Empyrean Energy PLC (AIM:EME) has announced a £1.12 million fundraise that sets the scene for a reboot of the company.
The AIM-quoted firm is raising funds through a share placing, arranged by CMC Markets, along with an additional £250,000 retail offer.
It comes alongside news of a potential new project in Australia’s Cooper Basin. The opportunity, the Wilson project, could see the firm secure some 8.7 million to 37.4 million barrels of prospective oil equivalent resources in a conventional exploration project located near existing infrastructure.
Empyrean can secure an option to earn a 40% stake in the Wilson project through the transaction with Apnea Holdings, a vehicle owned by Empyrean CEO Tom Kelly. The deal would see new shares equating to 5% of the company issued to Apnea if a discovery is declared at the project.
After acquiring the option from Apnea to earn the 40% stake in the project, Empyrean would need to cover two-thirds of the cost of an exploration well (estimated at around A$2.8 million gross) in order to earn the 40% stake in the project.
Empyrean noted that its potential partners in the venture are currently in negotiations over a rig contract and the balance of the drill funding.
As well as being a related-party transaction, the proposal will go to a shareholder vote as the funding requires a capital reorganisation – a share split, creating a line of deferred shares, is set to change the nominal value of Empyrean’s equity in order to facilitate the raise.
Today’s CMC-arranged equity funding sees Empyrean issued new shares priced at 0.1p each, compared to Tuesday’s closing price of 0.17p.
Empyrean noted that advanced discussions are being held over the Apnea deal, with the key commercial terms agreed upon in principle, and it will now be subject to customary due diligence and the negotiation of legally binding documentation.