Empire gets environmental thumbs up to drill NT gas wells

Empire Energy Group is a step closer to selling gas to the Northern Territory Government after picking up environmental approval to kick off a nine-well gas drilling program at its rapidly advancing Carpentaria pilot project in the NT.

In preparation for drilling its next well, Carpentaria-5H, which is expected to start imminently, an Ensign No. 965 rig is now onsite and ready to spud with Haliburton contracted to do the fracture stimulation.

Carpentaria-5H is set to be Empire’s biggest horizontal shale well yet targeting a massive 3,000-metre horizontal section with around 60 fracture stimulation stages which will begin after the rig wraps up its work. Unlike the company’s previous wells, Carpentaria-5H will be completed with a 5 ½ casing allowing for sufficient horsepower in the stimulation phase to significantly increase gas productivity.

The newly approved Environmental Management Plan (EMP) has outlined a nine-well drilling program it total from four well pads to be finished off with hydraulic fracture stimulation. To handle the expected gas, Empire will also be installing a gas plant and a water handling station on site together with ancillary gas and water flowlines.

The company has also received the crucial production licence for up to 12 wells which will allow for the gas extraction before moving through the gas plant and onwards to the Territory Government controlled McArthur River Pipeline for sale to the Northern Territory government. Production approval also comes with an operational and maintenance nod for the gas wells, including its existing Carpentaria-2H and Carpentaria 3H production wells.

The project, 1000kms southeast of Darwin, sits within the massive 33,000 square kilometre Beetaloo Gas Basin. The Beetaloo is something of a revelation in oil and gas circles, with some estimates placings its gas endowment as high as 500 trillion cubic feet (Tcf) of gas.

Empire Energy managing director Alex Underwood said: "The Empire team continues to progress towards pilot production from the Beetaloo Basin, which will provide much needed gas supply for the people of the Northern Territory under the gas sales agreement Empire signed with the NT Government earlier this year. This regulatory approval aligns with the NT Government’s support for Empire and the development of the broader Beetaloo Basin, which is expected to create thousands of jobs, put downward pressure on energy prices across the NT and Eastern Australia, and has the potential to drive a resurgence of manufacturing in the Northern Territory.”

In July, Empire signed a long-term gas sale agreement with the Northern Territory Government for up to 25 terajoules (TJ) of gas per day for 10 years with an option to increase sales by an extra 10TJ per day if Empire’s daily production rates reach more than 100TJ per day.

Now the approval of the EMP is firmly under its belt, the last big step for the company is to nail down regulatory clearance to sell its gas under the “Beneficial Use of Test Gas” rules set out in the Northern Territory Petroleum Act.

A critical pre-condition of final clearance is the stakeholder consultation process with the local community. Empire is working in tandem with the Northern Land Council to organise a meeting for the traditional owners to have their say and ultimately give the company a green light.

With $39 million in the bank as at the end of the September quarter, a long-term gas sale agreement already in place and all environmental conditions met, Empire is extremely close to fulfilling an ambitious plan to become one of the first commercial producers in the massive Beetaloo Basin and generating sustainable cashflow.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au