Empire Energy, Warrego confirm big gas hits

Empire Energy (ASX:EEG) could have a 73-trillion-cubic-feet (Tcf) resource at Empire’s three wholly owned Northern Territory Beetaloo sub-Basin and McArthur Basin shale gas properties, according to an independent report.

The best estimate for undiscovered original gas-in-place is 73Tcf.

The best estimate for the prospective gas resource was 13.5Tcf and prospective oil volumes were 2,297 million barrels of oil equivalent (mmBOE), according to a report by Netherland, Sewell & Associates (NSAI).

Empire managing director Alex Underwood said it was a “substantial resource for a company of our size”.

The Beetaloo and McArthur basins are as yet undeveloped shale resources but there is strong government support for opening the region to production.

“The results of Empire’s recent 2D seismic program have enabled NSAI to evaluate prospects in EP187 which have a best estimate prospective gas resource of over 2.3Tcf in the Velkerri Shale and 14 million barrels of oil equivalent in the liquids rich Kyalla Shale,” Underwood said.

“This represents a near doubling of Empire’s Velkerri Shale independent prospective resource estimate and is the first time that the Kyalla Shale has been independently assessed as a prospective resource in our properties.”

Empire, which is increasingly looking to be one of the frontrunners in unlocking the shale gas potential of the McArthur and Beetaloo Basins, received NT government approvals for the drilling of Carpentaria-1 in March to appraise the Velkerrri and Kyalla shales.

Origin Energy (ASX:ORG) and Santos (ASX:STO) are also in the area and have started drilling their substantial acreage.

Santos’ Tanumbrini-1 well, which was fracture stimulated vertically, is reported to be producing over 1.2 million standard cubic feet (MMscf) of gas per day.

Origin has started its fracked horizontal drilling program that could drastically increase production rates.

Recent 2D seismic carried out by Empire indicated that the top of the Velkerri was located at a depth of about 2,200m and was 600m thick, while the shallower Kyalla shale was located at a depth of 1,200m.

Warrego gets set

Warrego Energy (ASX: WGO) also hit it big today with confirmation of a 513-billion-cubic-feet (Bcf) 2C contingent resource at its West Erregulla field.

It said there was additional potential in the 3C estimate of 966Bcf in the Central Area and a prospective resource for the Northern Area of 102Bcf.

Warrego said the latter figure could become a contingent resource in the event of a successful WE-3 well.

A review by RISC Advisory confirmed that West Erregulla was a significant gas discovery with low risk exploration upside, the company said.

The independent, third party evaluation of West Erregulla was commissioned to provide certainty to potential gas buyers as well as set the stage for talks around gas processing and sales.

Warrego recently fielded a bid from West Erregulla partner Strike Energy (ASX:STX), which it rejected.

“To achieve certified 2C contingent resources of 513Bcf gross from only one well confirms West Erregulla’s status as a world class asset with significant upside potential,” Warrego managing director Dennis Donald said.

“To put this in perspective, three wells were drilled on the nearby Waitsia field before similar volumes were booked.”