The latest update from Empyrean Energy Plc’s (LON:EME) Dempsey well, onshore California, has disappointed investors, with a test in one interval showing a sub-commercial gas flow rate.
Empyrean told investors that the lowest zone in the Dempsey 1-15 well was a thin sand with poor reservoir characteristics, it flowed clean dry natural gas with no water but the gas flowed below the commercial threshold (based on current gas prices).
Nonetheless, Empyrean chief executive said the company remains optimistic about the potential of the remainder of the Dempsey well as more tests are planned for the other zones encountered in the well.
Flow testing operations are continuing as planned, Empyrean added.
The Dempsey well encountered stacked reservoirs, and pre-test estimates put the project’s potential prize between 116 and 352 billion cubic feet of gas based on all zones being ‘full’ of gas.
The project is located in close proximity to gas infrastructure which, in theory, means that the commercial threshold should be lower for new discoveries and successful testing could lead to an accelerated development into cash generative production.
Empyrean Energy shares dropped around 14% in afternoon deals, changing hands at 18.12p each.