Empire Energy Group Limited announced C-3H drilled to total depth of 4,460 metres on time and under budget. Total horizontal section length of 2,632 metres drilled, of which 2,374 metres was successfully placed within the target Velkerri-B shale formation, with strong gas shows throughout the target shale zone. This represents by far the longest horizontal section drilled in the Beetaloo to date.

Forecast total cost for C-3H drilling of <$11 million compares favourably to Carpentaria-2H and is a small fraction of the cost of drilling deeper Beetaloo wells. Fracture stimulation operations and production testing of C-3H, fully funded from existing cash at bank, scheduled to commence in early December 2022. C-3H fracture stimulation design will benefit from cutting edge technological learnings from Empire's recent C-2H fracture stimulation and flow testing program, which is likely to enhance well productivity, particularly flow rates.

Drilling of C-4V scheduled to commence in the coming weeks following mobilisation of the rig from the C-3H location. Empire has received a Research and Development Tax Offset of $7.8 million in cash and a GST refund of $1.6 million in cash following processing of its September Business Activity Statement. Incredibly tight Australian gas market conditions are driving significant commercial interest from potential customers for Empire's low CO2 gas which is likely to facilitate the company's rapid commercialisation strategy.

"The successful drilling of Carpentaria-3H, on time and below budget, and without any recordable health and safety or environmental incidents, demonstrates that the Empire team continues to lead the development of the Beetaloo Basin. The final cost of drilling and casing this well is likely to be lower than the cost of Empire's first horizontal well, Carpentaria-2H, despite having double the length of horizontal section within the target Velkerri-B shale section, and lower than the cost of Empire's first vertical well, Carpentaria-1. This clearly demonstrates the rapid learning curve the company is progressing along, and further enhances the team's confidence that the company may be able to commercially extract very large volumes of gas from EP187. The Empire team believes that shallower acreage provides a development cost advantage.

This has been reinforced by Carpentaria-3H horizontal well that was drilled for less than a third of the cost of the Maverick-1V vertical well recently drilled in the deepest part of the basin. In the success case, this may result in Empire's Beetaloo Basin gas being one of the lowest cost sources of large-scale gas supply into Australia's critically short East Coast gas market and ultimately into the Asian LNG market, which will require responsibly sourced gas supply for many decades to support the energy transition.