Empyrean Energy PLC (AIM:EME, FRA:E1E)’s 2016 entry into China gave the AIM-quoted oil and gas firm ‘new colour’, according to chief executive Gaz Bisht, who describes the Jade exploration project as transformational to the company.
Bisht in a Proactive interview said the company is working rigorously to advance its plans for Jade towards a pivotal and exciting drill programme.
Presently the priority is to land a suitable rig and permitting for the Chinese exploration programme – eight separate permits will be required before drilling can commence.
The prospect, estimated to host some 225mln barrels of oil (with an upside case pitched at 395mln), is a game-changer not only in terms of the scale of opportunity but also because of the company’s role in the project.
The asset was awarded to Empyrean in 2016 with the company acting as operator of the large offshore block.
It means extra responsibility for the company that had previously seen success as a minority, non-operating partner in joint ventures. Bisht highlighted that as the operator Empyrean makes its own destiny.
Scope and scale is significant for Empyrean’s Chinese proposition, and, it is relevant to note that Empyrean is just one operator in a region that’s broadly seen as attractive for hydrocarbon exploration – not least given that China is a massive net importer of fuel.
Bisht described the geology of the region as ‘unique and world class’.
“We are surrounded by various existing oil and gas discoveries and oil fields, to the tune of 1.3 billion barrels,” the Empyrean boss said.
Moreover, he noted that the company’s two most advanced prospects Jade and Topaz have seen estimates by consultant Gaffney Cline in a similar range as the nearby projects.
“We are not away from what’s happening in the neighbourhood,” he said.
“So it’s quite attractive and they are transformational [prospects] from any yard stick not just for Empyrean which is relatively small-cap, but even a midsize company. When we are talking about this size prospect, this is transformational.”
Bisht highlighted that the project’s estimated chance of success above 30%, though subsequent work has seen internal company estimates put it as high as 40%.
The Empyrean chief exec noted the challenge of Covid-related travel restrictions, making the contracting process in China more complicated as it has to be done remotely.
It’s intended that the well will spud before Christmas, which means investors will in the coming months track Empyrean’s progress closely in the build-up to what may prove to be a catalyst rich phase for the London listed exploration stock.