• C-5H well has been successfully drilled and cased to a Total Depth of 5,310 metres (17,421 feet)
• 100% of the 3,310 metre (10,860 foot) horizontal section was placed within the target Velkerri-B shale, with strong gas shows throughout
• The C-5H well was completed with 5 ½” casing to Total Depth prior to suspension and rig release on 27 December 2024
• The well was executed in 41 days from spud to rig release
• Fracture stimulation operations and production testing of C-5H scheduled to commence in early Q2 2025 after the NT wet season
• Empire has executed facility documentation with Macquarie Bank for the R&D Facility ($30 million) and Performance Bond Facility ($5 million)
• Current cash at bank is $25.7 million with an additional $28.8 million available and undrawn under the Macquarie facility

Empire Energy, a Sydney based Australian oil and gas company holding 100%-owned and operated assets with unconventional targets in the Northern Territory Beetaloo Sub-basin and central trough of the McArthur Basin, today announced that the C-5H well, targeting the Velkerri-B shale formation, reached a total length of 5,310 metres (17,421 feet) on 20 December 2024. The well was drilled in 41 days from spud to rig release, with the 3,310 metre (10,860 feet) horizontal section drilled in 8 days. The well was drilled slightly faster than the risked pre-drill schedule. 

100% of the horizontal section was drilled within the Velkerri B Shale and, as anticipated, strong gas shows were observed throughout. The horizontal section required minimal steering to remain within target.

C-5H was drilled from the same well pad as the Carpentaria-2H (“C-2H”) and Carpentaria-3H (“C-3H”) wells, parallel to C-2H. These three wells will form the initial part of the Carpentaria Pilot Project (“CPP”). C-2H and C-3H were drilled with smaller hole diameters and casing than C-5H. The C-5H well was successfully completed with 5 ½” casing to optimise future hydraulic stimulation activity to maximise gas production. Following casing installation, the horizontal section available for hydraulic stimulation is 3,250 metres (10,662 feet). The horizontal section in C-5H is by far the longest drilled in the Beetaloo by Empire to date and marks a key step towards “first gas” from the CPP. 

The Ensign Rig 965 has been released by Empire and is being demobilised from EP187. 

The forecast total cost for the drilling of C-5H is ~$19.7 million which includes drilling, casing, cementing and suspending the well in preparation for fracture stimulation. A large portion of this cost is transport and logistics including mobilisation and demobilization for the single-well campaign. Such costs will materially decrease in future drilling campaigns due to the spread of cost over multiple wells. 

Empire is confident that further drilling and well completion optimisation can be achieved to materially reduce drilling time and costs in future drilling programs. This is consistent with the development of the Queensland coal seam methane industry, in which Empire’s operating team at InGauge Energy played a leading role, where drilling and completion costs have reduced by ~80% over time. 

Carpentaria-5H Fracture Stimulation 

Empire has decided to commence the fracture stimulation of C-5H immediately after the NT wet season. Commencing the stimulation in January, in the height of the wet season, would have exposed Empire’s shareholders to weather-related financial risks that the Board deemed unacceptable. 

The fracture stimulation of C-5H is now expected to commence in April 2025. Following stimulation, C5H will be placed on an extended production test, with IP(30) flow rates expected in Q2 2025. 

The ~3 month delay in commencing the fracture stimulation program is not expected to result in a delay to the commencement of gas sales from the CPP.

Execution of Facility Documentation with Macquarie Bank

Further to Empire’s ASX release dated 27 November 2024, Empire has executed facility documentation with Macquarie Bank for the amendment, extension and upsizing of its R&D Facility and Performance Bond Facility. Following completion of the R&D Facility and Performance Bond Facility, Empire has increased its available liquidity by a further ~$28.2 million, significantly reducing potential equity dilution of shareholders’ interests in the Company.

KeyFacts Energy: Empire Energy Australia country profile