Empyrean Energy PLC (AIM:EME) told investors it has successfully completed an oversubscribed share placing, to raise £1.52 million, as the company awaits the resolution of negotiations over the Mako gas sales agreement (GSA).
At the same time it has agreed changes to its borrowings, with a convertible loan note restructured.
Binding terms are anticipated for the Mako GSA by ‘late Q2’ the company said, whilst start of gas ‘sell down’ could follow by the ‘early Q3’, it added.
Mako is located within the Duyung PSC, offshore Indonesia, and the AIM-quoted company retains an 8.5% interest in the project.
The project host an estimated 430 to 650 billion cubic feet of recoverable gas resources, and, previously, the successful Mako South 1 well showed excellent reservoir quality and in testing flowed at a stabilised rate of 10.9 million cubic feet of high quality gas per day. A development plan was agreed in 2019 and the project has subsequently awaited a GSA in order to set commercial terms for the monetisation of the gas resources.
As the project is now on the cusp of advancing, Empryean has sought to bolster its capital position.
"Empyrean is very pleased with the outcome of this capital raising and is grateful for the continued support from its shareholders,” said chief executive Tom Kelly.
“We now look forward with great interest to the conclusion of Gas Sales Agreement negotiations and to developments on the sell down process of the Mako Gas Field.
“The macro environment for gas in South East Asia, and Singapore in particular, is expected to continue trending favourably with the region transitioning from coal to gas as the preferred energy source.
“Energy demand and gas demand are both forecast to continue to grow.”
Empyrean has issued some 189bn new shares priced at 0.8p each in a placing to raise close to £1.51 million of gross proceeds.
Funds raised will also support the company’s separate exploration venture in China, the Topaz prospect, where a 3D seismic inversion project seeks get underway soon to discriminate light oil from water in data.
“In China, we will use the very latest technology to further de-risk the very large 890 million barrel (P10) target at Topaz,” Tom Kelly added.
“Following success on the regional oil migration study and 3 seismic inversion project, we will continue our preparations for drilling within the November-May 2024 drilling weather window."