Energy: Empire Energy secures NT approval to drill shale gas well

Empire Energy Group’s (ASX:EEG) goal of becoming one of the frontrunners in unlocking the shale gas potential of the McArthur and Beetaloo Basins in the Northern Territory is now poised to begin.

It has received NT government approvals for the drilling of Carpentaria-1, allowing the company to finalise well design and carry out formal tendering with service providers.

The news has piqued the interest of investors, with shares in the company creeping up 3.3 per cent this morning.

Empire is in good company in the two basins, with majors like Origin Energy (ASX:ORG) and Santos (ASX:STO) having started drilling on their substantial acreage positions.

And the results are encouraging.

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.

This compares favourably with Mitchell Energy’s SH Griffin #4 well that first launched the US shale revolution.

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

With both companies planning to drill more horizontal wells this year, Empire is in good company as it moves to drill Carpentaria-1 as a vertical well to appraise the Velkerrri and Kyalla shales.

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.

Carpentaria-1 will most likely incorporate an extensive formation evaluation program that will include the recovery of cores from both shales to provide information relating to hydrocarbon composition and content.

This will provide the information required to design the future fracture stimulation programs that are critical for flow testing and commercial hydrocarbon production.

Additionally, the well will be designed in a way that allows it to be suspended for future re-entry and evaluation work.

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