Empire Oil & Gas provides update on Red Gully North-1 project in Australia

Perth Basin domestic gas producer Empire Oil & Gas has provided the following update on the Red Gully North-1 (RGN-1) project.

• Enerdrill Rig-1 mobilised to Red Gully North-1 site and currently rigging up

• Other equipment is being mobilised to site and operations are expected to commence 12-13 November

• Remedial cementing workover and test is planned to take approximately 30 days

• Project cost unchanged

Planning and Approvals

Enerdrill Rig-1, the rig contracted by Empire to carry out the remedial cementing workover, is now at the RGN-1 location and is being rigged up in readiness for the workover operations to begin. This is the same rig used for the well completion in March 2016.

The long lead equipment for the remedial cementing and re-completion of RGN-1 has also been received and is being transferred to the wellsite.

All technical, safety and environmental approvals have been received from the Department of Mines and Petroleum.

Workover Cost and Economics

As previously advised to the ASX on 14 October 2016, final detailed engineering and operational planning is now complete. Based on the results of the diagnostic testing the project cost for the workover and well test is estimated to be A$2.9 million including A$0.45 million spent to date on long lead equipment, diagnostic testing and planning. The project is economically positive given the contingent reserve of 7.5 PJ, potential high condensate yields and the requirement of only a short, low cost 4 km pipeline tie back to the Red Gully Processing Facility.

Empire CEO Ken Aitken said: “The project planning approvals and equipment mobilisation have progressed efficiently. Empire is now looking forward to a successful remedial cementing workover and test on RGN-1 so that, upon success, we can commercialise the gas volumes in the Red Gully North well”.

A weekly update on the workover progress will be provided throughout the operation.