Empyrean Energy: Production Testing at Onshore Californian Gas Discovery Set to Resume

Dempsey Production Testing to Resume

  • Testing to recommence this month
  • Moving progressively up hole and beginning with two gas reservoir intervals (Zone 3) covering over 400 gross feet (120+ metres)
  • Plan has been carefully designed to test more zones before reaching overlying field production zones
  • Focus on testing zones with the potential to flow without stimulation first, whilst maintaining the optionality to revisit any zone and stimulate, if required, later


Empyrean Energy (EME: AIM), the oil and gas development company with interests in China, Indonesia and the United States, is pleased to announce that it has been informed by Sacgasco Limited (ASX: SGC) (“Sacgasco”), the operator of the Dempsey 1-15 well in the Sacramento Basin, onshore California, that production testing of the Dempsey 1-15 well will re-commence this month following review of all existing results and data collected to date. The review has involved in-house technical capability, independent consultants, technical collaboration with partners and leading US well completion and stimulation experts. 

The new program has been designed to allow earlier than previously planned testing of shallower zones that exhibit extensive gas shows and higher porosity and therefore are perceived to have a greater chance of flowing without stimulation, while preserving the opportunity for more testing and possibly reservoir stimulation of all zones in the well, including the previously tested deeper interval (Zone 2). Empyrean had previously announced on 17 January 2018 that production had commenced from Zone 2 and that stimulation was expected during Q1. The production and pressure data collected since 17 January in conjunction with the technical review has enabled the joint venture to formulate a more flexible forward operation plan.

Sacgasco will shortly commence operations to access two shallower potentially gas-filled reservoir sands (Zone 3) covering a gross interval of gas shows over 400 feet (120+ metres) at the same time as allowing access to the currently producing interval (Zone 2).

Technical analysis completed by Sacgasco indicates that Zone 3 potentially contains reservoir sands with significantly better porosity than exhibited by the tested Zone 2. Zone 3 sands also have a strong seismic signature, with positive seismic attributes interpreted to reflect better reservoir continuity and extent.

Other, as yet, untested zones of potentially gas saturated reservoirs, separate from the overlying field-level reservoirs, exist above Zone 3 and may also be tested. Sales of natural gas being produced from Dempsey 1-15 will continue until Zone 3 testing work begins this month. 

Sacgasco confirms that a draft application to stimulate zones in the Dempsey well, should that be necessary in future, is near completion. The application is structured to accommodate future flexibility. Consultation with Government authorities and consultants on aspects of the stimulation process has occurred, and includes production and pressure data collected from the well since 17 January. Lodging of the application is part of the final process to achieve approval to stimulate.

Empyrean CEO Tom Kelly commented, “We look forward to testing operations re-commencing at Dempsey following an extensive technical review process.  We have worked closely with Sacgasco, the operator of the well, to review the existing data, results and views of independent consultants. We are delighted to have reached consensus on forward operations that allow imminent testing of further prospective zones whilst maintaining the flexibility to revisit any zone at a later date to produce, re-evaluate or stimulate if required. Shareholders should note that Empyrean believes that testing these zones higher up in the well before any plan to fracture stimulate a deeper zone (or any zone for that matter) may provide a better chance of commercial gas flows and is a more logical next step now that we are able to stimulate at a later date if needed.

“Shareholders should also note that the draft application to stimulate has benefitted from extensive consultation with experts and authorities since our last update and also from the production and pressure data collected over that time. This work and consultation process is expected to result in a much smoother approval process given that the data and consultation were required in any case. Put simply, Empyrean supports the efforts being made by Sacgasco on the forward testing program and the stimulation application and reiterates that stimulation approval would not have been hastened by lodging the application earlier without the collected data and consultation process. We are excited and wish Sacgasco and the JV partners well for a safe and rewarding testing program.”

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