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EMPYREAN SELECTS COSL FOR THE DRILLING OF JADE PROSPECT OFFSHORE CHINA

Empyrean Energy advised that it has awarded an Integrated Drilling Contract (IDC) for the drilling of the Jade prospect exploration well on Block 29/11, offshore China, to China Oilfield Services Limited (COSL).
Block 29/11 is a large block of 1806 square kilometres located in the prolific Pearl River Mouth Basin, offshore China, approximately 200km Southeast of Hong Kong.
Highlights:
• Award of IDC to COSL with targeted well spud date set for 15 December to 30 December 2021
• Drilling rig availability confirmed and all technical, commercial and contractual terms agreed
• The final IDC requires a Drilling Program and Geological Program to be incorporated (underway) in the coming weeks
• COSL proposal includes a significantly reduced drilling cost estimate of US$12.3m (previous estimate US$18.5m), plus a success-based testing cost estimate of US$7.4m
• Drilling Program, Geological Program, preparation for the Well Site Survey and preparation for various permits required to drill are all underway
Empyrean is the operator of Block 29/11 in China and has 100% working interest during the exploration phase. In the event of a commercial discovery, its partner, China National Offshore Oil Company (“CNOOC”), may assume a 51% participating interest in the development and production phase.
As part of the award process, the Company and COSL have agreed all technical, commercial and contractual terms and COSL has confirmed rig availability and a target spud date of 15 December to 30 December 2021 for the Jade Prospect. A condition of the award is that Empyrean and COSL have now agreed that there will be no further exceptions, qualifications or deviations to the technical, commercial and contractual terms and conditions ahead of signing the IDC. The Drilling Program and Geological Program are the only remaining items to be incorporated into the IDC and are procedural in nature. CNOOC approval was sought and provided ahead of the award of the IDC and all parties are aligned in the targeted timing to drill the Jade Prospect in mid to late December.
As announced on 23 April 2021, Empyrean appointed AGR to complete a comprehensive well design and engineering project for the Jade Prospect. Empyrean then elected, based on AGR’s analysis and recommendation, to use a four-string casing design for the drilling of the Jade Prospect.
The Jade Prospect has a GCA audited mean in place potential of 225 MMbbl and a P10 in place upside of 395 MMbbl. Four recent nearby discoveries by CNOOC immediately to the West of the Jade Prospect are filled to their P10 potential or better. All four CNOOC discoveries have gas clouds showing in the overburden on seismic.
Empyrean based in Subiaco, Western Australia, is currently focused on three cornerstone assets with transformational potential: Block 29/11 offshore China; the Duyung PSC offshore Indonesia and a multi project participating interest in the Sacramento Basin, California.
(Source: Empyrean Energy)