Empire Energy Group Ltd: Schlumberger Picked to Lead Carpentaria-1 Drilling

Empire Energy Group Limited (EEG.ASX) is a junior oil and gas producer and explorer with onshore NT and US oil & gas assets. EEG holds the largest acreage position (>14.5m acres) in the highly prospective, potentially global-scale NT McArthur-Beetaloo basins. The province is fast developing as a gas-rich (and potentially liquids-rich) strategic bolster for east coast Australia’s future energy needs and Darwin’s expanding LNG export terminals, amid strong policy support from both the Northern Territory (NT) and Federal governments. The Beetaloo Sub-basin alone is considered to contain recoverable unconventional shale dry gas volumes of over 100 Tcf, with liquids upside. EEG also owns conventional gas/oil assets in the US Appalachia, 80%-hedged at
2020 floor prices of US$2.50/mcf. EEG’s 2D seismic results aided a recent 22% uplift of its NT P50 prospective resources to 13.5 Tcf gas (up from 11 Tcf). Crystallising EEG’s longer-term potential rests on successful drilling and production testing. EEG aims to begin a ~45-day vertical drill program to ~2900m, with its COVID-19 safe-work plan cleared by NT authorities. We believe the A$7-8m drill program to test the Velkerri/Kyalla Shales can be comfortably funded from current cash. Global oilfields service provider, Schlumberger Land Rigs, has been contracted to drill, case & suspend the Carpentaria-1 vertical well, spudding mid-September; results due in November.