Empire powers ahead with NT gas play

Australian oil and gas company Empire Energy Group, based in Sydney, has closed the book on a busy December quarter that it is considering the most active in the firm’s history. The workstream was at the head of its drilling completion of the Carpentaria-3H gas well in the Northern Territory’s world-renowned Beetaloo sub-basin and included a record-breaking 2632m horizontal section which was delivered on time and significantly under budget.

Importantly, Empire says more than 90 percent of Carpentaria-3H’s horizontal interval has penetrated the hydrocarbon-rich Velkerri-B shale formation where strong gas shows have been observed. The record-breaking horizontal section logged in Carpentaria-3H’s drilling exceeds the length of the company’s previous efforts with its Carpentaria-2H well by 150m.

The company believes the program could also be the most extensive in the history of the Beetaloo Basin and the operation’s total expenditure of $17.3 million is approximately $3.6 million below its initial projections. Empire has since advanced the well to a program of hydraulic stimulation, or “fracking,” and has achieved notable results across each of the drill’s 40 planned stages.

Notably, Empire says 35 of the 40 phases activated in its fracking of Carpentaria-3H have been carried out within the zone’s Velkerri-B shale target – an area the Northern Territory government believes holds as much as 500 trillion cubic feet of gas can host

Fracturing is often performed on horizontal, gas-bearing shale wells such as Carpentaria-3H and allows companies to optimize the placement of a well’s fractures in order to maximize gas production rates. The fractures are typically positioned along a driller’s target zone and are essentially a site where an explorer will look to pierce the ground’s geology and release the zone’s gas resources. The number of stages is dependent on an asset’s depth, with deeper boreholes – such as the more than 2600 m Carpentaria-3H – usually accommodating more intervals.

To maximize the volume of hydrocarbons extracted from a gas well, companies typically fracture a well by perforating the reservoir with a chemical mixture known as fracking fluid. The formulation is pumped into the borehole at high pressure and can be obtained from a range of ingredients. According to Empire, it used a host of hydraulic fluids in the fracturing of Carpentaria-3H’s 40 stages, including crosslinking, smooth water and a hybrid mixture of both formulations.

The company previously used smooth water to great effect in its nearby Carpentaria-2H gas well and says the material can deliver economic gas recovery rates along with the reduced inclusion of chemical additives. The company has since begun flowback activities at the well and says 17 percent of its fracturing fluids have been recovered. The work is key to moving Empire closer to production.

The Empire team hit the ground running in early 2023. Our main focus is to move into pilot production. It involves multiple work streams including Front End Engineering and Design, pipeline transportation and gas sales negotiations, indigenous consents and regulatory approvals. We look forward to further updating shareholders as this critical work continues.

The company also targeted and intersected the Velkerri Formation shales with its Carpentaria-4V well over the December period. In August last year, the company declared that its assets in the Beetaloo held a 2C contingent resource of 554 billion cubic feet of gas and 3.5 million barrels of liquid and after the quarter’s activities, management says it expects substantial growth.

Empire also padded its coffers to $7.8 million over the period after securing a research and development tax offset and claiming another $1.4 million in cash courtesy of the Federal Government’s Beetaloo Cooperative Drilling Program.

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