Empyrean Energy PLC (AIM:EME) told investors it has applied for an extension to Block 29/11, after the deadline for drilling a well passed.
The company did not start drilling a well before 12 June, as required under its terms with China’s state oil file CNOOC.
It noted in a stock market statement that last year it engaged LAB Energy Advisors to explore risk-sharing alternatives and farm-out opportunities for the Topaz prospect, in Block 29/11, and, despite significant interest in the project's technical merits, no farm-out deal has yet been finalised.
The company said it will announce further developments for Block 29/11 if an extension is granted.
"Empyrean continues to enjoy a very professional and cooperative working relationship with CNOOC on Block 29/11,” chief executive Tom Kelly said.
“We will do everything within our control to continue this working relationship.
“Empyrean acknowledges that negotiating GSA's involving governments and government bodies are often protracted in their negotiation timelines and these delays have impacted Empyrean's ability to fund its objectives in China in a timely fashion.”
Advancing Mako gas project
Elsewhere, Empyrean said it is focused on maximizing the value of its 8.5% interest in the Mako gas field discovery on the Duyung permit in Indonesia.
The sell-down process, coordinated by Jefferies International Bank, is ongoing.
A heads of agreement (HOA) for domestic gas sales into Indonesia and Singapore has been reached, and, it is expected to be converted into a binding gas sales agreement (GSA) soon.
Tom Kelly added: “We will continue to work towards maximising the substantial value from our Mako discovery in Indonesia in order to move forward with our plans to create value for shareholders.
“By making the submission for an extension in China, we plan to have options in addition to the existing projects in the Sacramento Basin.
“We are also being proactive in identifying additional low-risk/high-impact opportunities that will complement our portfolio as we monetise Mako."