Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) has secured a milestone A$65 million financing package with Macquarie Bank for development of its Beetaloo Basin operations in the Northern Territory of Australia, including the Carpentaria-5H (C5H) well, Carpentaria Gas Plant and infrastructure required to service it.
A $30 million research and development facility will support exploration, appraisal and development activities, including drilling C5H and construction of infield infrastructure, via an upsize and maturity extension of an existing $2.25 million facility.
An additional $5 million performance bond facility will meet Empire’s Northern Territory environmental bonding obligations and a further $30 million midstream infrastructure facility will finance refurbishment and construction of the Carpentaria Gas Plant and associated infrastructure.
Key milestone in meeting gas demand
“The financing package with Macquarie announced today followed an extensive competitive tender process and provides Empire with the best terms currently available in the debt market,” Empire Energy managing director Alex Underwood said.
“Macquarie has been financing Empire Energy for 15 years. This financing package, along with existing cash resources, will fund the drilling, completion and flow testing of C-5H and the installation of the Carpentaria Gas Plant and associated in-field infrastructure.
“This represents a key milestone in Empire’s stated goal to move into pilot production from the Beetaloo Basin commencing in 2025 to meet demand for gas in the Northern Territory and, ultimately, Australia’s supply-constrained East Coast market.
“The terms of the financing package demonstrate Macquarie’s innovative approach to provision of capital to the upstream oil and gas industry, with significantly reduced dilution of shareholders’ interests in the company compared to raising additional equity capital for the Carpentaria Pilot Project.”
The company's war chest has also grown to $34.8 million after receiving $1.3 million from the Australian Taxation Office for September 2024 business activity statements.
C-5H well progress
The surface section of the C-5H well has been successfully drilled and cased, effectively isolating the Cambrian Limestone Aquifer.
Empire is currently drilling ahead in the vertical section of the intermediate hole at a depth of 770 metres MD.
The well path will soon begin building and turning towards the Middle Velkerri B shale target interval.
After the intermediate section is drilled and cased, Empire will drill and case the horizontal section.