for a period following fracture stimulation to maximise long-term productivity). Gas production rate has ranged between 2.3 million standard cubic feet per day ('mmcf / day') and 5.7 mmcf / day with an average of 2.6 mmcf / day. Flow rates are yet to be optimized by the shut-in and soaking. Empire believes that higher flow rates will be achieved when the well is reopened.
Carpentaria-2H ('C-2H') has been brought back online to test the benefit of soaking with excellent results. A sustained average gas flow rate of 3.24 mmcf / day over eight days ('IP8') has been achieved over the 927-metre stimulated horizontal section, approximately 21% higher than the initial IP8 with a lower rate of decline.
This is a normalised flow rate of 3.5 mmcf / day per 1,000 metres at C-2H, demonstrating that soaking has had a material beneficial impact on flow rates, consistent with productivity improvements seen in other wells in the Beetaloo Sub-basin and in US shale gas basins.
Empire intends to continue flow testing C-2H to develop an early production type curve that will be incorporated into Empire's ongoing Front-End Engineering and Design ('FEED') process. Management is working towards pilot project Final Investment Decision ('FID') this year (subject to financing, gas sales agreement, regulatory approvals and Board approval).
Petrophysical interpretation of Carpentaria-4V ('C-4V') data has confirmed that net pay in the Middle Velkerri B is 20% greater and ~150 metres deeper than at the C-2H / C-3H location. C-4V formation evaluation results are being incorporated into the updated independent resource assessment that is expected to be complete in the coming weeks.
Current cash balance is $18.2 million with recent drilling and stimulation projects coming in well under budget. The $15 million credit facility is available but undrawn. Final Beetaloo Cooperative Drilling Program progress payment of ~$7.6m is expected to be received soon.
An investor webinar including Q&A will be conducted today at 11am AEDT during which Managing Director Alex Underwood will provide an overview of these results and investors can ask questions. Dial in details can be found below.
Comments from Managing Director Alex Underwood:
'The Empire team is highly encouraged by the stabilised flow rates we have achieved at C-2H. At this stage, the rates appear to exceed thresholds that others in the Beetaloo have proposed as being commercial. Empire has high earnings leverage due to the reduced capital costs we enjoy at shallower depths than other parts of the Beetaloo and high net revenue interest (working interest adjusted for royalties) in our Beetaloo properties.
This result has significantly de-risked EP187 and propels us towards a final investment decision on our pilot project later this year. We are rapidly optimising how to drill, stimulate and complete the Middle Velkerri B shale, and expect further improvements as we drill future pilot wells that, along with C-2H and C-3H, will generate production revenue (subject to FEED, sales and transportation agreements, financing, regulatory approvals and FID).
Netherland, Sewell & Associates are due to upgrade our EP187 Contingent Resources including our recent C-4V results. We anticipate a material increase.
C-3H has remaining fluid that the Empire team wants to remove to see the full C-3H well result. We expect soaking to reduce water saturation and to increase gas pressure that will help to remove the remaining fluid, in addition to providing the other matrix gas benefits seen in C-2H.
The global gas market remains in serious structural deficit. New sources of responsibly sourced, low CO2 gas are urgently required to avoid more seasonal price spikes. The IEA recently forecast that LNG demand from the world's largest importer, China, is expected to increase by up to 35% this year as its economy reopens, but new sources of supply are not coming onstream quickly enough. The NT gas market is undersupplied due to production issues at legacy fields, so our short-term opportunity is to support the NT Government to ameliorate forecast gas shortfalls by bringing our pilot project online quickly.
These flow testing results reinforce our commercialisation strategy.'
CARPENTARIA-2H UPDATE
C-2H was reopened on Friday 24th February after ~5 months of shut in to soak. Soaking is the practice of shutting in a shale gas well for a period following fracture stimulation to seek to improve long-term productivity through redistribution and / or interaction of the residual water with the rock. Productivity improvements have been achieved at other Beetaloo wells and in analogous US shale basins following the execution of such a strategy.
After reopening C-2H, production quickly built to over 3 mmcf / day and is now flowing at 3.25 mmcf / day. This represents a 33% increase compared to the corresponding flow rate after the first 8 days of pre-shut-in initial flow, a material improvement.
The well has been reopened with a restricted choke, with a current wellhead pressure of over 336 psi, which is double the wellhead pressure after the previous corresponding IP8 period.
While lowering this flowing wellhead pressure would produce higher short term gas flow rates, Empire is maintaining a high back pressure and carefully managing the flowback to ensure full fracture connectivity is maintained. The gas is being produced up the 4 1/2' casing without any artificial lift. No well intervention or optimisation was undertaken prior to restart, as the gas rate is sufficient to lift wellbore fluids in 4 1/2' casing.
Third party flowback analysis carried out by Subsurface Dynamics Inc, an independent advanced reservoir engineering and geoscience firm based in North America, indicates that the material improvement in C-2H flow rate has resulted from reduced fractured area water saturation following water imbibition into the surrounding reservoir, removing water blockages to gas flow.
This confirms that Empire's soaking strategy has been effective and is improving gas flow rates which is likely to improve total gas recovery over the life of the well. It also confirms that the increased C-2H flow rate can be used to infer greater well productivity in development well planning.
C-2H well testing is continuing to confirm the longer-term benefits of soaking and to develop an upgraded IP30 type curve.
CARPENTARIA-3H UPDATE
C-3H has flowed at rates of up to 5.7 mmcf / day with an average production rate over the first 27 days of over 2.6 mmcf / day. The initial flow period showed an even shallower level of rate decline than seen on the initial C-2H flowback, indicating that the well is still cleaning up.
C-3H flowed up 4 1/2' casing without the need for production tubing or artificial lift.
C-3H is now shut-in to test whether soaking, now demonstrated as highly effective at C-2H on the same well pad, will improve productivity.
The soaking of C-3H is expected to provide the fractured area matrix improvements seen in C-2H and in addition remove water by imbibition which will reduce the flowing bottom hole pressure and likely improve gas flow rates.
Higher water production during the initial flowback (due to pumping twice as much water to place twice as many fracture stimulation stages) created an estimated 20% higher bottom hole flowing pressure at the heel of the well compared to C-2H due to the density of the fluid lifted, which has impacted gas flow rates. In addition, the long undulating horizontal section in C-3H resulted in fluid and pressure surges during production ('slugging'). This slugging is likely to have created additional back pressure along the wellbore which has also contributed to gas production limitations.
While Empire expects the shut-in period and soaking to remove remaining fluids, there are alternative intervention options that are available if required. Any such intervention would be funded from cash at bank.
Early chemical tracer data from the international testing laboratories shows that the whole wellbore is contributing to gas flow.
Flowback analysis has been performed by Subsurface Dynamics Inc on the initial flow data that demonstrates that the connected fracture area is twice the size of C-2H stimulated area and that the majority of the fracture stages appear to be contributing along the wellbore based on the total stimulated reservoir (rock) volume.
C-3H was drilled and stimulated through a range of rock qualities within the Middle Velkerri B Shale and tracer data confirms that the higher graded rocks have produced at higher rates providing further definition over the future target reservoir window to optimise production.
C-3H trialed several fluid systems and ongoing tracer analysis is expected to provide further evidence on fluid selection and optimization.
C-3H was drilled and completed for $5.9 million below the risked budget.
CARPENTARIA-4V UPDATE
Early petrophysical interpretation indicates the net pay at the recently drilled C-4V well within the Carpentaria East Area is materially greater than the earlier drilled C-1V, C-2H and C-3H wells.
The greater depth of formation at C-4V is expected to improve gas in place and reservoir pressure. Porosity, gas saturation, and gross thickness are interpreted to be highly uniform between the drilled locations.
Further work will be carried out to determine whether the increased pay within the Carpentaria East area is due to lateral depositional changes or through post-deposition processes. This will help resolve lateral reservoir improvements throughout the permit. Sidewall cores taken from the Middle Velkerri A, Intra A/B, B and C shales during drilling have arrived in the USA and will be used for further calibration analysis.
BEETALOO COOPERATIVE DRILLING PROGRAM
Empire's wholly owned subsidiary, Imperial Oil & Gas Pty Limited, has three replacement grant agreements with the Australian Government under the Beetaloo Cooperative Drilling Program (the 'Program'). Total grant funding of up to $19.4 million is being provided which offsets 25% of the cost of seismic acquisition and the drilling, hydraulic stimulation and flow testing of three horizontal wells (C-2H, C-3H and C-4V) in EP187.
Empire has submitted its final progress reports under the Program and expects to receive final grant funding under the Program of ~$7.6 million (ex-GST) in the coming weeks.
CONFERENCE CALL AND WEBCAST AT 11AM (AEDT) TODAY
Managing Director Alex Underwood will present via conference call and webcast commencing at 11am AEDT today. Details are as follows:
For Participants
Pre-Registration Link:
Conference Call:
The conference call can be accessed by the telephone numbers below and quotation of the specified Conference ID number.
Conference ID number: 60701
Australia: +61 (2) 9133 7104 (can be used if dialing from international location)
For Listen Only
*To view tables and figures, please visit:
(asx:eeg ) (OTCMKTS:EEGUF) holds over 14.5 million acres of highly prospective exploration tenements in the McArthur and Beetaloo Basins, Northern Territory. Work undertaken by the Company since 2010 demonstrates that the Eastern depositional Trough of the McArthur Basin, of which the Company holds 80% has very considerable conventional and unconventional hydrocarbon potential. The Beetaloo sub-Basin, in which Empire holds a substantial position, has independently assessed world class hydrocarbon volumes in place with a major ramp up in industry activity underway to appraise substantial discoveries already made by major Australian oil and gas operators.
Empire Energy is an experienced conventional oil and gas producer with operations in the Appalachia region (New York and Pennsylvania). Empire has been successfully developing and producing oil and gas since 2006.
Empire Energy Group Ltd E: T: +61-2-9251-1846 F: +61-2-9251-0244 WWW:
MENAFN05032023000111011020ID1105709152
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Ebenezer3
1 year ago
Empire powers ahead with NT gas play
Matt Birney
SPONSORED
Tue, 31 January 2023 3:30PM
Matt Birney
Activity at the Carpentaria-3H gas well in the Northern Territory.
Activity at the Carpentaria-3H gas well in the Northern Territory. Credit: File
Sydney-based Australian oil and gas company Empire Energy Group has closed the book on a busy December quarter it has hailed as the most active in the firm’s history. The workstream was headlined by its drilling completion of the Carpentaria-3H gas well in the Northern Territory’s world-renowned Beetaloo sub-basin and included a record breaking 2632m horizontal section that was realised on time and significantly under budget.
Importantly, Empire says over 90 per cent of Carpentaria-3H’s horizontal interval penetrated the hydrocarbon-rich Velkerri-B shale formation where strong gas shows were observed. The record-shattering horizontal section notched in Carpentaria-3H’s drilling outshines the length of the company’s previous efforts with its Carpentaria-2H well by 150m.
The company believes the program could also be the most extensive in the history of the Beetaloo basin and the operation’s total outlay of $17.3 million is roughly $3.6 million below its initial projections. Empire has since advanced the well to a program of hydraulic stimulation, or “fracking” and has achieved notable results across each of the bore’s 40 planned stages.
Notably, Empire says 35 of the 40 stages activated in its fracking of Carpentaria-3H were executed within the zone’s Velkerri-B shale target – an area the Northern Territory government believes could house as much as 500 trillion cubic feet of gas.
Fracking is often executed on horizontal, gas-bearing shale wells such as Carpentaria-3H and enables companies to optimise the placement of a well’s fractures in order to maximise gas production rates. The fractures are typically positioned along a bore’s target zone and are essentially a site at which an explorer will look to pierce the ground’s geology and release the zone’s gas resources. The number of stages is contingent on an asset’s depth, with deeper bores – such as the over 2600m Carpentaria-3H – generally accommodating more intervals.
To maximise the volume of hydrocarbons extracted in a gas well companies generally frack a bore by piercing the reservoir with a chemical mixture known as fracking fluid. The formulation is pumped downhole at high pressures and can be derived from a suite of ingredients. According to Empire, it used a host of hydraulic fluids in the fracking of Carpentaria-3H’s 40 stages including, crosslink, slickwater and a hybrid blend of both formulations.
The company previously used slickwater to great effect in its nearby Carpentaria-2H gas well and says the material can deliver economical gas recovery rates along with its reduced inclusions of chemical additives. The company has since initiated flowback activities at the well and says 17 per cent of its fracking fluids have been recuperated. The work is key in moving Empire closer to production.
The Empire team has hit the ground running in early 2023. Our key focus is on moving into pilot production. This involves multiple work streams including Front End Engineering and Design, pipeline transportation and gas sales negotiations, indigenous consents and regulatory approvals. We look forward to updating shareholders further as this critical work proceeds.
Empire Energy Managing Director, Alex Underwood
The company also targeted and intersected the Velkerri Formation shales with its Carpentaria-4V well over the December period. In August last year the company declared its assets in the Beetaloo held a 2C contingent resource of 554 billion cubic feet of gas and 3.5 million barrels of liquid and after the quarter’s activities management says it expects material growth.
Empire also filled its coffers to the tune of $7.8 million over the period after getting its hands on a research and development tax offset and claimed another $1.4 million in cash courtesy of the Federal Government’s Beetaloo Cooperative Drilling Program.
Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au
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