Empyrean Energy PLC Macquarie Bank Facility Re-finance and drawdown (1312J)
01 April 2015 - 7:15PM
UK Regulatory
TIDMEME
RNS Number : 1312J
Empyrean Energy PLC
01 April 2015
Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil &
Gas
1 April 2015
Empyrean Energy PLC ('Empyrean' or 'the Company')
Macquarie Bank Facility Re-finance and drawdown
Empyrean Energy, the profitable US onshore oil, gas and
condensate exploration, development and production company with
assets in Texas and California, is pleased to announce that it has
reached an agreement with Macquarie Bank Limited ('Macquarie') for
additional debt funding under Tranche B of its facility (the
'Facility'). The further proceeds from the Facility will be used to
finance the Company's continued participation in the continued
development of its flagship Sugarloaf AMI Project in onshore Texas
('Sugarloaf' or the 'Project').
Empyrean has a 3% working interest in the Project, which is
operated by Marathon Oil Company, a subsidiary of US major Marathon
Oil Corporation (NYSE: MRO) ('Marathon' or the 'Operator').
Macquarie has agreed to make US$11,000,000 available to the
Company immediately under the Facility and has indicated that
further amounts may also be available in due course, subject to
satisfaction of certain conditions, including further credit
approvals and well performance and reserve hurdle criteria.
The total amount outstanding on the Facility following the
drawdown and the scheduled repayment of US$1 million on 31 March
2015 will be US$21.67 million.
The interest rate payable on the Facility will remain unchanged
at 9% p.a. plus LIBOR. The Company has also restructured the
amortisation and repayment profile of the Facility, such that loan
repayments will be reduced to US$1,000,000 per quarter commencing
31 March 2015 through to 30 June 2016, after which they will
increase to US$3 million, US$4 million, US$5 million and US$6
million on 30 September 2016, 31 December 2016, 31 March 2017 and
30 June 2017 respectively.
In order to secure the financing described above, the Company
has conditionally agreed to issue a further tranche of options to
Macquarie in respect of 15,000,000 ordinary shares in the Company
(the 'Options') at an exercise price of GBP0.10 per Option and with
an expiry date of 4 years from the date of issue of the Options.
The Company does not currently have sufficient authority to enable
the grant of the Options and, accordingly, Shareholder approval
will be sought for the grant of the Options at a meeting to be held
on or before 27 July 2015. In the event that such Shareholder
approval is not obtained, the Company will be required to pay to
Macquarie an amount in cash or other consideration acceptable to
Macquarie having a value equivalent to the Options which have not
been granted. In addition, the Company is required to enter into
hedging arrangements acceptable to Macquarie in respect of a
portion of its production.
In addition, the Company has agreed that the expiry date
attaching to all existing tranches of options granted to Macquarie
will be amended as follows:
Options Exercise Price Old expiry New expiry
----------- --------------- -------------- --------------
15,000,000 GBP0.08 19 July 2016 19 July 2017
----------- --------------- -------------- --------------
15,000,000 GBP0.10 19 July 2016 19 July 2017
----------- --------------- -------------- --------------
15,000,000 GBP0.12 25 March 2017 25 March 2018
----------- --------------- -------------- --------------
Empyrean CEO, Tom Kelly said, "Empyrean is pleased to have been
able to secure additional debt financing during some of the most
challenging market conditions the industry has seen in recent
years. This achievement speaks volumes for the quality of the
Sugarloaf asset and will allow Empyrean to participate in the
further development at Sugarloaf based on the current indicative
development programme planned by Marathon for 2015. This programme
includes current plans to drill approximately 100 wells during
2015, with a significant number of those targeting the Austin Chalk
formation.
"As stated previously, Marathon continues to optimise well
performance and drilling and completion costs continue to decrease.
We are confident that further data gathered from existing Austin
Chalk wells, in conjunction with additional Austin Chalk wells
coming on line at lower spacing density, have the potential to
deliver a significant increase in contingent resources along with
an increase in proven reserves for existing producing locations in
the short to medium term.
"Empyrean believes that the Sugarloaf project remains robust at
current commodity prices and aims to capitalise on the improved
efficiencies and the potential increases in reserves that the
co-development of the Eagle Ford Shale with the overlying Austin
Chalk can deliver to ensure the Company is well positioned to
benefit from any recovery in oil prices moving forward. Empyrean
thanks Macquarie for its continued support."
For further information please visit www.empyreanenergy.com or
contact the following:
Empyrean Energy plc
Tom Kelly Tel: +618 9481 0389
Cenkos Securities plc (NOMAD)
Neil McDonald nmcdonald@cenkos.com Tel: +44 (0) 131
220 9771
Nick Tulloch ntulloch@cenkos.com Tel: +44 (0) 131
220 9772
St Brides Partners (Public Relations Adviser)
Hugo de Salis hugo@stbridespartners.co.uk Tel: +44 (0) 20 7236
1177
Elisabeth elisabeth@stbridespartners.co.uk Tel: +44 (0) 20 7236
Cowell 1177
Lottie Brocklehurst lottie@stbridespartners.co.uk Tel: +44 (0) 20 7236
1177
The information contained in this announcement was completed and
reviewed by the Technical Director of Empyrean Energy Plc, Mr Frank
Brophy BSc (Hons) who has over 40 years experience as a petroleum
geologist.
Notes to Editors:
Empyrean Energy Plc is an AIM listed (Ticker: EME) profitable US
on-shore oil, gas and condensate exploration, development and
production company with assets in Texas and California. The
Company's portfolio represents a mix of assets at various stages of
development. Its flagship project is the Sugarloaf AMI in the
prolific Eagle Ford Shale, Texas, where it has a 3% working
interest in approximately 24,000 gross acres centrally positioned
in the liquids rich sweet-spot within the field. Empyrean has an
interest in 205 gross producing wells with full development
expected to reach over 770 wells. Further development of the Eagle
Ford Shale anticipated to require in the order of a further 300
wells, with down spacing potential of a further 200 wells. Further
development of the Austin Chalk anticipated to require in the order
of a further 300 wells, with down spacing potential of a further
235 wells. The Company has a term debt facility of up to US$50
million with Macquarie Bank, subject to reserve hurdles and
drawdown approvals, in place in order to develop this acreage which
is operated by US major Marathon Oil Company.
Other assets include a 58.084% interest in the Eagle Oil Pool
Development Project located in the San Joaquin Basin, southern
California, a proven oil and gas province. Empyrean's large working
interest in this project provides the Company with flexibility and
leverage with potential high impact from success. Additionally,
Empyrean has a 7.5% interest in the Sugarloaf Block A operated by
ConocoPhillips in the Eagle Ford Shale, and a 10% working interest
in the Riverbend Project in Texas.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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