Empyrean Energy PLC (AIM:EME) says the chances of success at the Jade project have increased as data captured during on-going drilling appears to back up pre-drill predictions.
The presence of methane “gas clouds” at expected depths of the Jade well validates Empyrean’s pre-drill interpretation of seismic data, the company said in a statement.
Empyrean as a result increases its in-house estimate of geological chance of success to 65% from 41%, and, at the same time lifted its GCOS estimate for the separate Topaz prospect to 47% from 35%.
Early deals in London saw Empyrean shares jump more than 19%, to change hands at 12.15p.
Jade has been drilled down to a depth of 2,150 metres and presently operations are focussed on casing the well, before deepening the well down to the target depth of 2,860 metres.
"The first technical objective of the Jade well has now been drilled,” said chief executive Tom Kelly.
“The validation of "gas clouds" through the presence of elevated methane levels in exactly the depth zone we interpreted on the excellent quality seismic data proves that the gas clouds exist and supports the Company's pre-drill interpretation that the methane is probably coming from light oil in the anticipated reservoir section.
“This is a major box now ticked, if we are to make a light oil discovery at Jade.
“The comparisons to nearby CNOOC discovery wells look very compelling. Drilling operations continue to run smoothly and safely, with progress to date right on schedule".
Methane levels
In Tuesday’s stock market statement the company reported elevated methane levels, between 227 parts per million to 15,440 ppm in the expected “gas cloud” section of the well.
China National Offshore Oil Company (CNOOC) – the state oil firm, nearby operator and potential future partner in the Jade project – has confirmed comparable methane ranges in its oil discovery well located some 10 kilometres from Empyrean’s exploration project.
CNOOC has the right to assume a 51% participating interest in the development and production phases of the project.