Empire Energy Group (ASX: EEG) will receive a cash injection of around A$1 million which will be used to repay existing debt after Macquarie Bank (ASX: MQG) notified the company that 6.7 million $0.15 options would be exercised.
The options have a maturity date of June 22, with the move by Macquarie a major vote of confidence in Empire Energy's operations.
Macquarie will now hold a 15.76% stake, up from 13.84%.
Empire Energy 10 well program
Empire Energy continues to work on its 10 well program aimed at increasing oil production at its Central Kansas Uplift project.
Each of the 10 wells targets production of 30 to 40 barrels of oil equivalent per day with ultimate recoveries of more than 50,000 barrels of oil.
Further production and reserves upside could come from the 16 proved developed non-producing wells to be reworked, 31 proved undeveloped drilling locations and 56 probable locations.
The company is also waiting on New York Department of Environmental Conservation to give the green light to once again issue permits for fracture stimulation, allowing it to unlock the Marcellus and Utica shales in the State that have estimated resources of more than 70 million barrels of oil and 5 trillion cubic feet of gas in place respectively.
Empire Energy has also formed a partnership with the University of Adelaide's Kennedy Research Group (NYSE:KRG) to develop a hydrocarbon system model that is capable of extending predictions of source rock and shale oil and gas potential in the McArthur Basin, Northern Territory.
These studies will focus on identifying the most prospective areas for shale oil and gas drilling, through available data and the generation of critical information.
Prospectivity maps produced from the studies will be used to guide site location for the initial exploration wells, which are expected during 2012.
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