Empyrean Energy PLC Hedging contracts with Macquarie Bank Limited (6055J)
April 08 2015 - 5:45AM
UK Regulatory
TIDMEME
RNS Number : 6055J
Empyrean Energy PLC
08 April 2015
Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil &
Gas
8 April 2015
Empyrean Energy PLC ('Empyrean' or 'the Company')
Hedging contracts with Macquarie Bank Limited
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,
further to the recent announcement of additional debt financing
with Macquarie Bank Limited ('Macquarie') under Tranche B of its
existing facility (the 'Facility'), it has entered into a hedging
programme in relation to a portion of its expected production from
its flagship Sugarloaf AMI Project in onshore Texas ('Sugarloaf' or
the 'Project'). The hedging programme fulfils Macquarie's
requirements for the recent drawdown under the Facility.
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').
Empyrean has entered into a Commodity Swap Transaction (the
'SWAP') with Macquarie for an aggregate of 97,371 barrels of oil
('bbl') for a period of 12 months commencing 1 April 2015 through
to 31 March 2016. The SWAP is for a fixed price of US$51 per bbl
based on OIL-WTI-NYMEX ('WTI'). For each monthly calculation
period, if the hedged price exceeds the floating price or spot
price for WTI, Macquarie shall pay Empyrean the difference
multiplied by the relevant notional quantity for the calculation
period. If the floating price or spot price exceeds the hedged
price, Empyrean shall pay Macquarie the difference multiplied by
the relevant notional quantity for the calculation period.
In addition, the Company has entered into put and call option
arrangements (the 'Options') with Macquarie to effect a collar in
respect of an aggregate of 102,469 bbl for a period of 24 months
commencing 1 April 2016 through to 31 March 2018. Pursuant to the
Options, the price attributable to the relevant portion of
production will not fall below US$50 per bbl and not exceed
US$62.80.
The SWAP and the Options were each negotiated on 1 April 2015
and confirmed on 2 April 2015 and, in each case, the quantity of
production which is subject to the arrangements decreases on a
monthly basis through to the expiry of the relevant arrangement,
allowing the Company to benefit from any recovery in underlying
commodity prices.
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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