Empire Oil & Gas reported Thursday an increase in proven gas and condensate reserves for the B Sand of the Red Gully-1 well, in Production License-18 in the Northern Perth Basin, Australia. This follows an independent resource evaluation report prepared by RISC in accordance with the Society of Petroleum Engineers Petroleum Resources Management System (SPE-PRMS).
The Red Gully-1 B Sand has been in production for approximately 7 months. The table below summarizes the changes to the Red Gully B Sands Gas Reserves as of Jan. 1.
Red Gully B Sand Gas Reserves Petajoule (100 percent)
*Based on RISC’s independent technical specialist report (November 2014) included in KPMG’s Independent Expert Report Nov. 3, 2014.
CEO Ken Aitken said “The significant increase in Red Gully reserves is excellent news and justifies Empire’s belief in Red Gully and its purchase of ERM’s 23.61 percent interest in the Red Gully project.”
This 2P reserve upgrade provides the Board with increased confidence that the Red Gully B Sand has more than sufficient reserves to cover Tranche 2 of the Alcoa contract.
In a separate announcement Thursday, Empire reported that it has agreed with ERM Power to extend the conditions date of the companies’ transaction to Feb. 13.
This will provide additional time to complete the various procedural matters associated with the transaction, including final approval from the Western Australia (WA) Department of Mines and Petroleum.
Under the terms of the transaction approved by Empire shareholders Dec. 11, 2014, Empire will acquire ERM’s WA gas assets, including its stake in the Red Gully gas and condensate project.
To assist in managing its short term cash requirements, Empire has agreed with ERM to amend the terms of the ERM Credit Facility by changing the Facility Limit to $1.2 million (AUD 1.5 million) and extending the terms to the earlier of March 31, 2015 or completion of the proposed pro-rate share issue. As of the date of this release, Empire has requested $202,450 (AUD 250,000) to be drawn down against this Facility.
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