Empyrean Energy (LON:EME) has revealed an independent upgrade of its reserves volumes at the Sugarloaf project, in the Eagle Ford play, Texas.
Proven (1P) reserves attributable to Empyrean’s 3% stake in the Marathon Oil (NYSE:MRO) operated project increased 13.84% to 6.58mln barrels oil equivalent, whilst probable reserves rose by 9.77% to 7.53mln barrels.
Together proved and probable reserves (2P) are up 11.63% at 14.11mln barrels.
Proved, probable and possible (3P) reserves increased by 10.9% to 23.2mln barrels.
The company said a valuation sees 1P reserves worth US$45.7mln (net present value, NPV), while the 2P is valued at US$135.9mln and the figure for 3P comes in at US$294.7mln.
“The value of the Sugarloaf AMI continues to improve even in the current oil price environment,” said chief executive Tom Kelly.
“These figures for the Lower Eagle Ford and Austin Chalk prove the robust nature of the asset and the increasing potential for exploitation.
“An increase of more than 10% across all reserve categories highlights the on-going development by Marathon and underpins its confidence in the asset.”
"Furthermore, the Upper Eagle Ford formation, which is a relatively new zone identified by Marathon for appraisal and development, is not included in these figures.”
Empyrean highlighted that there remains significant potential for the reserves to increase further as the Upper Eagle Ford Shale, which is still being drilled and evaluated, is not included and it is also expected that there could be further delineation of the Austin Chalk zones.
Kelly says he believes the Upper Eagle Ford represents an exciting development opportunity.
“This serves to reinforce the scalability of production at our flagship asset and its status as an attractive investment proposition,” he added.
“We remain optimistic about the development of the Sugarloaf AMI and believe that the long-term value of the project will be recognised in our valuation."