UPDATE 1-Empyrean Energy to cut Texan well stake to 6 pct

* Says move to cut cost exposure

* To pay 6 pct of costs for Sugarloaf Block B wells

* Shares fall 7 percent (Adds details)

Jan 9 (Reuters) - Oil and gas explorer Empyrean Energy Plc (EMEL.L) said on Friday it would reduce its interest in Block B of the Sugarloaf Project in Texas to 6 percent from 18 percent, effective immediately, to reduce its cost exposure.

Empyrean had originally a 6 percent interest in the block, operated by Texas Crude Energy Inc, and had the right to revert to the initial holding, it said.

The company had already drilled 7 wells out of the 16-well deal, it said in a statement.

Empyrean said it would retain its interest in wells on Block A and B that have already been drilled and completed.

It will pay 6 percent of costs for a 6 percent gross interest (about 4.5 percent net interest after royalties) for all future wells on Block B that it decides to participate in.

The company will have to absorb the impact of writing off a portion of the costs associated with the Weston well that had been already incurred, it said.

At 1145 GMT, Empyrean Energy shares were down 0.75 pence at 10.5 pence on the London Stock Exchange. (Reporting by Srikanth Srinivasa in Bangalore; Editing by Gopakumar Warrier)