Empire Energy Increases Stake in Beetaloo Basin Permits
ASX-listed Empire Energy Group Ltd. has entered into an agreement with EMG Northern Territory Holding Pty Ltd., a member of Texas-based Energy & Minerals Group (EMG), to acquire its Beetaloo basin portfolio for a total consideration of approximately A$10.6 million payable in cash and stock, plus certain Empire share options.
Under the terms of the deal, Empire will acquire an additional 17.5% non-operated interest in five exploration tenements located onshore in Australia, in exchange for approximately A$1.06 million in cash, plus a stock payment A$9.5 million via the issuance of around 29.7 million Empire shares valued at A$0.32 per share (based on the company’s closing share price on April 25th, 2021). In addition, Empire will also issue approximately 1.7 million unlisted options to EMG, exercisable at A$0.70 per share for three years after their issue date. The consideration shares represent around 5% of Empire’s post-issue share capital.
The transaction follows EMG’s exercise of its tag-along right to a recently-announced transaction between Empire and Sydney-based Pangaea NT Pty Ltd., executed earlier in April 2021, and includes EMG’s entire non-operated interest in the permits. Upon closing of both acquisitions, Empire will hold a 100% operated interest in the permits.
Exploration permits EP167, EP168, EP169, EP305, and EP198 cover a combined area of 2.5 million net acres (net to the acquired 17.5% interest) in Northern Territory, located adjacent to the Amadeus Gas Pipeline, which connects to the Northern Gas Pipeline. The assets are estimated to contain P50 prospective resources and 2C contingent resources of approximately 5.6 trillion cubic feet equivalent (Tcfe) and 31.2 billion standard cubic feet equivalent (Bcfe), respectively, net to the acquired interest.
Previous partners had conducted multiple phases of exploration on the tenements, including a full-tensor airborne gravity gradiometric survey, multiple 2D seismic surveys, and a multi-year drilling program of seven wells which included extensive core capture.
Sydney-based Empire Energy is engaged in conventional oil and natural gas production with operations in the Appalachian and the Mid-Contingent regions of the United States, and also holds highly prospective exploration acreage across the McArthur and Beetaloo basins in Australia.
EMG is a private equity firm focused on investing in companies operating in the natural resources, energy, infrastructure, mining, and minerals sectors, and currently holds investments in North America, South Africa and Australia.
The transaction is subject to long-form documentation and Empire shareholder consents.