Business
Proposed Disposal of Sugarloaf for up to US$71.5M
Proposed Disposal of Sugarloaf for up to US$71.5M.
About this update from Empyrean Energy Plc
[{"type":"text","content":"\n \nRNS Number : 1480M Empyrean Energy PLC 18 January 2016 \n\nEmpyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil & Gas\n18 January 2016\nEmpyrean Energy PLC (\"Empyrean\" or the \"Company\")\n \nProposed Disposal of Sugarloaf AMI Project for a Consideration of up to US$71.5 million\n \nEmpyrean Energy PLC (AIM: EME.L), the profitable US onshore oil, gas and condensate exploration, development and production company with assets in Texas and California, is pleased to announce that it has entered into a conditional purchase and sale agreement (the \"PSA Agreement\") with Carrier Energy Partners II, LLC (\"CEP II\"), a Delaware corporation, to dispose of all of its right, title and interest in the Sugarloaf AMI development (the \"Sugarloaf AMI Project\" or the \"Asset\") for an initial cash consideration of US$61,500,000 (the \"Purchase Price\") (the \"Transaction\"). The Company may also receive, in certain circumstances further set out below, a contingent consideration of a maximum of US$10,000,000. Empyrean currently has a 3% working interest in the Sugarloaf AMI Project, which is operated by Marathon Oil Company, a subsidiary of US major Marathon Oil Corporation (NYSE: MRO) (\"Marathon\" or the \"Operator\"). CEP II is a Houston, Texas based private oil and gas company focused on the acquisition and exploitation of upstream assets. Backed with an equity commitment from Riverstone Holdings LLC, its primary objective is to partner with select operators that are developing both unconventional and conventional reservoirs in North America.\n \nSubject to Closing, the Transaction has an effective date of 1 October 2015 (the \"Effective Date\") and is expected to close in the first quarter of 2016. Following the Transaction, the Company's portfolio will comprise a 58.084% working interest (\"WI\") in the Eagle Oil Pool Development Project, located in the San Joaquin Basin in southern California; a 7.5% WI in two producing wells and lesser interests in another six producing wells located in the Sugarloaf Block A operated by ConocoPhillips and; a 10% WI in the Riverbend Project, located in the Tyler and Jasper counties, onshore Texas, further details of which are outlined below.\n \nThe value of the Transaction means that at, and subject to, Closing, the Transaction woul...