Empire needs a win with a planned well test to help increase the confidence in its Perth Basin assets from potential partners interested in drilling the proposed but unfunded Lockyer Deep-1 well, which is looking for a Waitsia-style gas target in the Kinga Formation plus a small oil play, and the Raven-1 well.

This morning Empire also announced it has finalised interpretation of the Black Swan airborne geophysical survey, which not only confirmed its existing lead and prospects, but new structural highs and leads have been identified across its permits, setting up what could be the next generation of high value targets.

Empire now plans to acquire infill 2D seismic to mature identified leads to prospect status for future drilling.

The wide-ranging survey, shot over all of Empire's Perth Basin permits by CGG, was designed to improve the sub-surface imaging over the large relatively unexplored areas of Empire's vast holdings.

Empire CEO Ken Aitken said the Black Swan survey results are "very encouraging" as they give the first comprehensive view of the overall structural configuration of its acreage.

"In particular, the prospectivity of some of the identified leads on these structurally high trends, has been significantly increased by the recent gas discovery at Red Gully North-1," he said.

Large structural leads were interpreted in a fairway in northern EP 389, to the north and west of Empire's Red Gully production facility, outside the existing 3D coverage area.

While the company is keen to get after them in the wake of what it hopes will be a successful Red Gully North-1 test, Empire said approvals for the infill seismic program could take 18 months.

Drilling would seem unlikely before 2018, however discoveries could be tied back to the existing production facilities.

There is also a large north-south trending structural high within the central area of EP 432, which is assessed as having large potential Permian gas plays in the Irwin River coal measures; there is a new high across EP430 and EP 454 on the western side of the Yarra Yarra Terrace; and across EP 368 and 426 there are major structural trends have been clearly defined, and the prospectivity of the deeper Dandaragan Trough in the west will be further evaluated along with the planned Lockyer Deep-1 well.

Other leases, such as EP 416 and EP 480, are being pursued by partner Pilot Energy, which is earning into the blocks.

Pilot said this morning that the Black Swan data supports the prospectivity of the permits.

The available 2D seismic data reveals the presence of an up to 200sq.km structural prospect, which could host up to 600Bcf.

Prior to this morning's announcement, Hartleys analyst Simon Andrew described Red Gully North-1's result as "a promising start" to both Empire's ambition to increase the size of its Red Gully production facility and 2016.

The well, drilled in December, found 53m of net gas pay within the primary target zone between 3725m and 4074m, the Jurassic Cattamara Coal Measures, with the amount of gas pay exceeding pre-drill expectations, however porosity was initially interpreted as being lower than expected. Interpreted average porosity of the C and D sands was 9% and 10% respectively.

There was also deeper, thin pay in the well.

Looking back at older tight wells in the area, including Gingin-1, Gingin West-1 and Red Gully-1, all of which have previously produced, assuaged some of Empire's fears that the well could not flow, and a production test is scheduled for the start of the second quarter.

The well test will confirm gas deliverability potential and allow reserves to be booked.

The reserve volume and economics will then determine if Empire expands the Red Gully gas plant or simply uses the reserves to extend the life of the current plant.

Prior to the testing program, Empire expect to complete a volumetric assessment of the Red Gully North discovery.

Hartleys' Andrew is also keen to see the December quarterly report, which should include a sharp increase in operating cash flow associated with Phase 2 of the Alcoa Gas Sales Agreement.

"We maintain our speculative buy recommendation on Empire with a 12-month target price of 63cps (from 75cps). We continue to like that Empire has production and cash flow and a large acreage positon in a known petroleum basin," he said.

The lowering of the valuation is essentially due to lower condensate pricing and value of other exploration ground.

He said Red Gully alone was valued at 39cps, with Red Gully North worth 9cps and the exploration upside 18cps.

He said the company would be more attractive if it started to reduce debt.

The junior had around $7 million of debt at the end of September.

Empire shares last traded at $0.36.