Company Information for Empyrean Energy plc

AIM-EME

www.empyreanenergy.com

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AIM; EME

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Company Statement

Empyrean Energy plc is a London-based company listed on AIM (clicker EME), established to finance the exploration, development and production of energy resource projects with a predominant focus on projects in geopolitically stable environments.

Empyrean has a strong management team, with many years experience in both the global investment and energy industry. The company is involved in four projects and continues to pursue other exciting energy opportunities.

Empyrean has in a very short period of time proven its ability to identify, analyse, negotiate and fund excellent projects with an appropriate mix of risk versus reward. Empyrean will continue to balance out its portfolio of projects with a continual review of opportunities globally. Empyrean prides itself on being able to fast track the process from identification of a suitable project through to funding and drilling.

Operations and Technology

SUGARLOAF HOSSTON PROJECT, TEXAS USA
Empyrean signed the original farm-in agreement with Houston based Texas Crude Energy Inc ("TCEI") on 6 April 2006. Although the Sugarloaf-1 well was successfully drilled to a total depth of 20,896 ft, the primary objective reservoir, the Hosston sandstones, proved to have insufficient permeability to provide economic gas production.

However, significant gas shows and fluorescence were encountered higher in the section in the secondary objective. Electric log analysis indicated the presence of a 92 ft gross column of gas in fractured limestones of the Austin Chalk.

The gas discoveries in this carbonate reservoir had two immediate effects. Firstly, the operator increased the land acquisition programme within the area of mutual interest (which stood at approximately 19,500 acres in April 2007); and secondly, it activated negotiations which resulted in the conclusion of a second farm-in agreement between Empyrean and TCEI.

This second agreement involved the division of the prospective area into Blocks A and B and pertained only to the next 16 wells to be drilled on Blocks A or B (subsequent to Sugarloaf-1). TCEI remains the operator in Block B. A major oil and gas company (name undisclosed for confidentiality purposes and to protect competitive advantage) is the operator in Block A.

The operational momentum of Empyrean is manifest in the increased working interest it has been able to negotiate after consummating a second farm-in agreement with TCEI. This second farm-in agreement is over an area divided into Blocks A and B. Empyrean started with a 6% working interest in the whole of Block B acreage, and subsequently drilled the Sugarloaf-1 well. The additional farm-in covers the next 16 wells to be drilled on either Block A or B, after Sugarloaf-1. The deal earns Empyrean a 7.5% working interest where these wells are drilled on Block A and an additional 12% working interest where these wells are drilled on Block B (i.e. the original 6% plus a further 12% resulting in 18%). Following the successful flow testing of two wells on Block A, a drilling programme is being designed to appraise and develop this exciting new field that has been named the Sugarkane Field.

MARGARITA, TEXAS USA
On 5 December 2006 Empyrean entered into an agreement with the Wandoo Joint Venture to earn a 44% working interest in Project Margarita, South Texas onshore. The agreement involved participation in the drilling of six shallow gas prospects then three, deep, high impact gas prospects.

The shallow programme commenced in December 2006 and resulted in commercial successes for three of the six wells drilled (with a fourth watering out prematurely after successfully flowing gas in the early stages). Of the three producing wells, Agavero also has the potential to flow oil in time and the most prolific well, Dona Carlota, has measured a calculated absolute potential flow rate of 20.5 million cubic feet of gas per day.

EAGLE OIL POOL DEVELOPMENT, CALIFORNIA USA
Empyrean Energy Plc has secured a farm-in agreement with ASX-listed Victoria Petroleum NL to earn a 38.5% working interest in the Eagle Oil Pool Development Project in the San Joaquin Basin California.

Eagle North-1, an appraisal well of the Eagle Oil Pool, was spudded on 12 January 2006. It was located 366 metres to the northwest of the Mary Bellocchi-1 vertical well which tested oil at rates of up to 223 barrels of oil per day and gas at rates of 0.7 million cubic feet of gas per day from a 12 metre interval in the lower Gatchell oil sands.

Oil shows and fluorescence were encountered whilst drilling and an effort was made to perforate a zone for production testing. This perforation attempt failed and unfortunately the perforating guns were unable to be recovered from the well. Although the presence of oil was confirmed while drilling, the time lost in side track and unsuccessful fishing operations forced the eventual suspension of the well in October 2006 as the partners agreed that further monies would be better spent on a new sidetrack or possibly a new vertical/ and or horizontal well.

Since mid 2007, the operator Victoria Petroleum NL has been attempting to reduce its interest in the project and find a replacement for its operatorship, which has been the result of an internal corporate decision, and in no way reflects a change in perception of the prospectivity of the Eagle Oil Pool project.

It still has not been decided by partners whether the Eagle North-1 will be re-entered and sidetracked to test the 177m of Lower Mary Bellocchi Gatchell oil sand or whether a new well should be drilled in close vicinity.

It is currently Empyrean's intention to participate in the drilling of a new well.

GLANTAL PROSPECT, GERMANY

Empyrean Energy Plc currently has an assigned 40% working interest in the Neus Bergland Permit and has acquired the rights to earn up to a 52% working interest (subject to meeting further expenditure requirements as per the terms of the Farm-in Agreement and the Permit).

The first well, Glantal-1, was spudded on 29 November 2005 and was drilled to a total depth of 1,687 metres. Four zones considered to exhibit reservoir qualities were tested. Only one interval returned gas, in uneconomic quantities, and the well was consequently plugged and abandoned.

Despite test results, the prospectively of the project still remains high. Glantal-1 results proved the existence of seal (one of the greater pre-drill risks), the presence of fractures as a major component of reservoir effectiveness and the presence of gas during drilling and in the drill stem test number four.

On 28 November 2006, an application to extend the permit to 12th December 2009 was granted by the German authorities.

Following the results of Glantal -1, the operator Pannonian International Ltd and Empyrean have decided to embark on a seismic acquisition programme focussed on the Lautertal structure to the east of Glantal. It was agreed that the same high maturation readings encountered at Glantal-1 risked being encountered in an updip well (Poltzberg Anticline). And even though the Glantal prospectivity remains intact, Lautertal presented a more attractive potential target. The results of the 2D vibroseis seismic programme of approximately 125km, will need to be analysed prior to choosing locations for drilling at Lautertal.

Board of Directors and Key Management

Dr Patrick Cross	Non Executive Chairman
Mr Frank Brophy	Technical Director
Mr Thomas Kelly	Commercial Director
Mr John Laycock	Financial Director
Ms Jade Styants	Company Secretary & Financial Controller

Company Address

Claridge House
32 Davies Street
London, United Kingdom W1K 4ND


Telephone:	+44 (0) 20 7182 1746
Facsimile:	+44 (0) 20 7491 1254
Email:	enquiries[at]empyreanenergy.com
Website:	http://www.empyreanenergy.com

Additional Address/Key Contact

Principal Business Office:
Suite 1, 64 Thomas Street
West Perth WA 6005
AUSTRALIA

Postal Address:
PO Box 781
West Perth WA 6872
AUSTRALIA

Nominated Brokers

Astaire Group Plc
30 Old Broad Street
London EC2N 1HT

Nominated Advisors