Empire Energy: The race is on – will this company be the first to market with Beetaloo gas?
Empire Energy Managing Director Alex Underwood on 3AW, 2GB, 4BC & 6PR Bulls N' Bears Report
Listen to ASX-listed Empire Energy Managing Director Alex Underwood talk to Matt Birney on the Bulls N’ Bears Report about Empire’s first full-scale development well in the biblical sized Beetaloo gas basin that will likely see it become the first ever gas producer out of the Beetaloo in the NT.
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Empire Energy is in a race to be the first producer of gas out of the Northern Territory’s massive onshore Beetaloo gas basin that may be harbouring 500 trillion cubic feet of gas. Empire has just started drilling its first full-scale development well at its Carpentaria Pilot project and it is now game on. The company has been racking and stacking government approvals to drill more wells and produce gas and now has its ears laid back in an attempt to be first to market with gas from the almost biblical scale Beetaloo.
RADIO INTERVIEW - TRANSCRIPT
Matt Birney - Welcome to Bulls N' Bears brought to you today by onshore gas developer Empire Energy.
Matt Birney - ASX code: EEG
Matt Birney - I'm Matt Birney and I'm joined now by the Managing Director of Empire Energy, Alex Underwood.
Matt Birney - Hi Alex
Alex Underwood - G'day Matt.
Matt Birney - Okay so Empire Energy is in a race to be the first producer of gas out of the Northern Territory’s massive onshore Beetaloo gas basin that may be harbouring 500 trillion cubic feet of gas. Empire has just started drilling its first full-scale development well at its Carpentaria Pilot project and it is now game on. The company has been racking and stacking government approvals to drill more wells and produce gas and now has its ears laid back in an attempt to be first to market with gas from the almost biblical scale Beetaloo.
Matt Birney - Okay Alex how much ground does Empire have in the Beetaloo and what's your current resource there?
Alex Underwood - We've got over a million acres of land inside the Beetaloo and over 47 trillion cubic feet of gas recoverable which equates to about 30 years of Australia's total gas consumption.
Matt Birney - Empire just started drilling its first fullscale development well, what evidence do you have that the gas will flow at commercial rates?
Alex Underwood - We've already drilled two horizontal appraisal wells which have demonstrated very strong flow rates. This well is a significantly larger well and we believe that in the success case it'll demonstrate commerciality.
Matt Birney - And the previous two wells did that? Were they commercial?
Alex Underwood - Yeah so we achieved rates of nearly 3 terajoules a day on the first well and over 3 and a half terajoules a day on the second well. But this well will be about three times the size and with a bigger diameter and pumping more sand and water to get more flow rate.
Matt Birney - How many more wells do you have approval to drill and how long will that take?
Alex Underwood - We've just received approvals to drill another nine wells on top of these ones and we anticipate that'll keep us busy for the next couple of years.
Matt Birney - Who are you going to sell the gas to and how you going to get it to market?
Alex Underwood - We signed a 10 year gas sales agreement with the Northern Territory government recently and that'll see us producing gas from next year for the full pilot development phase.
Matt Birney - How much gas a day has the Northern Territory government contracted and how much is gas selling for standard in the market right now?
Alex Underwood - So we'll be selling up to 25 terajoules of gas a day. To put that into perspective at the Wallumbilla Hub in Queensland at the moment gas is trading for over $13 a gigajoule or $13,000 a terajoule.
Matt Birney - And the $24 million question, when do you expect to sell first gas out of the Beetaloo.
Alex Underwood - All things going well, we should be selling gas next year.
Matt Birney - How much cash did you have in the bank at last report?
Alex Underwood - $34 million.
Matt Birney - Alex Underwood from Empire Energy.
Matt Birney - Thanks for joining me on Bulls N' Bears and remember we're only here to give you information, not advice, which you should of course seek independently.
Matt Birney - I'm Matt Birney and this is Bulls N' Bears.
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