Farmout Arrangement Entered F
05 May 2009
Empyrean Energy PLC
('Empyrean' or the 'Company'; Ticker: (EME))
Sugarloaf Project, ('Sugarloaf'), Block B, Texas USA
FARMOUT ARRANGEMENT ENTERED FOR BLOCK B
Empyrean Energy Plc, the oil and gas explorer and producer with assets in Germany and the USA, is pleased to advise that it has entered into arrangements with Texas Crude Energy Inc ('TCEI') to seek a farmout of up to half of Empyrean's 6% interest in Block B of the Sugarloaf Project which is part of the Sugarkane Gas and Condensate Field. TCEI is the operator of Block B and will lead the farmout effort with the assistance of Jefferies, Randall & Dewey, a leading US oil and gas advisor.
Empyrean will join some of the other joint venture partners in the Sugarloaf Project on Block B to contribute equity to this joint farmout effort which will result in sufficient equity being available to attract a significant E&P company or investor. It is envisaged that the incoming party will earn equity by carrying the farmout parties including Empyrean through a drilling and well stimulation work program in a timely fashion. Details of the terms of any farmout agreement reached will be advised at the time they are concluded.
Pending finalisation of the farmout arrangements, it is expected that field operations within Block B will be limited.
The arrangements that Empyrean has entered into do not include and do not affect Empyrean's interest in the 5 wells it has participated in on Block A. Work will continue on Block A irrespective of the farmout arrangements on Block B and the revenue percentages from those wells already on production on Block A will not be affected by the farmout arrangements on Block B.
A successful farmout and subsequent aggressive work program will generate significant momentum for the project, as well as allow the leasehold acreage position to be managed proactively.
Commenting today Empyrean Executive Director -Tom Kelly said 'Empyrean is pleased to have reached agreement to be part of the marketing effort to farmout its Block B interests. A successful farmout will give the best chance of unlocking the significant value for all partners that this major resource play offers. This will provide Empyrean with a solid platform for growth and the immediate relief from further Block B development expenditure, whilst production revenue builds, will allow us to focus on our other high impact projects and pursue other exciting opportunities'.
For further information
Empyrean Energy plc
Tom Kelly
Tel: +618 9321 6988
Blue Oar Securities Plc
Olly Cairns / Jerry Keen
Tel: (+61) 8 6430 1631 / (+44) 207 448 4400
This information is provided by RNS
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