Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) has witnessed consistently robust gas flow rates at the Carpentaria-2H (C-2H) well in Australia’s Beetaloo Sub-Basin. The sustained gas production has renewed the company’s confidence in the commercial viability of its EP187 asset. Over a period of 127 days, C-2H has delivered an impressive total of 323 terajoules (TJ) or 281 million standard cubic feet (mmscf) of gas. The gas composition has remained consistent, characterised by high calorific value and extremely low levels of carbon dioxide (CO2).
Encouraging Production Rates
The gas flow rate at C-2H during the test period has averaged 2.75 TJ or 2.4 mmscf per day per 1,000 meters, showcasing the consistent performance of the well. Following a comprehensive analysis of the gas composition, the post-soak 2023 IP30 (Initial Production Rate over 30 days) is now confirmed at 3.5 TJ or 3.0 mmscf per day per 1,000 meters. These encouraging production rates demonstrate the potential of the Beetaloo Sub-Basin and reinforce the commercial prospects of Empire Energy Group’s EP187 asset.
Positive Implications for Development Wells
The cumulative gas production of 323 TJ over 127 days from C-2H is equivalent to the production of over 1,000 TJ for a fully optimised 3-kilometer horizontal development well within the same time frame. This achievement is noteworthy, considering that C-2H represents an unoptimised well that has undergone testing with multiple completion methodologies. The promising performance of C-2H augurs well for the future development of wells in the region.
C-2H Shut-In, C-3H to Resume Testing
Currently, the C-2H well has been “shut in” and will be preserved as a future gas producer. On the other hand, the Carpentaria-3H (C-3H) well will reopen for flow testing after the completion of its soaking period. Soaking involves temporarily shutting in a shale gas well following fracture stimulation. This practice enhances long-term productivity by allowing the redistribution and interaction of residual water with the rock formation.
Progress Towards the Carpentaria Pilot Project
The front-end engineering and design for the Carpentaria Pilot Project are currently underway. This critical phase will pave the way for the final investment decision. As the project advances, Empire Energy Group remains focused on optimising operations and realising the full potential of the Beetaloo Sub-Basin.
Favourable Gas Price and Path to Commercialisation
The economic outlook for Empire Energy Group’s gas production looks promising. Assuming a gas price of $10/GJ, which is significantly below the current spot price at Wallumbilla, an optimized 3-kilometer development well could generate over $10 million in gross revenue before royalties over the first 127 days of commercial production. These revenue projections, combined with the recent regulatory developments by the Northern Territory Government and the strong domestic gas market, provide a clearer path towards commercialisation for Empire Energy Group’s operations in the Beetaloo Sub-Basin.
Empire Energy Group’s Carpentaria-2H well has demonstrated consistently strong gas flow rates, reinforcing the commercial viability of the EP187 asset in the Beetaloo Sub-Basin. The impressive production figures and positive gas composition highlight the potential of the region and support the company’s optimism for future development wells. With ongoing progress in the Carpentaria Pilot Project and a favourable gas price environment, Empire Energy Group is steadily advancing towards commercial production, positioning itself for long-term success in the Australian gas market.
