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Highlights
- Empire Energy progresses with Carpentaria Gas Project in Beetaloo Sub-basin.
- New agreement targets daily gas supply from mid-2025 through a 10-year deal.
- Cash reserves bolstered to support ongoing development activities.
Empire Energy (ASX:EEG) recently shared key updates in its Q3 2024 report, focusing on advancements within its Carpentaria Gas Project in the Beetaloo Sub-basin, Northern Territory. Known for its focus on unconventional gas resources, ASX energy stock Empire operates across roughly 29 million acres, targeting natural gas in shale, tight sandstone, and coal seams—resources that typically require advanced extraction techniques like hydraulic fracturing and horizontal drilling.
The quarter’s highlight includes preparations for Empire’s Carpentaria-5H (C-5H) well, projected to begin development in November 2024. Notably, Empire has contracted Ensign Australia for drilling services and Halliburton for hydraulic fracturing, emphasizing the scale and significance of this well. Set to be the company’s longest horizontal well to date, C-5H targets a 3,000-meter lateral section with approximately 60 fracture stimulation stages, designed for maximum productivity. Leveraging insights from North American shale and prior operations, Empire anticipates this well to achieve high production levels, potentially making it one of the most productive wells in the region. Critical long lead items, such as drill casing and wellheads, are already in place, supported by the necessary environmental and regulatory permits.
A substantial development this quarter was the signing of a 10-year Gas Sales Agreement (GSA) with the Northern Territory Government on July 26, 2024. This agreement commits to an initial supply of 25 terajoules (TJ) per day from 2025, with an additional option to supply 10 TJ per day if production exceeds 100 TJ daily, potentially delivering a total of 75 petajoules (PJ) over the contract term. Gas is to be transported via the McArthur River Pipeline under a take-or-pay arrangement, with prices indexed to the Consumer Price Index. This agreement underscores the strategic role of the Beetaloo Basin in bolstering Australia’s energy supply, as highlighted by Managing Director Alex Underwood.
Financially, Empire reported cash reserves of $39.8 million at the end of Q3 2024, with an added boost of $4 million from a Research and Development Tax Offset. These funds will support ongoing and future project developments, further strengthening Empire’s position as it aims for a final investment decision (FID) by mid-2025, the anticipated date for gas sales commencement, pending regulatory clearances.
As Empire Energy continues to advance its gas production capabilities, shares saw a 2.33% rise, trading at 22 cents. The Carpentaria project’s developments not only mark a significant step for the company but also hold promise for reinforcing energy security across the region.
