Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) has drilled and cased the Carpentaria 5H (C-5H) well at the Carpentaria Pilot Project in the Beetaloo Basin of Australia’s Northern Territory, reaching a total depth of 5,310 metres.
The C-5H well was completed with a 5-and-a-half-inch casing to total depth and the entire 3,310-metre horizontal section penetrated the target Velkerri-B shale, with strong gas shows throughout.
Empire Energy has also activated a new credit facility with Macquarie Bank, gaining access to a research and development facility of up to $30 million and a performance bond facility of up to $5 million.
Operational milestone
“The safe and successful drilling, casing and cementing of C-5H represents a major operational milestone for Empire Energy and the broader Beetaloo Basin,” Empire Energy managing director Alex Underwood said.
“C-5H contains the longest horizontal drilled and cased section of any well drilled in the basin to date.
“The horizontal section was completed fully within the target Middle Velkerri-B shale zone, setting the company up for a successful stimulation program.”
To scale schematic of C-5H well alongside C-2H and C-3H.
EEG intends to begin fracture stimulation operations and production testing for C-5H early in the second quarter of 2025 after the Northern Territory wet season has passed, having executed the well in just 41 days from spud to rig release.
Following stimulation, C5H will be placed on an extended production test, with IP(30) flow rates expected in the second quarter of 2025.
“The decision we have made to delay the C-5H fracture stimulation from January 2025 to April 2025 has been taken with the best interests of our shareholders in mind, as the financial risk of weather-related issues would have been substantial,” Underwood said.
“The change in program timing is not expected to delay delivery of first gas in 2025.”
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).
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.
New credit facility
Empire has executed facility documentation with Macquarie Bank Limited for the amendment, extension and upsizing of its R&D Facility and Performance Bond Facility.
Following completion of this facility, Empire has increased its available liquidity by a further ~$28.2 million, significantly reducing potential equity dilution of shareholders’ interests in the company.
“The documentation of the Macquarie R&D and Performance Bond Facilities enhances the company’s liquidity without any dilution of shareholders’ interests,” Underwood added.
“We look forward to completing documentation of the Midstream Infrastructure Facility in Q1 2025.”
The company is well funded with $25.7 million in cash, and a further $28.8 million available to be drawn under the Macquarie facility.