Companies: EME   

Empyrean Energy says drilling at its Sugarloaf Block A-3 well in Texas has encountered 'significant' gas shows and 'multiple' flares.

The AIM-quoted exploration and production company, with interests in Germany as well as the USA, indicates the operator has reported these gas shows and flares have been met over 2,700 feet during drilling of the horizontal section of the well in the target zone. London-based Empyrean stresses the well was seen as trying to flow naturally through 'relatively heavy mud weight' and says this has prompted the operator to carrry out an open-hole test to see if the well will flow commercially without stimulation.

If so, then director Tom Kelly suggests this could be ‘a very exciting development for the potential of wells in this area'. Empyrean is also poised next week to test two potential gas-bearing sand deposits in another Texan prospect, Bondi, whose lower zone is estimated to hold a possible 450 million cubic feet of gas, with a possible one billion cubic feet in the upper zone.

Shares in Empyrean, whose broker and nominated adviser is HB Corporate, were floated at 35p in 2005 and soared nearly fivefold to 164.5p by early 2006. They have subsequently plunged and at 34p, up 3.5p this morning, offer the speculative possibility of further rallying if results from Sugarloaf continue to please.

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