Empyrean Energy (LON:EME) boss Tom Kelly told investors that its 3% owned Sugarloaf operation, in the Eagle Ford shale, continues to be economic.
The chief executive said the company has a positive outlook for the year, now that it has secured financing from Macquarie and as more work continues at the project.
The Marathon Oil operated field had consistent production during the first quarter and Empyrean’s share amounted to 109,425 barrels oil equivalent, which equates to 1,216 boe per day.
Marathon continues to invest in the operation and according to Empyrean this has improved the efficiency of ongoing drilling activities. This has included wells that additionally target the Austin Chalk formation, and as a result boost reserves.
There were, at the end of the first quarter, 40 wells in the inventory which are at various stages of drilling or completion. Sugarloaf, as at March 31, had 205 producing wells including 28 which include the Austin Chalk.
Marathon also continues to enhance operations with a new ‘stack and frac’ approach which, according to Empyrean, has so far yielded encouraging results through the ‘pilot’ phase.
"Production from Sugarloaf continues to be economic even at current oil prices and has been maintained at steady rates, notwithstanding lower levels of drilling activity in the current, challenging oil price environment,” Kelly said.
“Despite the challenges the sector faces, we have a healthy inventory of drilled wells to be placed into production in the coming months. We are also encouraged by the early "Stack and Frac" pilot results and look forward to more data and analysis from Marathon.”
Empyrean last month agreed a financing package with Macquarie, which extended an existing facility, and provided access to an additional US$11mln.