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Empyrean Energy PLC: DEEP DIVE

Higher production bolsters Empyrean Energy

Revenues were US$6.0mln (US$7.9mln) and profit before tax US$1.83mln (US$2.7mln).
Higher production bolsters Empyrean Energy
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Since the half year, 1P reserves had risen further to 6.58 MMboe

Increased production and lower drilling costs from the Sugarloaf field in Texas kept Empyrean Energy (LON:EME) in profit in its latest half year, despite the slump in oil prices.

Revenues and profits had been impacted by the slide in the oil price, but to remain in profit was a rarity among junior oil and gas companies at present the company said.

Production in the half year to September rose in aggregate to a net 224,182 barrels equivalent boe (199,952 boe) as operator Marathon significantly boosted the number of wells pumping at the onshore oil field.

Empyrean has a 3% working interest, which generated revenues of US$6.0mln (US$7.9mln) and a profit before tax of US$1.83mln (US$2.7mln).

Tom Kelly, chief executive, added it had also added significant value to its Sugarloaf AMI assets during the six months with Proven Reserves (1P) 63% higher at 5.78 MMboe (million) while Probable Reserves had improved by 130% to 6.86 MMboe. 

Since the half year, 1P reserves had risen further to 6.58 MMboe with a near 10% rise in Probable Reserves to 7.53 MMboe.

“In terms of forthcoming activity, the indicative drill schedule for 2016 is targeting approximately 80-100 wells.  We also hold three highly prospective assets onshore US,“ Kelly added. Marathon has 281 wells in production at the end of November.

"Marathon remains committed to developing the Sugarloaf AMI. 58 wells were spudded during the period in total, with an increased proportion drilled to the Austin Chalk formation. 

"Appraisal of the Upper Eagle Ford Shale is developing positively and results to date are reflective of the Lower Eagle Ford Shale, which has been our main target to date. 

Considering the reduced drilling costs, and the increased production rates, we believe the Sugarloaf AMI is well positioned for growth in 2016." 

Empyrean has a loan facility with Macquarie Bank that totalled US$19.7mln at the end of September.

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