Empyrean Energy in takeover talks as well production dips

US oil & gas explorer Empyrean Energy unveiled record half-year production at a flagship project but problems at another and said it was considering selling itself.

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Empyrean said its main Sugarloaf AMI project had produced a record 199,952 barrels of oil equivalent attributable to the company in the six months to 30 September.

It had 184 wells in production at 23 December against 154 producing wells at 30 September and is planning to drill about 100 wells in 2015.

But the company said it may need more than a thousand extra wells to fully exploit the Sugarloaf AMI. It also said it was still in talks about a strategic review and formal sale process.

Empyrean added that production at its Riverbend project, in which it has a 10% working interest, had dropped significantly and the well had been shut in intermittently since June and was undergoing remedial works. Empyrean has said Riverbend is not part of its future plans.

Chief executive Tom Kelly said: "The Sugarloaf AMI remains a very viable project for Empyrean in the current low oil price environment and provides us with significantly de-risked exposure to the onshore US oil and gas market."

Shares fell 0.5p or 6.15% to 7.62p at 12:24 in London.