Empire flags June date for Beetaloo frack test

Beetaloo Basin hopeful Empire Energy has outlined the 1250-metre-long hydraulic stimulation program it is planning for its Carpentaria-2H gas discovery in June. The company is trialling several fluid mixes used in the fracking process to obtain the best production rates from the Velkerri Formation B Shale in its massive but remote gas resource.

The company tabled an independent report in February that outlined a mid-range best estimate figure of 396 billion cubic feet, or “bcf”, an 866 per cent increase from the previously modest 41bcf. Management has put a total inventory figure at 43 trillion cubic feet of gas in its Beetaloo Basin acreage.

Empire drilled and cased the 1,345-metre horizontal section in 2021 after successfully production testing the four producing Velkerri Formation zones in the Carpentaria-1 discovery well and then drilled the Carpentaria 2 vertical well prior to kicking off the horizontal section.

The company, a recipient of almost $20m in Federal Government grants under the Beetaloo Cooperative Drilling Program, says civil works on the drill pad such as installation of stimulation fluid tanks had been completed and other equipment was being mobilised.

Empire has been reimbursed $1.82m under the grant scheme to date with further funding expected as the company executes its work program.

The company is blaming unprecedented global supply chain disruptions for a delay in delivery of some fracture stimulation chemicals however these are now en route to Australia and expected on site for the late June start date.

A variety of fracking methodologies will be trialled as the well is the largest fracking exercise attempted in the Beetaloo Basin to date and the resulting data will help Empire with future well completion and production in addition to hydraulic stimulation design.

Operators around the world have realised that what works in one basin or formation may well not work as effectively in others and refining location specific processes in the appraisal and development of shale plays such as the Beetaloo have been shown to increase production levels over time.

Empire has government approval for a 90-day test, with the initial fracking, flow back and clean up period, where the introduced fluids flow back to surface is estimated to take up to a month after the initial 2-3 week hydraulic stimulation.

The company is trialling a variety of fluid mixes, including slickwater, high viscosity friction reducer and crosslinked gel to assess which design results in the best production performance. Each fracking stage is anticipated to be around 50m long, resulting in a design of up to 25 stages.

Given the research nature of the program it expects there will be varying flow rates between stages as each fluid type has a bespoke perforation design and pumping strategy.

Whilst Empire has been successful in its Australian drilling grant applications, its US operations have been pulling its own weight and tipped in over US$554,000 in EBITDA from its average production levels of just over 4,200 thousand cubic feet equivalent, or “mcfe” per day.

The company said its all-in lifting cost was less than US$3.50 per mcf and with Empire’s hedging providing a floor of US$7.50 per mcf it gives the company a healthy margin in a market currently pushing above US$8 per mcf. Empire had $16m in the bank at the end of the March quarter.

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