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Empire Energy Group to reduce debt by A$1.7 million following the exercise of options

Empire Energy Group (ASX: EEG) has raised A$1.7 million through the exercise of 6.67 million options at $0.12 each by Macquarie Bank which the company will use to reduce existing debt.

Macquarie Bank will increase its shareholding in Empire Energy from 9.74% to 13.84%.

Empire Energy executive chairman Bruce McLeod said the exercise of the out of the money options strongly confirms the underlying value of the company and its USA operating subsidiary.

“With operations generating strong cash flow and the shale drilling moratorium in New York State expected to be resolved early 2012, each provides a strong platform to further expand oil and gas operations in the USA,” he said.

In December, the New York State Department of Environmental Conservation revealed that it is expected to finish its review of high-volume hydraulic fracturing in the State by March 2012.

The Department of Environmental Conservation’s current position is that the controversial drilling technique can be done safely, with strict regulations, which means, importantly for Empire Energy, drilling permits for hydraulic fracturing could quickly follow.

The department imposed a formal suspension on oil and gas drilling using the high-volume hydraulic fracturing method in New York in December last year.

In July, the State announced the suspension had ended following the release of recommendations for shale development and production.