Empyrean Energy PLC on Tuesday said its annual loss has narrowed alongside a fall in expenses, as the company negotiates a sell-down process in Indonesia and a contract termination with a Chinese state-owned firm.
The London-registered oil & gas exploration and production company is focused on three assets in China, Indonesia and California, US. It said it has narrowed its pretax loss for the year ended March 31 to $9.6 million from $20.8 million year-on-year, as total expenses for the year dropped 56% to $7.8 million from $17.8 million.
In particular, impairment expenses related to exploration and evaluation assets fell 61% to $6.6 million from $17.0 million the year before.
The company reported no revenue, unchanged from last year.
During the year, Empyrean engaged Jeffries International Bank Ltd to lead a sell-down process for the divestment of a portion of its 8.5% interest in the Indonesian Duyung production sharing contract, or PSC. The company said the process was taking ‘longer than expected’, but that a long-term export gas sale agreement signed in August with Conrad Asia Energy Ltd, West Natuna Exploration Ltd and Sembcorp Ltd was a ‘necessary precursor’ to completing any sell-down negotiations.
With regard to the company’s work in China, Chief Executive Officer Tom Kelly said: ‘Empyrean has conducted systematic and thorough exploration on Block 29/11 since commencing its cooperation on the block with China National Offshore Oil Corp in late 2016. This included 608 kilometres of 3D seismic, the drilling of the Jade exploration well and various post well analyses including regional oil migration and simultaneous seismic inversion studies. Despite these works, and due in part to various market challenges, including Covid, Empyrean has not been able to fund a second exploration well on Block 29/11.
‘As announced on June 13, Empyrean has not commenced the drilling of the Topaz prospect and therefore has not met the requirements to continue the cooperation on Block 29/11 with CNOOC and the permit therefore formally terminated on June 12. On August 24, Empyrean received a letter of demand from CNOOC alleging that Empyrean has outstanding obligations under the production sharing contract, or PSC. The company disputes this letter and is endeavouring to settle the matter amicably.’
No work was conducted on the company’s Sacramento Basin project in California during the year.
Shares in Empyrean Energy were down 4.0% at 0.29 pence each in London on Tuesday morning.
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