Empyrean in talks with Chinese partners to confirm rig slot for ‘one of the highest impact wells’ in 2022

Following a drilling hiatus due to bad weather conditions, Empyrean Energy is engaged in further discussions with China Oilfield Services Limited (COSL) and China National Offshore Oil Company (CNOOC) to finalise rig availability and an anticipated spud date for the Jade prospect well, located in Block 29/11 offshore China.

After Empyrean and COSL executed an integrated drilling contract in November 2021 for the drilling of the Jade prospect, the well was supposed to be spud between 15 December to 30 December 2021. However, poor weather conditions delayed the timeline.

In an update on Monday, Empyrean informed that the COSL survey team had taken advantage of a small operable weather window – after a sustained period of unsuitable weather – to complete the well site survey at the Jade prospect. This included a number of gravity samples and an analogue survey over the prospect’s drill location and rig anchoring points.

Tom Kelly, Empyrean CEO, remarked: “We are delighted that the COSL survey team has been able to complete the well site survey, given the sustained unfavourable winds and swells encountered over the past 6 months. This now enables the completion of the permitting process with the survey report being the final box to tick.”

The CNOOC EnerTech team – hired last November to manage a number of critical pre-drilling permitting and logistical requirements – has secured seven of the eight critical pre-drilling permits, while awaiting suitable weather conditions over the past months, based on Empyrean’s statement. The company also explains that, with well site survey completed, it can now lodge the application for the final permit to drill the Jade prospect.

“Over the past few months the Empyrean, COSL and CNOOC EnerTech teams have been hard at work to finalise all required permits to drill the high impact and exciting Jade prospect,” added Kelly.

Furthermore, the firm says it is currently in discussions to confirm a final rig slot for drilling operations, which would be done using the COSL-owned Nanhai 9 (NH9) rig. The rig is currently drilling a well for CNOOC in the region and Empyrean expects to announce the targeted spud date for the Jade prospect well as soon as these negotiations are complete and scheduling becomes clear.

Empyrean is the operator of Block 29/11 in China and has 100 per cent working interest during the exploration phase. However, its partner, CNOOC, may assume a 51 per cent participating interest in the development and production phase in the event of a commercial discovery.

The Jade prospect is the first of the three identified prospects within Block 29/11, which also contains the Topaz and Pearl prospects and the combined audited mean in place potential of all three prospects is 884 MMbbl and a P10 in place upside of 1,588 MMbbl.

With a GCA audited mean in place potential of 225 MMbbl and a P10 in place upside of 395 MMbbl,  the Jade prospect lies immediately to the west of four recent nearby discoveries CNOOC, which are filled to their P10 potential or better and have gas clouds showing in the overburden on seismic, according to Empyrean.

Moreover, Empyrean’s 3D seismic indicates that there is a classic “fill to spill” geological setup in the basin, and a robust regional seal, that provides the Jade and Topaz prospects with a very real possibility of being filled in a similar fashion to nearby discoveries. Similar to nearby discoveries, the Jade and Topaz prospects both have gas clouds in the overburden on 3D seismic, while dry wells nearby do not have gas clouds.

The company also adds that a post-stack seismic inversion study showed Jade and Topaz both have the potential for excellent carbonate buildup reservoir quality with excellent porosity and permeability.

Similar to nearby discoveries, any oil discovered is expected to be light oil in the 38-41 API range. The firm further elaborates that the potential for excellent recovery rates is supported by these attributes combined with the potential for an exceptional natural reservoir.

“As advised previously, the Jade prospect looks to be one of the highest impact exploration wells scheduled for 2022, globally,” reminded Kelly.