Empyrean Energy PLC (AIM:EME, FRA:E1E) shares rocketed on Friday with the news that it had signed a binding term sheet with Conrad Asia Energy to settle a cash call dispute - and as a result, the AIM-quoted firm can retain economic exposure to the Mako Gas Field, and the Duyung PSC in Indonesia, without future direct cash call obligations.
The small-cap energy firm also said first gas from Mako is currently targeted for Q4 2027.
“This is an outstanding outcome for Empyrean and a pivotal step forward for the company.
"We have retained our ongoing economic exposure to a high-quality gas development with a clear pathway to first gas targeted for the fourth quarter of 2027, while eliminating future direct cash call obligations associated with field development.”
To enact the new arrangement Empyrean and Conrad will establish a Singapore-domiciled special purpose vehicle, with 8.5% held by Empyrean and 91.5% by Conrad, which will in due course hold a 25% interest in the gas asset, after a farm-out to a majority partner.
Empyrean also agrees to pay US$353,388.50 to Conrad, representing 50% of disputed outstanding cash calls, whilst a further US$353,388.50 will be paid to Conrad from Empyrean’s share of future SPV dividends.
The firm said settlement of these two payments will represent full and final settlement of all past claims that WNEL and Conrad may have against Empyrean.
In London, Empyrean's shares were up more than 200% in Friday morning's trade, at 0.11p.