Australia's Empire Energy sells US assets for $9.1mn

ASX-listed Empire Energy has reached an agreement to divest its oil and gas assets in New York State and Pennsylvania for $9.1mn, it announced on April 12. This move comes as Empire reorients its focus towards its Australian operations, particularly the development of its Beetaloo Basin assets.

Under the terms of the agreement, Empire will receive an upfront cash payment of $5.9mn and deferred payments totaling $3.2mn. Upon completion of the transaction, Empire's US Macquarie Bank credit facility will be repaid in full, with an additional $2.2mn in cash earmarked to support the advancement of its Beetaloo Basin assets in Australia.

Furthermore, Empire will retain a 3.75% carried working interest over shale formations in the US with minimal holding costs, it said. 

“Empire will be a pure-play Beetaloo / McArthur Basin focused developer while retaining a free carried interest in shale rights in the US at little to no cost to shareholders,” said Empire managing director Alex Underwood. 

In 2018, the company carried $38mn of debt against its US assets, supported by only $4mn of EBITDA. With this transaction, Empire achieves full repayment of its US debt.