PROJECTS: SUGARLOAF HOSSTON PROJECT, TEXAS USA
(Original EME Interest between 3%-9%)

Energy signed the original farm-in agreement with Houston based Texas Crude Energy Inc ("TCEI") on 6 April 2006. The Sugarloaf-1 well intercepted a secondary objective, the Austin Chalk, which is the gas-condensate producing reservoir of the Sugarkane Field, the discovery well of which lies 6.6 km to the west of Sugarloaf-1.

The Sugarkane Field has potential recoverable reserves of more than 3 trillion cubic feet of gas and 500 million barrels of condensate. Its extent could encompass Blocks A and B in which Empyrean holds interests.

To date Empyrean has participated in the drilling of 4 wells in Block A and 5 in Block B. Initial estimates indicate the potential recoverable reserves attributable to each producing well could lie between 2-10 billion cubic feet of gas equivalent.

On the 21 September 2009 Empyrean Energy announced that TCEI, the operator of Block B, had been successful in its efforts to farm-out Block B to Hilcorp Energy Company ("Hilcorp"), the fourth largest private E&P company in the USA. Hilcorp has since successfully re-stimulated 3 existing Sugarloaf horizontal wells and drilled 3 new wells at 100% their cost to earn a 50% interest in Block B, and will continue as operator.
  

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