Empyrean Energy PLC Investor Update (4875Y)
May 17 2016 - 7:00AM
UK Regulatory
TIDMEME
RNS Number : 4875Y
Empyrean Energy PLC
17 May 2016
Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil &
Gas
17 May 2016
Empyrean Energy PLC ('Empyrean' or 'the Company')
Investor Update
Empyrean Energy PLC is pleased to provide an update to its
shareholders following the sale of its 3% interest in the Sugarloaf
AMI in Texas to Carrier Energy Partners II, LLC for up to US$71.5
million in February 2016 ('the Sale').
Sugarloaf AMI Sale and Taxation
Empyrean's US taxation agents have advised that the Company's US
Withholding Tax Certificate Application has now had an IRS contact
person assigned and the Company's US taxation agents are working
closely with the IRS contact to ensure all relevant additional
information required pertaining to the application is provided. The
Company will provide a further update as further confirmations are
received from the IRS. It is still the Company's intention to
proceed with a return to shareholders as soon as the US taxation
situation can be confirmed by the IRS. Currently, 15% of the
Sugarloaf AMI purchase price totalling US$10,725,000 is retained in
escrow for US withholding tax and the purpose of the Withholding
Tax Certificate Application is to have any surplus withholding tax
released back to Empyrean. The anticipated surplus has arisen
because Empyrean has US net operating losses that can be used to
offset its US tax payable.
Hedge Book Closeout
As previously announced, Empyrean took advantage of low WTI oil
prices during a period of high volatility and made a decision to
close out its entire hedge book with Macquarie Bank on 26 January
2016. The proceeds of the hedge book were used to retire debt with
Macquarie Bank in the amount of US$1,582,000. Pursuant to this and
the Sale, the Company has closed out its entire debt facility with
Macquarie Bank.
Conversion of US$ to GBPGBP
Following the receipt of initial Sale proceeds, the repayment of
primary debt to Macquarie Bank and the payment for other costs
associated with the Sale, Empyrean has converted US$17,000,000 into
approximately GBP12,000,000. The bulk of received US$ proceeds has
been converted as Empyrean has priority plans to complete a return
to shareholders in GBPGBP. The Board will consider the most
efficient manner in which to return these funds. Empyrean also has
a natural currency hedge with further payments in US$ from the Sale
along with surplus withholding tax expected to be due to the
Company in coming months.
Assignment of Sugarloaf Block A
Empyrean is also pleased to advise that it has completed the
assignment of all of its interest in the Sugarloaf Block A project
to ConocoPhillips with an effective date of 1 March 2016. The
assignment was completed with a consideration equal to all
outstanding joint expenditures owed to ConocoPhillips as at the
effective date. No funds were required to be exchanged to effect
the assignment. The assignment of Block A reduces Empyrean's cost
exposure and has a positive net effect for its US taxation return.
This tax effect has already been factored into the previous
announcements regarding the Sale of the Sugarloaf AMI and its
anticipated taxation consequences.
Corporate Costs
With the Sale of the Sugarloaf AMI now completed and the follow
up actions as described above well advanced, the Company is looking
to reduce unnecessary costs as it transitions from a producer/
explorer back to an explorer in the short term.
**ENDS**
For further information please visit www.empyreanenergy.com or
contact the following:
Empyrean Energy plc
Tom Kelly Tel: +618 9481 0389
Cenkos Securities plc (NOMAD)
Neil McDonald nmcdonald@cenkos.com Tel: +44 (0) 131
220 9771
Nick Tulloch ntulloch@cenkos.com Tel: +44 (0) 131
220 9772
St Brides Partners Ltd (Public Relations Adviser)
Hugo de Salis hugo@stbridespartners.co.uk Tel: +44 (0) 20 7236
1177
Elisabeth elisabeth@stbridespartners.co.uk Tel: +44 (0) 20 7236
Cowell 1177
Lottie Brocklehurst lottie@stbridespartners.co.uk Tel: +44 (0) 20 7236
1177
This information is provided by RNS
The company news service from the London Stock Exchange
END
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