Block 29/11 is a large block – 1806 square kilometres – located in the prolific Pearl River Mouth Basin, offshore China, approximately 200km Southeast of Hong Kong. Empyrean is the operator with 100% of the exploration rights of the permit during the exploration phase of the project. In the event of a commercial discovery, China National Offshore Oil Corporation Limited (CNOOC) will have a back in right to 51% of the permit.
Empyrean, as an operator, acquired 580 square kilometres of high-quality 3D survey in 2017 as a part of the work commitment under the Geophysical Service Agreement phase (GSA).
Following the completion of processing and interpretation of the 3D seismic data, three large prospects were matured. Prospective resources (un-risked) of all three prospects on the Block (Jade, Topaz and Pearl) were independently validated, by Gaffney, Cline & Associates, who completed an audit of the Company’s oil in place estimates in November 2018. Total mean oil in place estimates on the three prospects are now 884 MMbbl.
Oil in place (MMbbl) Audited by Gaffney, Cline & Associates
In addition, Gaffney, Cline & Associates estimated close to a 1 in 3 chance of geological success at Jade and Topaz, which is particularly pleasing.
Exploration risk has been further mitigated by the completion of an oil migration study during June 2018 which established oil migration pathways into all three prospects. During the reporting period, in May 2019 as detailed further below, the Company further solidified the technical merits of the project by confirming the presence of well-defined gas clouds over the Jade and Topaz prospects.
Having completed the work commitment of GSA successfully, Empyrean signed the PSC for Block 29/11 with CNOOC in September 2018. The contract came into effect on 13 December 2018 with the first phase commitment being the drilling of one exploration well within a 2.5 year period.