Empyrean Could Opt Out of Further Drilling; Shares Drop-Update
02 September 2015 - 7:14PM
Dow Jones News
By Alex MacDonald
LONDON--Shares in Empyrean Energy PLC (EME.LN) fell Wednesday
after the company said it has the ability to opt out of new wells
drilled at its flagship shale oil-and-gas project in Texas should
it need to manage its cashflow in a lower oil price
environment.
The U.K.-listed company said that drilling costs at the
Sugarloaf AMI project have fallen by 21% since 2014 and are
forecast to continue falling as a result of lower oil and gas
prices. The company noted it has the option to opt out of any new
wells drilled by the operator Marathon Oil Corp (MRO) if necessary.
The company said it may do this in order to manage cashflow should
oil prices remain low or should it fail to raise adequate funds to
cover its share of any additional drilling costs.
At 0807 GMT, Empyrean's shares were down 8% at 5.75 pence a
share, resulting in a market value of GBP13 million or $20
million.
The U.K.-listed company said its share of oil and gas production
from the flagship Sugarloaf AMI project dipped 0.5% on the quarter
to 108,849 barrels of oil equivalent in the second quarter. This
was due to disruptions and delays caused by major flooding in
Texas.
The company also said there were 231 gross producing wells at
Sugarloaf AMI at the end of June, 26 more than at the end of the
first quarter. Marathon also had another 58 wells in various stages
of completion as of the end of that quarter.
Sugarloaf AMI, which is 3% owned by Empyrean, raised its proven
reserves by 63% to 5.78 million barrels of oil equivalent and
increased its proven and probable reserves by 94% to 12.64 million
barrels of oil equivalent, according to an independent report
published on July 8.
The company said that it is still profitable despite the lower
oil and gas price environment.
Write to Alex MacDonald at alex.macdonald@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 02, 2015 04:59 ET (08:59 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Empyrean Energy (LSE:EME)
Historical Stock Chart
From Apr 2024 to May 2024
Empyrean Energy (LSE:EME)
Historical Stock Chart
From May 2023 to May 2024