Empire Energy Group Streamlines Operations, Focuses on Beetaloo Basin Gas Production

Empire Energy Group Ltd (ASX: EEG) has divested its US oil & gas assets for a total consideration of up to US$9.1 million, enabling a strategic shift towards its Beetaloo Basin gas development in northern Australia.

Significantly, the development company aims to mature its Northern Territory assets into production in 2025.

Empire is targeting its first gas sales from its Carpentaria Pilot Project in 1H 2025 with the scope to grow to LNG scale in the years ahead.

The sale proceeds will pay down Empire’s debt, previously a burden on its US operations with limited revenue generation (US$4 million EBITDA).

Empire will retain a 3.75% carried working interest in US shale formations, potentially benefiting from future development at minimal cost.

Focus on Beetaloo Basin

Empire will become a pure-play Beetaloo/McArthur Basin energy developer, capitalising on Australia’s growing gas demand to deliver gas into the undersupplied Australian East Coast market.

Empire holds the largest net acreage (~3 million acres) in the Beetaloo Basin, a highly prospective region with over 500 TCF of low-CO2 shale gas resources.

It has a 90% net revenue interest.

Development and Exploration Potential

The company’s Beetaloo acreage boasts significant contingent resources (1.65 TCFe) and prospective resources (46.6 TCFe), with existing infrastructure nearby to expedite commercialisation.

The Carpentaria Project (EP187) is Empire’s primary focus, targeting the first production in H1 2025.

The project holds a pilot-ready resource of 5 TCF, with the wider Western Beetaloo area offering over 20 TCF for further exploration.

Global Comparison

Empire’s Beetaloo landholdings are comparable in size to core areas of the productive US Marcellus Shale basin.

EQT Corporation (NYSE: EQT) is the largest U.S. gas producer with 1 million net acres in the Marcellus Shale. It also has a market cap of US$16.5 billion.

Empire’s streamlined operations and focus on the Beetaloo Basin position the company well to capitalise on Australia’s growing gas needs and potentially replicate the success of major U.S. shale producers.

Flow testing

Empire successfully appraised drilling and flow testing of the Carpentaria-2H and 3H wells in Empire’s EP187.

With that, Empire is targeting the first gas flow in H1 2025 at its Carpentaria Pilot Project.

The Pilot has a targeted sales gas rate of up to 25 TJ per day utilising the existing McArthur River Pipeline.

In summary, the repayment of the Macquarie debt facility is a major step forward toward its objective to be in production in 2025 in an “energy undersupplied” East Coast market of Australia.

Empire’s market valuation of $143 million with $17.3 million in cash on 31 December 2023 is extremely undemanding.

 

 

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