Empire Oil & Gas NL (Empire Oil & Gas), through its subsidiary, Empire Oil Company (WA) Limited, together with ERM Gas Pty Ltd (ERM Gas), a subsidiary of ERM Power Pty Ltd (ERM), are the successful applicants for two exploration permits located in the South Perth basin, Western Australia. Empire Oil & Gas, together with ERM Gas, will be awarded by the Western Australian Department of Mines and Petroleum, the two new permits complimenting the existing Empire/ERM Perth basin joint ventures.
The formal grants will be subject to settling native title agreements with the native title claimants.
Empire Oil & Gas has joint ventures with ERM Gas in seven of its Perth basin permits including EP 389 where it is planned to drill the Gingin West-1 well in third quarter of 2009.
The two new exploration permits now in the award process are considered prospective for both coal seam gas and conventionally reservoired natural gas. Empire Oil & Gas, together with ERM Gas, will evaluate both these play types in Year 1 of both the permit grants.
Empire Oil & Gas is particularly interested in the potential for natural gas accumulations in the two permits. The Leschenault prospect is mapped within the Empire Oil & Gas operated EP 416 permit and is considered to extend north into the L/08-7 permit.
Leschenault North is an immediate lead. The Leschenault prospect in EP 416 is located to the north of the Wellesley prospect (Wellesley is a mature gas prospect planned for drilling during 2010) and consists of an elongated north-south trending four-way dipping anticline at the top Triassic Lesueur sandstone and the deeper Permian Sue Coal Measures. Within the Leschenault prospect, the gas prospective reservoirs of the Permian Sue coal measures are located at a significantly shallower depth of 2,000 meters compared to Wellesley at 3,700 meters. Empire Oil & Gas considers the Permian Sue coal measures highly prospective for natural gas, with the shallower Lesueur sandstone prospective for oil.
Empire Oil & Gas considers the permit area further north, L/08-6, is prospective for both natural gas as well as coal seam gas. The terrace plays for both conventional and coal seam gas will be evaluated upon its grant.
The equities held by each of the participants in the exploration permits are: Empire Oil Company (WA) Limited application area L/08-6, 40%, application area L/08-7, 40%, ERM Gas (operator) application area L/08-6, 60% application area L/08-7, 60%.