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ADI - Adelphi Energy

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A quick drop from 48 only a day ago, which is disappointing. As usual, on low vol, probably 1 seller wanting out, for reasons unknown.
Starting to really annoy me, how little management keep their share holders informed. What happened to wednesday updates? Or just updates?:mad:
I think I'll make time to call them today.
 
Another good day for trading between ADI and AUT. This time I took the advantage to reverse the trade I made last Thursday by selling the AUT and buying back the ADI. Without outlaying any funds I have increased my holding in ADI once again.
 
nioka said:
Another good day for trading between ADI and AUT. This time I took the advantage to reverse the trade I made last Thursday by selling the AUT and buying back the ADI. Without outlaying any funds I have increased my holding in ADI once again.
Click to expand...

as i said, i like your style, and i think your outstanding in this practice of cross trading so to speak!

my view is that the AUT announcement of "soon" is about to arrive, the ADI quartely will obviously contain the elements that we are all waiting for, and the wheels of motion are starting to crank up slowly.. the shackles are coming off, i think myself that this puppy is about to draw a breath and come to life.. maybe the end of the ground hog days!!
 
write up from ED - http://www.proactiveinvestors.co.uk/articles/art.php?EME5

A very active year for Empyrean has seen them establish modest production from shallow discovery wells at the Margarita Project in Texas, and in the last few days, confirm commercial gas flows at the Sugarloaf Project in Texas which is shaping up as a major discovery.

Tom Kelly, Chief Executive Officer of Empyrean Energy, has a straightforward game plan. Since listing in 2005, the concept of Empyrean was to invest in more advanced, technically sound projects that had drilling on the immediate horizon. Tom didn’t want to be chasing grass roots or frontier exploration projects that required years of investment and time before a drill-ready target was defined. Since listing, Empyrean has stuck to this model and is now reaping the rewards.

Empyrean listed on AIM in mid 2005 with the high risk/high reward Glantal Gas Project, in Germany and has since balanced their portfolio by earning into projects that offered the potential for near term production. Of course, oil and gas exploration and development is never an easy game, and all kinds of things can go wrong, even after a commercial discovery has been made. However, to date, Empyrean has had an impressive technical track record: every well the company has participated in has returned oil or gas shows. Completion problems at the Eagle Oil Pool, where oil shows were recorded, overshadowed the company, plus there were non-commercial gas flows from the first exploration well at Glantal. However, commercial discoveries from 3 out of 6 wells drilled at Margarita, in Texas, and recent news that two wells on the Sugarloaf Project have flowed commercial rates of gas, have rejuvenated shareholders’ optimism and sent the shares soaring.

Texas Crude Energy Inc (TCEI) first identified the Sugarloaf Project whilst examining seismic for shallower play types. The size of the structure made it one of the biggest untested structures onshore USA. The big appeal of the prospect was the potential for multiple pay zones at different depths. Empyrean started out with a 6% working interest in Block B, a 22,000 acre landholding operated by TCEI.

The first well drilled, Sugarloaf-1, identified multiple gas shows both in the Hosston sands and the secondary targets of the Austin chalks and Edwards formation. These carbonate plays are proven in discoveries all around the Sugarloaf license, with several significant oil and gas fields - discovered in the 1950s and 1960s - containing a cumulative 5TCF of gas and 100MMbbls of oil. Carbonates can provide excellent reservoirs for commercial accumulations due to natural cracks and fissures opening up permeability. In most cases, carbonates need to be fractured to open up the reservoir and allow natural cracks and fissures to connect and channel gas and/or liquids to the wellbore. Fracture stimulation of the Hosston Formation recovered only minor gas at a rate too small to measure, so a decision was made to plug off the Hosston and to test the shallower plays.

Before these shallower zones were tested, TCEI and partners increased their leased areas around the Sugarloaf discovery. Empyrean also announced a new deal with TCEI giving them an increased interest in wells drilled on Block B and also giving them an interest in wells drilled on the adjacent Block A where they previously had none. The new deal is for the next 16 wells drilled, after the Sugarloaf-1 well, on either Block A or B, where they earn 7.5% of Block A wells drilled as part of the 16 well deal and an additional 12% of Block B wells drilled as part of the 16 well deal. Assuming there will be 8 wells drilled on each block as part of the program - the deal gives them 7.5% of the Block A wells and a total of 18% working interest in 8 wells on Block B. Beyond the 16 well deal, Empyrean retain their 6% working interest in Block B.

Subsequently, the A-1 well - the first of the sixteen wells to be drilled - has returned spectacular results. The well was earmarked for fracture stimulation but flowed commercial quantities of gas during preparations. This is big news for Empyrean, as it implies that subsequent wells on the field may not require fraccing if natural cracks can be targeted; something that can be identified on 3-D seismic. Not having to fracc reduces the cost and complexity of the well completions. On testing, A-1 has already recorded flow rates exceeding 2mmcfepd (million cubic feet gas equivalent per day). This flow rate could increase substantially with fraccing.

Equally good results emanated from the A-3 well too, where a horizontal well stopped short of its proposed target after encountering strong gas flows and high pressure. Testing to date has recorded flow rates exceeding 7.8mmcfepd - this time from an open hole test, again with no fracture stimulation.

All of this recent good newsflow has sent shares in Empyrean soaring, with the prospect of the company having an interest in, potentially, one of the largest U.S. gas field discoveries for many years. Results to date are excellent, and the potential to drill horizontal wells and increase gas flow by multiples is very enticing. In many ways, Empyrean Energy’s business model has been completely vindicated by the success at Sugarloaf, and enticingly, there are plenty more wells to drill. Results from the Kennedy 1 Well are pending.

The past twelve months have been particularly active for Empyrean Energy with a largely successful campaign of shallow wells in Texas bringing the company its first cash flow. Viewing the volatility and range of the share price over the same period, it is clear that it has not all been plain sailing. Nonetheless, there is no doubt that Empyrean now has significant potential in the Sugarloaf carbonate reservoirs. The option for Empyrean to participate in the 16 well deal at Sugarloaf to appraise (and develop) the Austin chalk reserves, will be one of the driving forces behind the share price for the rest of 2008 and 2009. The production thus far has come from the uppermost zone of three potentially productive zones. The two deeper zones are likely to be tested shortly, and have the potential to double or even triple the recoverable reserves of the Sugarloaf Project discovery. Empyrean suddenly finds itself in a very enviable position. It still has £1.4 million in the bank, with cash flow from Margarita and several commercial discoveries at Sugarloaf. Glantal and Eagle Oil Pool still sit in the portfolio, but at last investors can look past those projects and focus on the rapidly evolving portfolio in Texas which looks set to keep investors on their toes for many months to come.
 
Sugarloaf Block A Update

RNS Number:4129T
Empyrean Energy PLC
30 April 2008



Empyrean Energy PLC
("Empyrean" or the "Company"; Ticker: (EME))

Sugarloaf Block A, Texas USA
----------------------------

- TCEI JV Block A-1 well continues to flow at commercial rates direct to
sales line.

Empyrean, the AIM listed energy company with exploration and production assets
in Germany and USA today announces the following initial test results from its
TCEI JV Block A-1well on Block A at the Sugarloaf Project in Texas:

Since the last report the TCEI JV Block A-1 well was shut in for a pressure
build up test and then subsequently opened to flow. As of the latest report the
well was flowing to sales at approximately 0.50 mmcfgpd (million cubic feet gas
per day) with approximately 150 bcpd (barrels of condensate per day) and 20 bwpd
(barrels of water per day) with a FTP (Flow Tubing Pressure) of around 660 psi.

On the present day prices for condensate and gas whilst converting the
condensate to a gas equivalent, the most recent recorded equivalent gas flow
rate approximates (using a 10:1 conversion) 2.0 mmcfepd (million cubic feet gas
equivalent per day). The well has had an average equivalent flow rate above 2.0
mmcfepd for the past week, peaking at approximately 2.4 mmcfepd.

Commenting today, Empyrean Director - Tom Kelly said "This well is flowing
nicely to sales. Importantly this well is flowing from about 900 feet of
perforations from a total 2700 feet of horizontal well. When the well is
stimulated it is likely the operator will add perforations as well as performing
multiple fracture stimulations with the aim of enhancing the flow rates".

A further announcement will be made when the timing of the planned fracture
stimulation on this well is confirmed by the operator.

The information contained in this announcement was completed and reviewed by the
Technical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who has
over 40 years experience as a petroleum geologist.
 
Eureka is pleased to announce that it has agreed the placement of
10,500,000 shares at an issue price of 17 cents per share to raise
$1,785,000, before the costs of the issue.
Funds raised from this issue are intended to be applied to the
Sugarloaf gas and condensate project in Texas, USA, and in
particular, to Eureka’s 12.5% share of drilling activities for the
remainder of 2008 and early 2009.
 
KENNEDY-1H OPERATIONAL UPDATE

Adelphi Energy announces that it has been advised by Texas Crude Energy
International (“TCEI”), Operator of the Sugarloaf AMI that preparations for fracture operations have commenced on the Kennedy-1H well.
The well has been completed with a 4 ½” cemented liner with an effective Total Depth (“TD”) of 16,530ft. The liner has been previously cleaned out and by 0600 hrs on 6th May 2008 four intervals in the deepest quarter of the hole had been perforated using coiled tubing and a tractor assembly.
The well is now shut in and being pressure monitored. The fracture stimulation is scheduled to commence on Friday 9th May, depending on equipment availability.

Recent analysis of the Kennedy-1H well suggests that the horizontal section of the well may be completed in a deeper chalk zone than the zone that is already producing in an adjacent lease block (Block A). The deeper chalk zone in which the well appears to be located has demonstrated gas charge in offset wells and this well, but has not as yet been produced in a sustained manner. If the well is in the deeper zone then positive results from the fracture stimulation of this zone may provide significant additional potential recoverable reserves. If this zone is not productive then it does not affect the productive potential of the zone already producing gas and condensate in the adjacent block (Block A).

We are also cautious about the potential productivity that will be achieved from this well because it did not appear to exhibit indications of natural fractures when it was drilled, and recent technical work has indicated improvements can be applied to future completion design. However, information learned from the Kennedy operation will contribute significantly to the appraisal of the area and can be incorporated into future wells.

Regardless of the specific result from the flow test result from Kennedy-1H, further drilling to evaluate the Sugarloaf acreage under lease (approx. 22,000 acres) is expected to commence in the third quarter of 2008.



worth thinking about! the well is in the lower zones!
 
Todays announcement has alot of info in it, if you read it very carefully and think about what it is they're saying. Still the usual "if, but" feel to it, but there is certainly a positive underlying feeling to the announcement.

More activity in 3rd quarter...
 
AgentM please intepret. Did they drill too low and missed the area they were trying to drill? It doesn't sound too positive that this hole will do anything and their directing our attention to the next hole. Please help
 
Sounds like the operator has eventually concluded that the well is not in the zone.

added to this they completed the well by cementing the casing.

so what is now known is that kunde 1 in Zone 1 had shows, then they fraced it, the well has flowed ever since and proved the matrix porosity factor in the chalks allows the formation to produce.

kennedy is about to be fraced and a great deal will be learned over the prospectivity of the chalks with fracture stimulation.
 
Agent M

"The deeper chalk zone in which the well appears to be located has demonstrated gas charge in offset wells and this well, but has not as yet been produced in a sustained manner. If the well is in the deeper zone then positive results from the fracture stimulation of this zone may provide significant additional potential recoverable reserves.

Is the above what you are pointing towards the exciting part of the announcment??

Thanks
 
my view on these chalks is that they are certainly unique.

1/ the condensate is about 58% gravity, quite unique

2/ the matrix porosity is very high, its been quoted as high as 16%. it would be fair to say that ordinarily chalks wells dont usually have anyhing like that type of matrix porsity. and usually the chalks wells flow on the strength of natural fractures which greatly improve the connectivity of the well to the rock.. Its been demonstrated in kunde 1 that the matrix porosity was sufficient there to allow the frac on the vertical well to flow and the well has been on production for a good year or more.

3/ the well although not located perhaps in the upper zone, will now frac the lower 1/4 of the well. and if the chalks behave such as they do in the kunde 1 well then its extremely correct to say

"If the well is in the deeper zone then positive results from the fracture stimulation of this zone may provide significant additional potential recoverable reserves"

the kennedy well had a number of zones which encountered elevated gas readings, these zones may be just the spot to frac the well and gauge the chalks.. fracing chalks is not a common practice imho, an acid treatment can also be a great way to stimulate and open up the chalks. but the frac at kunde 1 has absolutely changed things around.. firstly they diagnosed it, then looked into the region and saw it was picked up in a broad area, hence the massive lease buy up..

i think the zone 2 region has always been considered as prospective,conocophillips with kunde 2 is about to test that region in the vertical, and here we are in the thick of it and about to frac it in a horizontal.

there is a long way to go on this well, and i look forward to this initial frac, and my expectation is that the formation should perform as kunde 1 has, then its very exciting news..
 
Empyrean, the AIM listed oil and gas explorer and producer with assets in
Germany and USA today announces the following:

Kennedy #1 Well

Empyrean is pleased to announce that it has been advised by Texas Crude Energy International ("TCEI"), the operator of Block B on the Sugarkane Gas and Condensate Field, that preparations for fracture operations have commenced on the Kennedy #1 well.

The well has been completed with a 4 1/2" cemented liner with an effective total depth of 16,530 feet. The liner has been previously cleaned out and by 06:00 hrs on 6th May 2008 (US CST) four intervals in the deepest quarter of the hole had been perforated using coiled tubing and a tractor assembly.

The well has now been shut in with down hole gauges for pressure monitoring
until final preparations start later this week for the fracture operations. The
fracture stimulation is presently scheduled to commence on Friday 9th May,
depending on equipment availability.

Vertical wells drilled so far at Sugarloaf (Sugarloaf-1 well & TCEI Block A-2
well) have intersected three broad potential pay zones whilst drilling. These
can be broadly categorised into "upper", "middle" and "lower" potential pay
zones. The 80 feet thick upper pay zone has now been proven productive with the TCEI Block A-1 and A-3 wells. The 120 feet thick middle potential pay zone has not yet been flow tested. The bottom part of this zone is expected to be tested by the TCEI Block A-2 vertical well. The 50 feet thick lower potential pay zone has been proven to contain gas and condensate (during initial testing at Sugarloaf-1) but has not yet proven commercial.

Recent analysis of the Kennedy #1 well suggests that the horizontal portion of the well predominantly drilled a deeper chalk zone (i.e. the middle potential
pay zone) in addition to the upper zone that is producing gas and condensate
from the TCEI Block A-1 and A-3 wells. The perforations are expected to test the top part of the middle potential pay zone. A successful test of this middle
potential pay zone, either from the Kennedy #1 well or the TCEI Block A-2
vertical well, may provide significant additional potential recoverable
reserves. If the middle potential pay zone is not productive it does not affect
the potential of the upper zone that is already producing from the TCEI Block
A-1 and A-3 wells.
Empyrean has a 7.5% working interest in the TCEI Block A-1, A-2 and A-3 wells.

In addition it has a 6% working interest in the Sugarloaf-1 well and a 18%
working interest in the Kennedy #1 well on Block B.

Further updates will be provided following developments.

The information contained in this announcement was completed and reviewed by the Technical Director of Empyrean Energy Plc, Mr Frank Brophy BSc (Hons) who has over 40 years experience as a petroleum geologist.
 
Not sure what to make of the latest announcement with the drilling of the zones.
Could become a real boon for the jvp if the zone is productive but was this an intentional target or an of track drill.
ADI seemed too wording there statement very carefully and not giving there thoughts on the zone away but if they were not confident would they be wasting there time fraccing K1 and wasting alot of money ?
 
the unknown unknowns hey! drilled low. thats the long and the short of it.

the activity in the chalks that TCEI got there is plenty, its not like theres nil to work with..

options are plenty...... and if you look at what the wells have no had done to them in kunde 3 and baker, imho there is plenty of scope for improvement. they appear to be doing what you expect, studying the reservour..

not overly concerned about the situation, the kennedy well is absolutely not looking at a P&A, imho its being viewed in a completely different light over in texas to how the jvp's are painting it over here, only tom at eme seems to be on the pulse imho..

conservative and cautious is a good approach, as it would be out of line for adi to pump this play right now and then be faced with some severe flack if the outcome was less than expected, so setting a very low expectation is very responsible, but i would be equally cautious in not underestimating anything to do with kennedy at this point in time :)

all imho and dyor
 
Yes cautious in the wording is always a wise thing too.
The thing that worries me tho is why wait untill 3 days before fraccing before telling everyone the are off target ?
The have had this well drilled for 6 months now surely they would have known before now.
That being said doesnt mean Im writing K1 off just got me wondering why they have only just told us.
Still on a good thing imo.
 
Lucky_Country said:
Yes cautious in the wording is always a wise thing too.
The thing that worries me tho is why wait untill 3 days before fraccing before telling everyone the are off target ?
The have had this well drilled for 6 months now surely they would have known before now.
That being said doesnt mean Im writing K1 off just got me wondering why they have only just told us.
Still on a good thing imo.
Click to expand...



since the well was completed there was conjecture i believe, i think the last weeks is the first time since completion that any coil tubing unit could get on the well and do some investigations..

my view is that the plans afoot on kennedy are designed to get some return of the shows. and imho there is every chance the well will be capable of producing regardless of the less than favourable completion of the well. many things that can be done to stimulate these wells have not been done as yet, and i am certain the reasons for the frac and what they will learn will have far reaching impacts on the jvps
 
Well fracing over Friday and the weekend should be some kind of results out by monday so I wonder what the jvp will have too say.
Get the feeling that EME will be the first too announce something that always seems to be the way.
If K1 has a positive result then that would really bode well for for the rest of the project.
Still keep wondering when will we hear something about NT just have a good feeling that the results there were above expectations.
 
Lucky_Country, I heard a couple weeks ago that NT was resolved and we get to walk away, cost free. No upside, but no downside either.
 

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