Empire told the ASX yesterday that in addition to participating in the Parrot Hill-2 well being drilled in the EP 435 Permit, Black Fire had farmed into the company’s Lake MacLeod-1 well due to be drilled in the second half of the year in EP 439.
Black Fire will contribute 15% to the Lake MacLeod-1 well costs, estimated at $1.6 million, to earn a 7.5% interest in EP 439 and the adjoining Application for Exploration Permit 6/06-7.
Black Fire is an additional farminee to Jurassica Oil & Gas, which has agreed to contribute $960,000 towards the costs of drilling Lake MacLeod-1.
Empire said the Lake MacLeod Prospect was a large oil prospect with estimated potential recoverable oil reserves in the order of 150 million barrels, if hydrocarbons were present and the structure was filled to its spill point.
The Lake MacLeod Structure was interpreted from seismic data as an anticlinal feature where Devonian-aged carbonate sediments draped over an older-aged fault block. This exhibited all the necessary prerequisites of structural timing for oil generation and entrapment.
Good oil-prone source rocks were present in organic-rich marine shales in the lower part of the Devonian-aged Gneudna Formation.
Empire said it intended using the DCA Rig 7, currently drilling the Parrot Hill-2 well with Black Fire, which was contributing 20% of the well costs to earn a 10% interest in EP 435, for Lake MacLeod-1.
Last month Black Fire Energy launched a $3.5 million initial public offering to fund its share of drilling costs in three onshore permits operated by Empire.
In its IPO prospectus, Black Fire said it would earn a 10% stake in both Carnarvon Basin permit EP 435 and Perth Basin permit EP 426 by contributing to the Parrot Hill-2 and Moriary-1 wells. Lake McLeod-1 is the third well.
Empire Oil and Gas has been the main stayer in the onshore Carnarvon over the past decade, persevering in the face of early disappointments to commercialise the original Rough Range oil discovery and trying to find a key to the frustrating run of dry holes in the surrounding area.
Meanwhile, Empire said farminee Allied Oil & Gas has provided $500,000 to cover the costs of recording the 50 square kilometre 2D Wellesley seismic survey in Perth Basin permit EP 416.
Under the farmin, Allied will be assigned a 20% interest in EP 416 and now has the option to earn an additional 60% interest in the permit by paying the $5 million drilling costs of the Wellesley-1 well.
Empire expects to have State Government approval for the survey in the next month.
