Empyrean Energy has engaged CNOOC EnerTech to manage critical pre-drilling permitting and logistical requirements related to Empyrean's planned drilling operations at the Jade well in Block 29/11, offshore China.
CNOOC EnerTech is a subsidiary of China National Offshore Oil Company ("CNOOC") and holds in excess of 90% of the deepwater technical service market in China, with more than 10 years of experience in areas such as supervision, project design, devices, and tools service, fishing, coring, and core analysis.
According to Empyrean, which operates the offshore block with a 100% stake, the CNOOC EnerTech team has started the process for securing several drilling permits and has started engagement with China Oilfield Services Limited drilling group for verification of wellhead and casing specifications and other key areas.
Empyrean said Wednesday it had held several discussions and has remotely held meetings with CNOOC EnerTech in order to secure its services to assist with the pre-drill logistics and management of the drilling operations. These discussions resulted in defining a broad mandate for the engagement with the following three teams being formed to work in a phased manner to coordinate and manage the drilling operations, the company said.
The Onshore team will be responsible for finalizing the drilling and geological program for the well in line with CNOOC's requirements. In addition, this team will be responsible for applying for and securing all necessary permits ahead of drilling operations. Finally, this team will develop safety and emergency response procedures and documentation. The Onshore team has already started systematic work for securing several drilling permits and has startedengagement with COSL drilling group for verification of wellhead and casing specifications. CNOOC EnerTech team is also preparing a comprehensive Emergency Response Plan ("ERP") for conducting safe drilling operations, Empyrean.
While Empyrean is the operator of Block 29/11 in China and with 100% working interest during the exploration phase, in the event of a commercial discovery, its partner, CNOOC, has a back in right to a 51% participating interest in the development and production phase.
The offshore team will join the onshore team 15 days prior to rig mobilization to the drilling location, and will be involved in managing day-to-day drilling operations on the rig.
In the event there is an oil pay in the well (success-case), a Well Test team will join the Offshore team in the rig, and will be responsible for the comprehensive well testing operations.
Empyrean CEO, Tom Kelly, said:"Engagement of CNOOC EnerTech marks another important milestone towards conducting a safe and successful drilling operation. Empyrean is delighted to have the experience and capability of the CNOOC EnerTech team onboard and working with Empyrean to drill the Jade prospect. We are now counting down towards drilling of the company's first exciting exploration well in China. We look forward to providing shareholders with further updates in the short term."
Back in September Empyrean said it was working to sign an integrated drilling contract to drill the Jade exploration well, with the drilling expected to start in December.
Empyrean said at the time COSL had confirmed drilling rig availability, "and all technical, commercial, and contractual terms have been agreed upon." The well will, per Empyrean, target "a world-class conventional oil target." It did not say which rig would be used for the project.
According to Empyrean's statement from September, Gaffney Cline & Associates ("GCA") assigned a Geological Chance of Success ("GCoS") of 32% for the Jade prospect. Following the GCA, Empyrean carried out further studies which have led the company to estimate the GCoS to 41%.
The Jade Prospect is the first of the three identified prospects within Block 29/11, which also contains the Topaz and Pearl prospects. The combined audited mean in place potential of all three prospects is 884 MMbbl and a P10 in place upside of 1,588 MMbbl.
Empyrean said that any oil discovered is expected to be light oil in the 38-41 API range, similar to nearby discoveries.
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