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Empire Energy eyes another potential 10 well drilling program on Central Kansas Uplift

Empire Energy Group (ASX: EEG) has spud the final well, Schmeid Ranch #16-1, of its 2011 10 well drilling program in Kansas and is preparing for its 2012 drilling program which could potentially include another 10 wells.

The company now has seven of the 10 wells on production in the very prolific oil and gas producing state of Kansas, a state which has produced in excess of 6.1 billion barrels of oil and 37.5 trillion cubic feet of gas.

In mid-november, Empire Energy brought its seventh well into production. Helmers Unit #3, the eighth well spud in the program, produced an initial four day flow rate of 91 barrels of oil per day.

It is currently flowing at a rate of 35 barrels of oil per day.

Executive chairman Bruce McLeod told Proactive Investors today it will take about a week to drill the Schmeid Ranch #16-1 well and see if it will be completed. Completion will then take another month.

Reducing Debt

Last week Empire Energy announced it has raised A$1.7 million through the exercise of 6.67 million options at $0.12 each by Macquarie Bank which the company will use to reduce existing debt.

Economies of Scale

With preparations underway for another possible 10 wells on the Central Kansas Uplift, Empire Energy once again as the opportunity to save on costs through economies of scale.

In early November the company revealed that the costs of completing and bringing into production the first six wells on the Central Kansas Uplift came in at $202,000 per well, significantly lower than the estimated cost of $326,000 per well.

These costs savings over the six wells have helped the company save close to $750,000 compared to forecasts.