EMPIRE ENERGY GROUP LIMITED Level 7, 151 Macquarie Street Sydney NSW 2000
T: 02 9251 1846
F: 02 9251 0244 (ASX: EEG)ASX Announcement Drilling Update Kansas, Nth Dakota
26 September 2011DEVELOPMENT WELL DRILLING PROGRAM UPDATE DEVELOPMENT WELLS 1 TO 10
Empire Energy Group Limited (Empire) is pleased to announce the following update on its 2011 drilling program in the Central Kansas Uplift region:
well of a 10 well program, the Driscoll #31-8, was spudded on Thursday 22, September 2011. Drilling is expected to take around a week. Empire Energy is operator and holds a 37.5% Working Interest in the well.CENTRAL KANSAS UPLIFT
Historically, Kansas has been a very prolific oil and gas producing state with cumulative production exceeding 6.1 billion barrels of oil (BBO) and 37.5 trillion cubic feet of gas. Current yearly production is approximately 33 million barrels of oil and 342 billion cubic feet of gas from over 60,000 wells. The most prolific oil reservoirs are the Arbuckle (Ordovician) and Lansing-Kansas City (Pennsylvanian) formations particularly from fields located on the Central Kansas Uplift (CKU). Arbuckle reservoirs have produced over 2 BBO statewide. Of the 31 counties in which the Arbuckle has been productive, over 70% of the production has come from 10 counties situated on the Central Kansas Uplift in which Empire Energy operates.
Empire Energys initial focus in the Central Kansas Uplift will be to drill low risk development wells. At the same time the objective is to delineate additional prospects and to convert probable reserves to reserve
1P category.JOINT VENTURE (EMPIRE WI =35%) - EXPLORATION WELL DRILLING PROGRAM EXPLORATION WELL 1 NESHEM #26-1
Drilling the Neshem #26-1 well reached TD on September 24, 2011. A decision on whether the well will be completed will be known early next week.WILLISTON BASIN NORTH DAKOTA
The Canyon Shoreline Project is located on the northeast flank of the U.S. portion of the Williston Basin just east of the Nesson Anticline. The project targets the Sherwood Member of the Mission Canyon as the primary objective, and the Bluell Member as a secondary objective. Both of these members produce from
stratigraphic traps associated with porosity and permeability development closely tied to the depositional facies and early diagenetic fabric found along the carbonate shorelines associated with the progradational parasequence sets of the Mission Canyon.
The initial prospect in the Shoreline Project, the Berthold Prospect, targets the "island crest" or "pisolite" facies. Through extensive subsurface mapping combined with core examination from many of the surrounding wells, this prospect has been developed as being on trend with an established fairway of production and directly offsetting a well that has produced 120,00 barrels of oil from the Sherwood. Within the fairway in the project area, wells in the Sherwood have been highly productive. Approximately
150 wells have produced greater than 19 million barrels of oil for an average of 129,000 barrels per well. With drilling depths of 6,500 feet to 8,000 feet and completed well costs of $1,200,000, the economics of the Berthold Prospect are excellent.
Based upon production histories of trend wells, we anticipate reserves of 179,000 barrels of oil, an initial rate of 100 BO/d, and a 10 month payout with a 10% discounted return on investment of 4.29x.ABOUT EMPIRE ENERGY GROUP
In early 2007, the Company established Empire Energy USA, LLC and currently holds around 96% of its issued capital. Empire Energy USA is an oil and natural gas producer and also operates a small oil and gas field service operation. It has operations in Appalachia (New York and Pennsylvania) and the Central Kansas Uplift (Kansas).
Empire Energy implemented a US$100 million credit facility with Macquarie Bank Limited in early 2008 for the sole purpose of acquiring and developing oil and gas assets in the USA. This facility has been increased to US$150 million.
For more information: Bruce McLeod
Empire Energy Group Limited
+61 2 9251 1846