Small cap oil exploration and production company Empyrean Energy (EME:AIM) slips 1.8% to 2.21p as it discusses plans for 2017 alongside first half results.
TRANSFORMATIONAL PERIOD
This time 12 months ago Empyrean was a US focused producer with a 3% stake in the large Sugarloaf field in Texas. Early in 2016 the group agreed the sale of this asset to private equity group Riverstone for $71.5m.
Once debt and outstanding payments to its partners were made the company returned £17.5m to shareholders in November. Earlier this month the company was awarded a permit for 100% of the exploration rights on Block 29/11 in the Pearl River Mouth basin offshore China.
This is quite the departure, from a tiny stake in a non-operated onshore field in the US to 100% of an offshore exploration asset.
SEISMIC SHIFT
The company still has enough cash left from the Sugarloaf sale to fund its work programme over the next two years. This will mainly involve shooting 500 square kilometres of 3D seismic. Two exploration prospects, Jade and Topaz, have already been identified using 2D seismic.
The block is located 200 kilometres south east of Hong Kong in seabed depths ranging from 340 metres to 600 metres and directly to the south of an already producing field.
Topaz Energy introduced the opportunity to Empyrean and its principal, Gaz Bisht, will work alongside the company to implement the planned work programme. In return Topaz will get around £1.4m in cash or 70m EME shares at c.2p subject to an EGM.
