Empire Energy Group has finished the June quarter in a strong financial position after locking in more than $3 million in sales, a successful $27.5 million capital raise and almost $5.5 million in exploration grants.
The ASX-listed oil and gas company closed the financial year with more than $45 million in the tin, with the goal of becoming the first commercial producer in Northern Territory's Beetaloo sub-basin.
It raised an additional $2.5 million through a fully underwritten share purchase plan.
Supported by strong Henry Hub gas prices, Empire’s US operations reported a positive EBITDA of US$1.5 million for the quarter, up from US$0.6 million in the previous period.
Receipts from customers were more than $3.3 million, compared with $2.5 million during the March quarter.
Empire subsidiary Imperial Oil and Gas has three replacement grant agreements with the Federal Government under the Beetaloo Cooperative Drilling Program.
Total grant funding of up to $19.4 million will be provided by the Government, which will offset 25 per cent of the cost of seismic acquisition and the drilling, hydraulic stimulation and flow testing of three horizontal wells.
During the quarter Empire received progress payments from the Government totalling $5.4 million.
Empire Energy Group Managing Director, Alex Underwood said: “The capital raised and the receipt of Beetaloo Cooperative Drilling Program funds has put the company in a strong financial position, allowing us to roll out the most active work program in our history.”
The company’s strong cash position coincides with the appointment of new Chief Financial Officer, Robin Polson that was announced this week.
Empire says Polson has extensive knowledge of the gas industry and the NT gas markets in particular and brings more than 20 years of industry experience to the company.
It has been a busy month for Empire after it started the much-awaited fracking at its Carpentaria-2H well, or “C-2H”, the longest horizontal well drilled in the Beetaloo sub-basin.
Empire is testing a number of frack fluid mixes to discover which design will achieve the best production performance as it pioneers frack completion permutations specific to the Beetaloo Basin.
The C-2H well production test will provide an early production-type curve and a better understanding of gas composition in developing a full field development plan, including processing and gas handling facilities.
With the east coast of Australia currently facing a severe gas shortage in addition to an ongoing tight gas market around the globe, Empire’s work in the Northern Territory will be watched closely.
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By Matt Birney
