Empyrean Energy PLC (AIM:EME, FRA:E1E) signed up a rig for the planned Jade exploration well in China, setting a December spud date.
The company awarded the contract to China Oilfield Services Limited (COSL) which proposed a significantly reduced drilling cost estimate of US$12.3mln, compared to a prior US$18.5mln estimate, with a US$7.4mln success-based bolt-on for testing.
Planning and permitting operations are continuing. Empyrean noted that COSL has confirmed its availability along with all technical, commercial and contractual terms.
"This award of contract to COSL at approximately 34% below our previously anticipated drilling cost estimate is a massive leap forward for Empyrean and the reduced drilling cost is effectively better than a 34% JV style deal as there is zero dilution to Empyrean,” said chief executive Tom Kelly.
“The countdown to the drilling of the Jade prospect has begun. Locking in rig availability, finalising costs and setting a target spud date were all essential to securing the remaining funds required to drill the Jade Prospect whether that be by JV, warrant exercise or equity raise.”
Kelly meanwhile also noted the company’s thanks to China National Offshore Oil Company (CNOOC) for its continued support and cooperation.
Empyrean presently owns 100% of the exploration rights to Block 29/11, which hosts Jade, and CNOOC is entitled to ‘back-in’ to a 51% interest to the project.