Empire Energy Group Limited (EEG.ASX) is a junior oil and gas producer and explorer with onshore Northern Territory and US oil & gas assets. EEG has announced a transformational deal to acquire an operated 82.5% interest in five tenements across the Beetaloo Sub-Basin in the Northern Territory. The acquisition, with an estimated value of $54.7m (based on yesterday’s close), will more than double EEG’s Prospective Resource to 41 TCFe, comprising 37 TCF gas and 657 MMbbls liquids (condensate and oil). Empire’s 2C Contingent Resources have increased more than 350%, comprising 170 BCF gas and 2.9 MMbbls liquids. The liquids offer the potential to substantially enhance the economics of future production via lower drilling costs and liquids “credits”. The vendor, Pangaea (NT), will be issued 140m shares in EEG, $5m cash and 8m unlisted options with an exercise price of $0.70/share. Pangaea’s controlling shareholder, Paul Fudge, a pioneer of Queensland’s coal seam gas industry, will join EEG’s board. The deal is subject to EEG shareholder and NT Government approvals, with an expected completion of June 2021. EEG is in a trading halt, pending the outcome of a capital raising (estimated at $30m) to fund the acquisition and future drill program. Details of the capital raise are yet to be released.
