Empyrean gives up Sugarloaf
HOUSTON, January 19, 2016 – Empyrean Energy will divest from the Sugarloaf AMI, the US exploration and production company announced Tuesday.
The company has entered into a conditional agreement with US Carrier Energy Partners to purchase its 3% stake. The firm will purchase the share for an initial USD 61.5 million, and an additional contingent consideration of up to USD 10 million.
“This transaction crystallises the value of the Sugarloaf AMI Project at a time when there are significant challenges facing the resources sector in general and, specifically, when the additional financing required to support the company’s continued participation in the development of the asset in the current low oil price environment would incur either an unacceptable cost or unacceptable dilution when compared with the transaction,” Empyrean CEO Tom Kelly stated in a press release.
The Sugarloaf AMI development is located in the Eagle Ford Shale play covering an area of around 98 sq.km. The onshore hydrocarbons development is operated by US company Marathon Oil. Estimates have suggested that the area will take around 300 wells to fully realise the asset’s 3.54 million boe proven reserves.
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