Energy of the Empire (ASX:EEG) has released its third quarter 2024 quarterly report, announcing progress on the Carpentaria Gas project.
The company focuses on the exploration and development of unconventional gas resources over an area of approximately 29 million acres in the Beetaloo sub-basin in the Northern Territory. Unlike conventional gas, which flows through porous rocks and is typically extracted from large reservoirs, unconventional gas is often trapped in impervious rock formations, such as shale, coal seams, or compacted sandstone. This gas is generally obtained using techniques such as hydraulic fracturing (fracking) and horizontal drilling, which allow the gas to be released from the rock.
This quarter, Empire’s work focused on the development of the Carpentaria-5H (C-5H) well. Development of the C-5H well is expected to begin in November 2024, with Empire contracting Ensign Australia for drilling and Halliburton for hydraulic stimulation. The well is designed as Empire’s longest horizontal well, with a lateral section of 3,000 meters and targeting optimal productivity with approximately 60 fracture stimulation stages. Empire is incorporating information from North American shale operations and legacy wells at Carpentaria, predicting the well will be one of the most productive in the region. Long-life elements, including drill casings and wellheads, have already been secured and the necessary environmental and regulatory approvals are in place.
The recent 10-year binding gas sales agreement (GSA) between Empire and the Northern Territory Government, signed on 26 July 2024, outlines an initial supply of 25 terajoules (TJ) per day from 2025. The agreement also includes an optional supply of an additional 10 TJ per day if production exceeds 100 TJ per day, potentially providing 75 petajoules (PJ) over the life of the contract. The gas will be transported through the McArthur River pipeline on a take-or-pay basis (an agreement in which the buyer agrees to “take” a specific minimum amount of gas or “pay” a shortfall penalty) , with prices indexed to the Consumer Price Index. “This agreement marks a critical step in our mission to support energy security in Australia,” said CEO Alex Underwood. “The NT Government’s commitment highlights the strategic importance of the Beetaloo Basin to the region’s energy future.”
Empire’s cash reserves at the end of the quarter were $39.8 million. Empire also received a $4 million research and development tax offset, which will bolster its working capital to move the project forward.
Empire Energy aims to reach a final investment decision (FID) for the project in time for gas sales to begin by mid-2025, depending on regulatory milestones.
The shares are trading up 2.33% at 22 cents.