Business
Investor Update and Withdrawal of Request from EGM
Investor Update and Withdrawal of Request from EGM.
About this update from Empyrean Energy Plc
[{"type":"text","content":"\n \nRNS Number : 9653C Empyrean Energy PLC 01 July 2016 \n\nEmpyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil & Gas\n1 July 2016\nEmpyrean Energy PLC (\"Empyrean\" or the \"Company\")\n \nInvestor Update and Withdrawal of Request from EGM\n \nEmpyrean Energy PLC is pleased to provide an update to its shareholders following the sale of its 3 per cent. interest in the Sugarloaf AMI in Texas (the \"Asset\") to Carrier Energy Partners II, LLC (\"Carrier\") for up to US$71.5 million in February 2016 (the \"Sale\").\n \nFollowing receipt of the initial proceeds of the Sale, as outlined in the Company's announcement of 22 February 2016, the Company has a current cash balance of approximately £11.6 million as at 29 June 2016. \n \nAs previously announced, an amount of US$10.725 million (being 15 per cent. of the anticipated maximum consideration of US$71.5 million and equivalent to approximately £8 million) is currently being withheld in respect of potential tax liabilities in relation to the Company's US operations, including the gain made on the disposal of the Asset. \n \nThe Company has submitted a Withholding Tax Certificate Application (the \"Application\"), which provides a detailed estimated assessment of the Company's actual tax liability, to the Internal Revenue Service (the \"IRS\") in the US and the amount included on the Application will, if accepted by the IRS, be paid to the IRS to meet the tax liability, with the balance of the amount held in escrow expected to be returned to the Company. The Company estimates the aggregate tax liability to be approximately US$3.5 million, with approximately US$2 million attributable to the initial purchase price of $61.5 million (the \"Initial Purchase Price\") and two possible payments of a further US$0.75 million attributable to each of the two contingency payments of up to US$5 million each (the \"Contingency Payments\"). The Contingency Payments to the Company are subject to the average strip pricing of light sweet crude oil (WTI) during 2016 and 2017. \n \nAccordingly, the Company estimates that the amount to be refunded to the Company following the payment of relevant taxes in the US will, subject to any reduced tax obligation in the event that either or both of the Contingency Payments are not made, amount to app...