Empire seeks buyers for Gingin gas

Junior oil and gas producer Empire Oil & Gas has formally started marketing gas from its Gingin West gas discovery north of Perth, just two and a half months after announcing the find.

Empire, which holds an operating 68.75 per cent interest in the field, today said it would undertake production testing at its Gingin West-1 well next month to provide more definitive data on the likely size of the reservoir.

The production test would also enable the company to confirm that gas from Gingin meets the necessary specifications of the nearby Dampier-Bunbury and Parmelia gas pipelines, which are located just 2.8 kilometres west of the field.

"Analyses to date indicate that the Gingin West -1 natural gas will meet these specifications," the company said, adding that condensate from the field would also be analysed by BP in Singapore as a prelude to signing a contract to supply BP's Kwinana refinery, two hours drive to the south.

Though production testing is yet to begin and reserves are yet to be officially booked for the field, Empire said it had "commenced negotiations to market Gingin West-1 natural gas".

"There is a market demand and importantly a market seeking a diversity of gas supply from the North West Shelf," the company said. "Empire looks forward to providing details of the Gingin West-1 Production Test and the progress of settling a gas sales contract and an oil contract with the BP Refinery.

Empire shares rocketed 75 per cent higher to 1.4 cents when it announced the Gingin West-1 well had flowed at a rate of 7.6 million cubic feet and 301 barrels of condensate a day in mid April.

The company estimates the total potential reserves of its EP 389 permit, in which the field is located, to be as high as 1 trillion cubic feet and 43 million barrels of oil and condensate.

Empire shares closed 11 per cent higher at 1 cent today.