Empire Energy provides an update on its operations in the Beetaloo Sub-basin, Northern Territory, Australia.

The record-breaking Carpentaria-3H well has been drilled on time and under budget. Fracture stimulation and flow testing of C-3H and Carpentaria-4V (C-4V) drilling to commence imminently.

• C-3H drilled to total depth of 4,460 metres on time and under budget
• Total horizontal section length of 2,632 metres drilled, of which 2,374 metres was successfully placed within the target Velkerri-B shale formation, with strong gas shows throughout the target shale zone. This represents by far the longest horizontal section drilled in the Beetaloo to date
• Forecast total cost for C-3H drilling of <$11 million compares favourably to Carpentaria-2H and is a small fraction of the cost of drilling deeper Beetaloo wells
• Fracture stimulation operations and production testing of C-3H, fully funded from existing cash at bank, scheduled to commence in early December 2022
• C-3H fracture stimulation design will benefit from cutting edge technological learnings from Empire’s recent C-2H fracture stimulation and flow testing program, which is likely to enhance well productivity, particularly flow rates
• Drilling of C-4V scheduled to commence in the coming weeks following mobilisation of the rig from the C-3H location
• Empire has received a Research and Development Tax Offset of $7.8 million in cash and a GST refund of $1.6 million in cash following processing of its September Business Activity Statement
• Incredibly tight Australian gas market conditions are driving significant commercial interest from potential customers for Empire’s low CO2 gas which is likely to facilitate the company’s rapid commercialisation strategy
• Current cash at bank is $33.5 million

Comments from Managing Director Alex Underwood:
"The successful drilling of Carpentaria-3H, on time and below budget, and without any recordable health and safety or environmental incidents, demonstrates that the Empire team continues to lead the development of the Beetaloo Basin. The final cost of drilling and casing this well is likely to be lower than the cost of Empire’s first horizontal well, Carpentaria-2H, despite having double the length of horizontal section within the target Velkerri-B shale section, and lower than the cost of Empire’s first vertical well, Carpentaria-1. This clearly demonstrates the rapid learning curve we are progressing along, and further enhances the team’s confidence that we may be able to commercially extract very large volumes of gas from EP187.

The Empire team believes that our shallower acreage provides a development cost advantage. This has been reinforced by our Carpentaria-3H horizontal well that was drilled for less than a third of the cost of the Maverick-1V vertical well recently drilled in the deepest part of the basin.

Our technical team is analysing critical data from the recent successful Carpentaria-2H flow test, which is steering us towards further optimization of the fracture stimulation and perforation design for the upcoming Carpentaria-3H stimulation and flow testing program. We will soon re-enter Carpentaria-2H to run a Production Logging Tool (“PLT”) which will give us highly granular data about the relative contribution to flow rates from each fracture stimulation stage and each cluster within those stages in the Carpentaria-2H horizontal well section. These data, combined with tracer data collected during the initial C-2H flow testing program, will provide critical insights into the optimal way to fracture stimulate and flow test the Velkerri B shale.

We anticipate that our data-driven process of fracture stimulation and perforation design optimization, utilizing industry best practice technology and expertise, will drive continuous productivity improvements.

In the success case, this may result in Empire’s Beetaloo Basin gas being one of the lowest cost sources of large-scale gas supply into Australia’s critically short East Coast gas market and ultimately into the Asian LNG market, which will require responsibly sourced gas supply for many decades to support the energy transition.

Many thanks to our dedicated team for your hard work and professional approach, which has driven this excellent result. I look forward to sharing further news with shareholders in the coming weeks as we continue to execute the most active work program in the history of the Beetaloo Basin."

Betaloo Basin operations

Empire Energy’s 100%-owned subsidiary Imperial Oil & Gas Pty Limited is the holder of the largest acreage position (>28m acres) in the highly prospective Betaloo Basin. Technically the Beetaloo is a sub-basin of the McArthur Basin, and now gaining global recognition as an important and emerging shale gas frontier. 

The Beetaloo Basin is fast developing proof that its extensive shale targets are gas-rich, and potentially liquids- rich, and offer a possible boost to future East Coast Australia’s energy supplies. On top of this, production from the Beetaloo could substantially lift Australia’s growing LNG exports by processing and shipping through Darwin’s expanding terminals. Both options are enjoying strong policy support from both the Northern Territory and Federal governments. 

The Beetaloo Basin alone is thought to contain recoverable shale dry gas volumes of over 100 Tcf, with liquids upside. Although yet to be proven, the scale of this estimated resource compares favourably with the scale of resources at Australia’s Northwest Shelf where exports have kept Australia ranking as one of the top two seaborne exporters of LNG for some years. 

KeyFacts Energy: Empire Energy Australia country profile