Empyrean Energy : Oil Migration Study Completed - Block 29/11 Offshore China

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Empyrean Energy PLC - EME Oil Migration Study Completed - Block 29/11 Released 07:50 18-Jun-2018

RNS Number : 6742R

Empyrean Energy PLC 18 June 2018

This announcement contains inside informa�on

Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil & Gas

18 June 2018

Empyrean Energy PLC ("Empyrean" or the "Company")

Oil Migra�on Study Completed - Block 29/11 Offshore China

• · Large Jade and Topaz prospects interpreted to be poten�ally filled from at least two different pathways

• · Large Pearl prospect interpreted to be filled via a pathway from the large oil field to the North

• · Proven Baiyun Sag East ("BSE") basin interpreted to have oil migra�on pathway to Block 29/11

• · 3D seismic data iden�fied a new small sag that has been named Baiyun Sag North ("BSN") and is located en�rely within Block 29/11 between the Jade and Topaz prospects

• · A convincing "seismic �e" with addi�onal migra�on pathways has been established between the 2013 CNOOC Limited ("CNOOC") oil discovery LH 23-1d-1, immediately west of Block 29/11, and the Jade prospect

• · The Study has established valid drilling targets that are of significant size with rela�vely low geological risk

Empyrean Energy (EME: AIM), the oil and gas development company with interests in China, Indonesia and the United States, is pleased to announce that a comprehensive oil migra�on study ("the Study") encompassing China Block 29/11, for which it holds 100% explora�on rights, has now been completed and has established poten�al oil migra�on pathways into the Jade, Topaz and Pearl prospects.

The Study was supported by geoscien�sts from CNOOC (Shenzhen branch) who shared the comprehensive viewpoints of their previous study in this area.

The Study established the maturity profile of source rock, and confirmed that the source rock in the BSE area was at peak maturity when oil expulsion commenced. The main implica�ons for Block 29/11 prospec�vity are interpreted to be very posi�ve with the en�re source rock within BSE interpreted to have produced hydrocarbons. In addi�on, any poten�al oil accumula�on in Block 29/11 prospects are expected to be light and therefore similar to the oil discoveries around Block 29/11 that range from 33-38 API.

The Study also validated the interpreted oil migra�on pathways from the known oil sources of the Enping Forma�on (Paleocene aged) within the BSE into the several oil discoveries made by CNOOC to the immediate West and South of Block 29/11 since 2010, and thus provided strong evidence of a prolific petroleum system in the area. At the same �me, the Study interprets effec�ve migra�on pathways from BSE towards the northern flank of the Baiyun upli� where the Jade and Topaz prospects are located.

In addi�on, 28km2 of 3D seismic data that was acquired outside Block 29/11 over the 2013 CNOOC oil discovery LH 23-1d-1 which is located 8km west of the Jade prospect, has helped confirm poten�al "fill-and-spill" pathways to the Jade structure from the oil discovery. Whilst early explora�on techniques such as this are no guarantee of explora�on success, the Company believes that this form of "seismic �e" to a nearby known discovery helps to reduce the risks associated with explora�on and provides an improved understanding of the geology in the basin and within Block 29/11.

Comprehensive interpreta�on of the 2017 3D seismic data has helped map a new sub-basin called Baiyun Sag North. BSN is located between the Jade and Topaz prospects and is located en�rely within Block 29/11. The Study confirms a poten�al effec�ve migra�on pathway from BSN into the Jade and Topaz prospects.

The Study also indicates that the Pearl prospect is poten�ally located in a migra�on shadow for oil migra�ng from BSE or BSN. As a result, further work has been done focussing on the possibility of migra�on from the Huizhou Sag located NW of Block 29/11. The Liuhua 11-1 field complex that contained an es�mated 1.1 billion barrels of oil is located immediately North of Block 29/11 and has been interpreted to have received oil from Huizhou Sag. Addi�onal work completed now indicates that the Pearl prospect is located favourably for receiving oil charge from Huizhou Sag.

Empyrean CEO Tom Kelly commented, "The findings from this oil migra�on study are very promising with effec�ve poten�al oil migra�on pathways established into all three of our prospects on Block 29/11. Interpreta�on of the poten�al effec�ve migra�on pathways from the established kitchen area - Baiyun Sag East - as well as from the new kitchen area - Baiyun Sag North - into Block 29/11 helps increase our overall understanding of the geology of the block and the Jade and Topaz prospects in par�cular. The addi�onal work has also confirmed a poten�al oil migra�on pathway from the Liuhua 11-1 field complex to the Pearl prospect.

"We have been rigorous with the pre-drill subsurface data and explora�on tools available to us and we believe that the detailed and comprehensive technical work we have completed to date significantly reduces the geological risks to a point where we have established excellent drilling targets that are of significant size with rela�vely low geological risk."

**ENDS**

The informa�on contained in this announcement was completed and reviewed by the Company's Execu�ve Director (Technical), Mr Gajendra (Gaz) Bisht, who has over 28 years' experience as a petroleum geoscien�st.

Notes to Editors

About Empyrean Energy Plc (LON: EME)

Empyrean is a London AIM listed oil and gas explorer with three poten�ally high impact new projects. Empyrean has a 1,800km2 offshore oil permit located in the Pearl River Mouth Basin, China where it has completed 3D seismic in Q3, 2017 to further mature two large oil prospects, Jade and Topaz. Processing and interpreta�on is underway and preliminary internal interpreta�on of the raw seismic data has confirmed the structural validity of the Jade and Topaz prospects and also iden�fied a third significant target named Pearl, which is located north of Topaz. The permit is directly South East of the billion barrel+ Liuhua Oil Field operated by CNOOC Limited and two recent discoveries to the permits West and South further enhance the merit of Jade and Topaz. Empyrean is operator and holds 100% of the explora�on rights through to commercial discovery where CNOOC Limited have a back-in right to 51%.

Empyrean also has a 10% interest in West Natuna Explora�on Limited that holds 100% of the Duyung PSC in offshore Indonesia and is targe�ng the Mako Shallow Gas Discovery that has an independently verified 2C and 3C gas resource of between 430-650 Bcf recoverable gas. Successful tes�ng opera�ons were recently completed at the Mako South-1 Well with 10.9 million cubic feet of gas flow and be�er than expected reservoir quality and mul� Darcy permeability. The operator is currently analysing data with a view to providing a development plan.

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