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Empire Energy Group Granted First NT Oil And Gas Permit

Empire Energy Group (ASX: EEG, OTC-QX:EEGNY) has been formally granted its first exploration permit in the McArthur Basin, Northern Territory, that is prospective for shale oil and gas.

Notably, EP184 is close to Armour Energy's (ASX: AJQ) Glyde-1 well that flowed gas at a rate of 3.3 million cubic feet per day during testing and the Cow Lagoon-1 well, which flared gas.

During the five year term for EP184, the company will be required to carry out geological and geophysical studies; seismic; and drilling of both a test and a horizontal well.

EP184 is the first lease to be granted from Imperial's seven application areas that collectively cover 59,172 square kilometres of conventional and unconventional petroleum prospective acreage.

The principal targets in the 11,210 square kilometre permit, which is located in the highly petroleum prospective central trough of the McArthur Basin south of the Roper River, are unconventional and conventional oil & gas sourced from Palaeo-Proterozoic age black carbonaceous shales of the Barney Creek and equivalent formations.

The company expects to start the 156 kilometre 2D seismic survey in the early stages of the 2014 dry season to confirm the geological structure and sedimentary sequence architecture of the McArthur Basin in the northern part of EP184.

This will also confirm the depth and thickness detail of the target black shale formations as well as the four-way closed structures identified during the 3D mapping program.

These structures are targets for conventional petroleum traps and are considered to be prime locations for initial exploration wells proposed to be drilled in 2014.

Exploration Targets

Over the past 15 months, the company has undertaken a comprehensive analysis of existing regional core.

Over 900 900 individual core samples have been analysed with results now being correlated.

This has also been supported by Armour's Glyde-1 well, immediately to the east and contiguous with EP184, analysis of the core results, along with previous analytical work undertaken by others, resulting in the generation of a significant petroleum system by the Barney Creek and other equivalent black shale formations.

Preliminary results of these studies are expected to be available in the short term.

McArthur Basin

The McArthur Basin contains a large scale shale oil and gas exploration play in the Barney Creek Formation, which is up to 900 metres thick.

Empire Energy has previously noted the uniformity of this shale formation, which in light of the strong gas flows from Glyde-1, make it likely that commercial gas flows are possible throughout the Batten Trough of the Basin.

Substantial positive progress has been achieved to date in engaging with the Traditional Aboriginal Landowners on the remaining Aboriginal Land leases, to areas north and south of EP184. The Company will report on that progress in due course.

Analysis

With the award of EP184, Empire Energy is now free to begin exploration designed to unlock both the conventional oil and gas and unconventional shale oil and gas potential of at least part of its McArthur Basin acreage.

Notably, the area has been considerably de-risked by Armour's successes just adjacent to the permit, increasing the probability of making a discovery.

Macquaire Bank (ASX: MQG) holds a 17.6% stake in the company.

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