Quarterly Activities Report
Highlights of the Quarter include:
- Empire is actively progressing its work programs while reducing all non-essential expenditure to make best use of the company's cash and maintain a stable balance sheet
- Enhanced interpretation of recently acquired Beetaloo Basin 2D seismic data confirms that Empire holds a material Beetaloo Sub-Basin acreage and resource position geologically continuous with the strata of adjoining operators
- Northern Territory Government Ministerial consent for the drilling of Empire's first well in EP187, 'Carpentaria-1', has been received. Approvals are valid for 2 years
- Timing for drilling remains fluid given evolving COVID-19 situation. The company is committed to progressing its work programs while maintaining the health and safety of local communities, including Traditional Owners, on whose land Empire operates
- Agreement with Macquarie Bank (lender and major shareholder) regarding credit terms in the company's credit facilities for all quarterly financial covenant tests until 31 December 2020 (inclusive)
- US Appalachia business operations well hedged for gas price exposure
During the Quarter, major operators in the Beetaloo-McArthur Basin reported material developments. Santos confirmed a gas discovery in EP161 after successfully flow testing the Middle Velkerri B and booked a maiden contingent resource of 22 mmboe. Origin Energy announced that it had agreed to acquire an additional 7.5% working interest in its Beetaloo Basin tenements from its joint venture partner, Falcon Oil & Gas, implying a look through valuation for those properties of A$333m.
Comments from Managing Director Alex Underwood: "The economic impact of COVID-19 and the flow on effects to oil & gas markets over the course of 2020 has been dramatic, characterised by significant global oversupply of oil and corresponding low commodity prices, and reduced equity valuations for upstream oil and gas companies including Empire. In the face of this, Empire is well placed to emerge strongly once economic conditions improve. Following actions taken in 2019 to substantially reduce debt and increase cash holdings, we have recently taken further steps to protect our balance sheet, and we are minimising non-essential expenditure to preserve our cash holdings. This report details for you the high level of activity being sustained internally in readiness for when Empire emerges into a reactivated economy. With volatility comes opportunity, and Empire's expanded technical and management team has been working to hold and build momentum. A solid platform is being established to prepare for a recommencement of Beetaloo-McArthur Basin work program activities by Empire and its neighbours in the periods ahead."
*To view the full quarterly report, please visit:
About Empire Energy Group Ltd
Empire Energy (ASX:EEG) (OTCMKTS:EEGUF) holds over 14.5 million acres of highly prospective exploration tenements in the McArthur and Beetaloo Basins, Northern Territory. Work undertaken by the Company since 2010 demonstrates that the Eastern depositional Trough of the McArthur Basin, of which the Company holds 80% has very considerable conventional and unconventional hydrocarbon potential. The Beetaloo sub-Basin, in which Empire holds a substantial position, has independently assessed world class hydrocarbon volumes in place with a major ramp up in industry activity underway to appraise substantial discoveries already made by major Australian oil and gas operators.
Empire Energy is an experienced conventional oil and gas producer with operations in the Appalachia region (New York and Pennsylvania). Empire has been successfully developing and producing oil and gas since 2006.
Empire Energy Group Ltd