Empyrean Energy sees Hilcorp take over as Sugarloaf operator
05 February 2010
Empyrean Energy reported today that operatorship of the Sugarloaf project on Block B in Texas, US, had changed hands from Texas Crude Energy to recent farm-out partner, Hilcorp Energy.
The move follows a deal last September which saw Hilcorp enter the fray, promising to carry out a programme of work in order to improve production levels at Sugarloaf. Under the terms of that agreement, Hilcorp, reckoned to be the fourth largest private E&P company in the US, could earn a 50% stake in the project.
Since then, workover programmes have either been carried out or are underway on three existing wells on the field and plans for three new wells are also well advanced.
Pre-farm-out, Empyrean had a 6% stake in the field, which will eventually fall to 3%. Today, the company said it welcomed the latest development but acknowledged the role of Texas Crude Energy in maturing the project to its present status. The US group is set to remain very actively involved and in particular will continue to manage land related issues.
For its part, Empyrean is being free-carried for the drilling, completion and tie in of the three new horizontal wells and the stimulation of the three existing Sugarloaf horizontal wells; Kennedy-1H, Kowalik-1H and Weston-1H.
In an update on field operations, new well Easley-1H has reached a depth of 8,362ft having run and cemented the intermediate casing string. The forward plan is to drill down to the Austin Chalk and Eagle Ford Shale targets with a vertical pilot hole to a planned depth of 11,800ft. The pilot hole will be logged before sidetracking as a horizontal production well.
Elsewhere, fracture stimulation operations have started at the Weston-1H well with a design similar to the recently successful ‘frac’ of the Kennedy-1H well. Kennedy-1H is still being cleaned up, with production performance in line with expectations.
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