Empire Energy Group Ltd (ASX: $EEG) divests US oil & gas assets

Empire Energy Group Ltd (ASX: $EEG) has entered an unconditional agreement to sell its US oil & gas assets located in the Appalachian region for up to US$9.1 million. The sale includes an upfront cash payment of US$5.9 million and contingent and solar deferred payments of US$3.2 million. Upon completion, Empire's US Macquarie Bank credit facility will be repaid in full, and post-completion, US$2.2 million in cash will be available to support the development of Empire's Beetaloo Basin assets. Empire will retain a 3.75% carried working interest over shale formations with negligible holding costs. The completion is expected to occur by 5pm US Eastern Time on Friday, 12 April 2024, after which Empire will be a 'pure-play' Beetaloo / McArthur Basin player listed on the ASX.

Managing Director's Comments on US Asset Divestment

The Empire team is delighted to have successfully executed its US asset divestment program. Empire will be a pure-play Beetaloo / McArthur Basin focused developer while retaining a free- carried interest in shale rights in the United States at little to no cost to shareholders. In 2018, Empire was carrying US$38 million of debt against its US assets, supported by only US$4 million of EBITDA to service that debt. Empire sold its Kansas assets in 2019 which reduced the US debt, and this transaction results in full repayment of the US debt and return of over US$2 million in cash to support Empire's Beetaloo-focused strategy. Empire's Board and management thank our US employees for their loyal service over the years and we wish them the best. Empire can now focus its full attention on the development of the world class Beetaloo Basin, which in the success case will provide the people of the Northern Territory with sorely needed energy security and employment, royalty income to the Northern Territory Government, deliver large volumes of gas into the chronically undersupplied Australian East Coast market, and provide energy security for the broader Asian region via LNG export.

Summary of Empire's US Asset Divestment

Empire Energy Group Ltd (ASX: $EEG) has successfully executed the divestment of its US oil & gas assets, entering an unconditional agreement to sell its US oil & gas assets located in the Appalachian region for up to US$9.1 million. The sale proceeds include an upfront cash payment of US$5.9 million, contingent deferred payments of up to US$2.3 million depending on future gas prices, and deferred solar payments of US$0.9 million. Upon completion, Empire's US Macquarie Bank credit facility will be repaid in full, and post-completion, US$2.2 million in cash will be available to support the development of Empire's Beetaloo Basin assets. Empire will retain a 3.75% carried working interest over shale formations with negligible holding costs. The divestment allows Empire to focus on the development of the Beetaloo Basin, aiming to provide energy security, employment, royalty income, and gas supply to the Australian East Coast market and broader Asian region via LNG export.