Dempsey to produce commercial gas flows at ~1,200 mcf per day
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 ("Dempsey") in the Sacramento Basin, onshore California, that Dempsey will very shortly produce into the sales gas pipeline at an anticipated rate of 1,200 mcf per day from Field Level Kione Sandstone and the combined Zones 2, 3 and 4. Consequently, Dempsey will very shortly be generating cash flow for the Dempsey JV partners. Empyrean has a 30% working interest in the Dempsey Gas Project.
Zone 4 was perforated and tested with gas flow co-mingled with production from Zones 2 and 3 at a combined rate of 175 mcf / day on a 12/64" choke with associated minor water. The gas contribution from Zone 4 is interpreted to be minimal. The field and older zones in the well will now be produced and monitored in separate streams (via a dual completion) at the surface to enable reservoir assessment as the basis for further development activities in these levels.
Based on test data the Dempsey well has produced clean dry natural gas from a vertical interval of over 2,000 feet, and this information will be integrated with geology and seismic to evaluate production options, including reservoir production enhancement through fracture stimulation, and alternative deviated well configurations.
Production data and economic assessments will determine the development plans for Dempsey reservoirs and associated JV drilling activities in the Sacramento Basin.
Sacgasco also advised of advanced plans to connect four idle wells into the sales gas system in the Dempsey area that are hoped to add to production and cash flow.
Applications have been submitted to the regulator to permit re-entry of the Alvares 1 wellbore. The plan is to assess the integrity of the well bore as the basis for a decision to either log through casing and perforate zones of interest for natural gas production, or alternatively drill a sidetrack well to enable gas-filled reservoir assessment in a newly drilled interval of reservoirs. Commencement of these activities is planned for Q3 2018.
Empyrean CEO Tom Kelly commented, "Thanks to the close proximity of existing infrastructure owned by the JV, the Dempsey Well can be connected to the sales pipeline in an expedited timeframe. With production of commercial gas flows at ~1,200 mcf per day imminent, we look forward to reaping the benefit from this early cash flow as one of the JV partners with a 30% working interest. Additionally, there is significant upside potential from nearby wells where plans are in place to connect four idle wells into the grid to further increase production and cash flow. We also look forward to providing further updates on the Alvares 1 wellbore, where Sacgasco is planning to commence activities in Q3 2018."