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Empire Energy Group To Bank A$1.1M From Option Exercise

Empire Energy Group (ASX: EEG) will receive A$1.1 million in additional funds with Macquarie Bank planning to exercise around 6.7 million options at $0.165 each.

Following the exercise of the options, which had a maturity date of 22 December 2012, Macquarie Bank's shareholding will increase to 17.6%, from 15.76%.

Macquarie Bank has also advised Empire it does not intend to exercise a further 6.7 million options exercisable at $0.18, also expiring on 22 December 2012.

Empire implemented a US$100 million credit facility with Macquarie Bank in early 2008 for the sole purpose of acquiring and developing oil and gas assets in the U.S.

This facility has been increased to $150 million with around $50 million of the debt facility currently drawn.

Empire holds acreage positions in the Appalachian Basin, the Central Kansas Uplift and the McArthur Basin.

In the Appalachian Basin, the company holds 287,300 gross acres (99% working interest) and is currently producing conventional gas.

There is a significant unconventional opportunity in both the Marcellus and Utica Shale.

Empire holds around 220,000 acres of Marcellus Shale and 180,000 acres of Utica Shale in western New York State and Pennsylvania.

Meanwhile, the company has an acreage position of 18,000 gross acres (96% working interest) on the Central Kansas Uplift, where it is currently producing oil.

Total combined 2P reserves for Empire's Appalachian and Central Kansas Uplift operations are estimated at 14.8 million barrels of oil equivalent.

In addition, the company has exploration licence applications over 14.6 million acres in the McArthur Basin of the Northern Territory, which is considered prospective for oil and gas shale.

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