POST Online Media Lite Edition


Empyrean Energy to sell interest in Sugarloaf AMI shale oil

Staff writer |
Empyrean Energy has agreed to offload its 3% interest in the Sugarloaf AMI shale oil development for up to $71.5 million in cash to Riverstone Holdings vehicle Carrier Energy Partners II.

Article continues below

Empyrean will receive an initial $61.5m cash on the close of the Sugarloaf deal, which is expected in the first quarter of 2016 but will first require a shareholder vote that will be scheduled soon, with the amount possibly rising by up to a further $10m depending on how the price of crude oil behaves in the coming two years.

If the average price of WTI crude rise above $55 in the first or second half of 2016, CEP II will pay Empyrean an extra $1m for every whole dollar in excess of $55 per barrel up to a maximum of $5m.

Even if WIT does not recover in 2016, a second contingency applies to 2017 with a WTI price of $60 per barrel.

Following the deal, Empyrean will be a debt-free entity, have a robust level of working capital and a portfolio that will comprise a 58.1% working interest in the Eagle Oil Pool development project in southern California.[break]

Empyrean will have a 7.5% working interest in two producing wells and lesser interests in another six producing wells located in the Sugarloaf Block A operated by ConocoPhillips and; a 10% working interest in the Riverbend project in Texas.

What to read next

Ineos offers $1 billion to drill hundreds of shale gas wells
BP eyes shale gas exploration in China
Sinopec makes major deep shale gas discovery