Australia's Empire Oil & Gas NL reported Thursday that it has taken another key step in its strategy to unlock the value of its Perth Basin assets, signing an indicative agreement to sell its remaining acreage in Western Australia’s onshore Carnarvon Basin.
Empire will sell its subsidiary company, Rough Range Oil Pty Ltd. that holds its remaining six Carnarvon Basin tenements to Bounty Oil & Gas NL for a small cash sum and royalty based payments on future production. Interest in these tenements range from 36 percent to 90 percent and the sale will enable Empire to focus on unlocking shareholder value in the Company’s flagship assets in the Perth Basin, where it has the Red Gully Gas and Condensate project and is the biggest land holder.
Empire’s exit from the onshore Carnarvon Basin will allow the company to focus all future drilling funds on the Perth Basin, while retaining potential upside to exploration success and future production on the Carnarvon tenements via a royalty right.
The strategy to unlock the value of the Perth Basin acreage is the key reason why Empire is seeking to buy ERM Power’s WA gas joint venture interest. The divestment of the onshore Carnarvon Basin assets will see Empire complete its transition to a solely focused Perth Basin producer and explorer.
Under the deal, Empire will sell its 100 percent-owned subsidiary, Rough Range Oil Pty Ltd., which holds the Carnarvon Basin tenements, to Bounty. The sale is subject to the execution of a Share Purchase Agreement.
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