Empire Energy announced that on September 30, 2009 its wholly owned subsidiary, Great South Land Minerals, Ltd. lodged a license application with Mineral Resources Tasmania as permitted under Tasmanian Legislation and provided additional information regarding financial capacity requested by MRT in support of an existing application. The new application is to establish an Exploration License (EL) over the significant discoveries contained within the key seismically defined structures originally covered by Special Exploration License 13/98 that was set to expire. The new application area is reduced approximately 50% but includes all the RPS identified P3 prospective resources which were identified as a result of our over $50 million expenditure, meeting license conditions over the past ten years. The existing application is a Special Exploration License (SEL) for approximately 11,000 sq km including eastern Tasmania and shallow offshore areas. Included with the applications was information that Empire exceeds the $50 million asset test and in addition has, or is likely to have, sufficient financial resources to carry out the proposed work programs, including the announced rights offering. Empire believes its past performance of meeting or exceeding the work requirements of SEL 13/98 should automatically qualify it to be granted the new licenses.
As prerequisite part of preparation of the applications, GSLM obtained a valuation of the resource identified by the exploration and evaluation work performed over the past ten years. RPS Energy Ltd, one of the world's leading Independent Expert suppliers of oil and gas evaluations, prepared a Competent Persons Report indicating that the mean P3 oil and gas prospective resource contained within the structures identified by our geophysical and seismic work was 668 million barrels. WHK, one of the top accounting firms in Australia calculated the P3 prospective resource value of $3.3 Billion US at a current market valuation price of $5 per barrel. The Tasmanian properties have equivalent counterparts in mainland Australia that have established this value on recent P3 sales. The indicated valuation is the product of the discounted price used to calculate P3 prospective resource values in the current market.
The RPS Energy Ltd indicated P3 mean prospective resource of 668 million barrels, calculated by using "probabilistic" methods, which if verified and produced at today's price of $68 per barrel, could represent potential revenue of $45 billion contained in structures discovered by our 1,400 km of seismic work.
Empire CEO Malcolm Bendall commented, "The P3 evaluation of RPS Energy Ltd., contained within their competent persons report was used by WHK, one of the leading accountancy firms in Australia. The resultant valuation of $3.3 billion confirms our findings and belief developed over these past ten years through our diligent work and significant $50 million investment meeting the license condition. The value of the P3 resource included in these structures is outstanding. The indicated asset value of the resource alone exceeds $10 for every share of our common stock currently outstanding. Completion of our Rights Offering should allow all rights holders to participate further as we work to increase this value through drilling to take our P3 resource to P1, P2 and P3 resources and reserves. I am excited by the prospect of mobilizing the Hunt Energy drilling rig, currently stored in Tasmania, to resume drilling on the Bellevue site. Hunt Energy currently holds 20 million shares of Empire common stock that was included in the recent registration statement."
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