THE BOWSER: Empire Energy Group (ASX: EEG) announced it has reached a deal with Mai Oil Operations, Inc for the sale of the company’s Kansas assets for US$19.1 million.
Empire Energy Group said the sale proceeds will principally be used to retire debt to a maximum remaining gross debt balance of US$8 million, while retaining a proportion from the sale proceeds for working capital and continued investment in Empire’s core Northern Territory shale assets.
The company expects the sale will enable it to retain cash flow positive production from its New York State and Pennsylvania gas production assets and the substantial upside potential of its Marcellus Shale and Utica Shale rights in New York State.
The sale is expected to complete in Q3 2019.
“The sale of the Kansas assets represents a key milestone in the execution of Empire’s strategy to build value for shareholders through the reduction of debt and the continued focus on exploration and development in the McArthur and Beetaloo Basins,” Empire Energy Group chief executive officer Alex Underwood said in the company’s announcement to the Australian Securities Exchange.
“Over the last year management and the Board have concentrated their efforts on the active repair of Empire’s balance sheet to favourably position the company for growth in the McArthur and Beetaloo Basins.
“The execution of a recapitalisation and debt reduction program, as well as the Kansas asset sale has enabled us to substantially reduce debt and increase our working capital position ahead of the exploration and development program in the Northern Territory.”