Empyrean Energy Plc is pleased to advise that Texas Crude Energy Inc ("TCEI") has been successful in its efforts to farm out Block B in the Sugarloaf Project, part of the Sugarkane gas and condensate field, in Texas, USA. TCEI have signed a farm out agreement with Hilcorp Energy Company ("Hilcorp"), estimated to be the 4th largest private E&P company in the USA, and field activities are expected to commence promptly. A brief description of Hilcorp is
included at the end of this announcement.
The key elements of this farmout for Empyrean are as follows:-
-The farm-in by an established and material company such as Hilcorp to the Sugarkane field is a significant endorsement of the multi-Tcfe potential of this gas and condensate asset. Hilcorp has considerable operating experience in onshore USA.
- Empyrean will be free-carried for the drilling, completion and tie in of up to 3 new horizontal wells and the stimulation of the three existing Sugarloaf horizontal wells; Kennedy-1H, Kowalik-1H and Weston-1H. This will establish a total of 6 wells on production across Block B. Under the terms of the farm-out this work program has a series of deadlines over the next 20 months. No interest will be earned unless the agreed work programs are completed.
- Hilcorp will earn an interest in Block B incrementally as each farm-in activity is completed up to a maximum of 50% of Empyrean's interest in Block B.