Empyrean Energy: significantly increased profits

Interim Results for the Six Months Ended 30 September 2014

Empyrean, the profitable US onshore oil, gas and condensate exploration, development and production company with assets in Texas and California, has provided an Interim Report for the six months ended 30 September 2014.

Highlights

Financial:

· 32% increase in revenue to US$7,911,000 (30 September 2013: US$6,007,000)
· 32% increase in gross profit to US$4,393,000 (30 September 2013: US$3,322,000)
· 86% increase in net profit to US$2,705,000 (30 September 2013: US$1,451,000)

Sugarloaf AMI:

· Record production of 199,952 boe net to Empyrean before royalties during the period
· Rapid and cost effective drill programme conducted by operator, Marathon Oil Corporation, during the period, with 65 wells spudded
· 154 wells in production as at 30 September 2014
· 184 wells in production as at 23 December 2014
· Frac and stack pilot programme, designed to drive recovery and optimise co-development of multiple horizons, has commenced
· Indicative drill schedule for 2015 targeting approximately 100 wells

Corporate:

· Discussions on-going in respect of the Company’s strategic review and formal sale process
· Further US$6 million drawdown by the Company under Tranche B of its facility with Macquarie Bank Limited to fund the ongoing development of the Sugarloaf AMI during 2015

Empyrean CEO Tom Kelly said, “There has been a significant amount of operational progress at our flagship Sugarloaf AMI Project with the Company’s net production and well count continuing to benefit greatly from the increased activity. Whilst the macroeconomic environment has been challenging in recent months, the Board of Empyrean continues to assess the range of options currently available to it as part of the ongoing strategic review process in order to maximise value for its shareholders.

“Importantly, with our world class operator in Marathon continually focussed on lowering the costs of drilling and production as well as improving the economics and speed of its various drilling and operational initiatives, I believe that 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. I also welcome the continued support of Macquarie in providing the additional funding to support the Company’s continued participation in this play.”

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