Sydney, Australia, Sep 30, 2019 - (ABN Newswire) - Empire Energy Group Limited (ASX:EEG.AX - News) (OTCMKTS:EEGUF - News) is pleased to advise shareholders that it has completed the sale of its Kansas assets to Mai Oil Operations, Inc. ("Mai Oil") for a final sale price of US$19.25 million.
The sale proceeds have been principally used to reduce debt from US$24.81 million to US$7.5 million with the remaining cash proceeds of approximately US$1.5 million, after closing costs, retained for Empire's growth projects and working capital.
Alex Underwood, Chief Executive Officer of Empire, said:
"The completion of the Kansas sale on attractive terms represents a major milestone in the execution of our wealth creation strategy for shareholders outlined in January. The execution of this strategy has enabled us to reduce net debt levels by nearly 90% over the last 12 months and materially strengthen our working capital position.
We have now received Ministerial consent for our EP187 2D seismic program in the Northern Territory and expect final work program approvals to follow soon. With seismic acquisition in our EP187 tenement in the Northern Territory expected to commence soon, and substantial news flow from our neighbours in the Beetaloo Basin anticipated, we have established a solid foundation for growth in the McArthur and Beetaloo Basins."
RESIDUAL PRODUCING ASSETS IN APPALACHIA, USA
Empire has retained its cash flow positive Appalachia gas production assets, and all of its interest in the Marcellus and Utica Shale acreage which underlies the New York State gas production. Empire holds its Marcellus Shale and Utica Shale acreage at minimal cost.
Empire will consider initiatives to enhance the value of the Appalachia assets while maintaining a principal focus on the core Northern Territory assets.
DEBT REDUCTION AND WORKING CAPITAL
The debt reduction process carried out over the last 12 months has reduced net debt by nearly 90%.
Total debt has fallen from US$38m at 30 June 2018 to US$7.5m, while net debt has fallen from US$37 million to less than US$4 million with current cash at bank of more than US$3 million.
Empire has entered into a new 5 year debt facility with Macquarie Bank Limited for the residual debt on improved terms. The terms of the new facility are summarised at Appendix A.
NORTHERN TERRITORY OPERATIONS UPDATE
As previously advised to shareholders, Empire is one of the most active companies in the Beetaloo and McArthur Basins since the lifting of the moratorium in April 2018 and subsequent implementation of the regulatory framework allowing development of the basins.
Empire has received Ministerial approval for the EP187 seismic EMP and expects to receive final work program approvals imminently. Empire is expected to be the first company other than major operators Santos and Origin to recommence on ground activities in these basins since the lifting of the moratorium.
Government approvals for drilling operations are proceeding well. Empire anticipates it will have all necessary approvals to commence exploration drilling by the commencement of the 2020 dry season (early Q2 2020).
Activity by major operators continues to build with significant news flow expected in the coming months.
About Empire Energy Group Ltd:
The Company has over 14.5 million acres in the McArthur & Beetaloo Basins, Northern Territory, both of which are considered highly prospective for large shale oil and gas resources. Work undertaken by the Company over the past 5 years demonstrates that the Central Trough of the McArthur Basin, of which the Company holds around 80%, is highly prospective, with key similarities to those extending through Oman, Siberia and Southern China and which contain resources of billions of barrels of oil equivalent.
Empire Energy Group Ltd E: email@example.com T: +61-2-9251-1846 F: +61-2-9251-0244 WWW: www.empireenergygroup.net
Empire Energy Group Ltd
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