Blue Ocean also upgrading - "MASSIVE UPGRADE IN BEETALOO GAS...

Blue Ocean also upgrading - "MASSIVE UPGRADE IN BEETALOO GAS RESOURCE"

SPECULATIVE BUY TARGET = 0.75c

Empire Energy Group Limited (ASX: EEG) is continuing to advance its exciting shale gas opportunities in the Northern Territory. Netherland Sewell & Associates Inc. (NSAI) one of the worlds’ leading petroleum resource consultancy companies, has opined on a major gas resource upgrade for the Velkerri Shale sequence in EP 187. This 96% jump in Prospective Resource in the Velkerri is a major positive for Empire.

The report notes ...

NSAI has reported a 96% lift in gas potential

Netherland Sewell and Associates Inc. (NSAI) have substantially upgraded Empire’s Prospective gas resource in the Beetaloo Sub-basin acreage to 2.339 Tcf. The uplift comes following regional success in the area and the interpretation of the recently acquired seismic.

Drilling to come in 2020

We anticipate that the Carpentaria-1 well will be drilled by Empire in 2020, following the receipt of final government approvals for the Covid-19 plans and the completion of negotiations of the drilling rig contracts. Fracture stimulation and testing will likely follow the drilling in late 2020 or early 2021.

Valuation lifted by 55% to 76 cents

The expansion of the Prospective Resources in the Beetaloo has been accretive to our valuation of the business. At the same time, the credibility of a globally recognized resource consultancy provides added confidence to our investment thesis.

Our valuation of EEG has increased by 55% to 76 cents per share based on the jump in Prospective Resources. We retain our Speculative Buy recommendation.