In May 2017, Empyrean agreed to farm-in to a package of opportunities including the Dempsey and Alvares prospects in the Northern Sacramento Basin, onshore California. The rationale for participating in this potentially significant gas opportunity was a chance to discover large quantities of gas in a relatively ‘gas hungry’ market. Another attractive component of the deal was the ability to commercialise a potential gas discovery using existing gas facilities that are owned by the operator.
The first exploration well, Dempsey 1-15, was drilled to a TD of 2,970 metres (9,747 feet) in September 2017. Comprehensive data was collected including wireline logs in the Dempsey 1-15 well. The analysis confirmed numerous potentially gas-bearing zones. A comprehensive production testing programme was conducted to assess the production capability of these zones through Q4 2017 and Q1 2018.
In July 2018, Dempsey 1-15 commenced production of sales gas into pipeline at an approximate rate of 1,300 mcf per day from combined zones in Kione Sandstone and deeper cretaceous zones. However, the flow rate was not sustainable longer term due to a relatively tight and poor-quality reservoir and subsequent water ingress into the well resulted in the well being shut in for technical evaluation to determine the zone from which the water was entering and to provide for forward program alternatives. A workover is required to reduce water flow (interpreted to be from separate wet reservoirs) in the wellbore. A detailed and comprehensive analysis of subsurface data is to be undertaken with the aim of finding a better-quality reservoir along the “Dempsey trend”.
The joint venture continues to integrate the subsurface data with regional geology and seismic data to evaluate additional more attractive targets in thicker reservoir units for future drilling.
The Dempsey Trend AMI, in which Empyrean will earn a 30% interest, extends to approximately 250,000 acres (including the Dempsey structure) and includes at least three large Dempsey style identified follow up prospects, including the Anzus and Borba prospects which have shown promising initial interpretation results.
The joint venture continues evaluation work at the Alvares-1 well (regulatory approval was obtained to test the Alvares-1 well in September 2018). The initial plan at Alvares was designed to re-enter and assess the integrity of the wellbore as the basis for a decision to either record modern logs through casing or to identify the more prospective zones for perforation.
During 2019 the drilling application for the Borba Prospect was approved by the County and final approval from California Department of Geological and Geothermal Resources was also received.