The report is a little misleading to me. ERM wants to get out of holding EGO assets but look at annual report 2013, read this announcement and here is my concern. They seem to be keeping both our relatively shallow and cheaply drilled and highly oil potential assets, If they want out, these both have to go as well and have to be included. Have I missed something here, but if I am reading it correct then they can't have it both ways and these 2 tenements have to be included. Someone please tell me I have got it wrong. We are giving away the easiest way to earn money and we can drill now. Wannamal 4 sites are going to cost heaps and are very deep wells. 7 or 10 Million won't achieve much WRT Wannamal. Drill Charger and Black arrow SP goes up, we earn income and then we can fund and go forward not have to pay 16-20 Million in debt to say we own 100%, the biggest area in Perth Basin and no money to do anything with it. Don't make sense to me. Makes perfect sense for ERM, eliminates high costs of Wannamal/risks in the meantime have a nice little oil earner!!!
Empire will emerge with 100% ownership of 10 of its 12 Perth Basin permits and the Red Gully gas and condensate project and ~80% of another two permits.
Under the agreement, Empire will purchase from ERM its 23.61 per cent interest in EP 389, which includes Red Gully and the Wannamal Exploration prospects, its 30.87 per cent interest in EP 4262 which includes the North Erregulla prospect, its 13.88 per cent interest in EP 4322, which includes the Black Arrow prospect, its 5.56 per cent interest in EP 4162 which includes the Leschenault prospect, its 12.5 per cent stake in EP 440, its 50 per cent stake in EP 454 which includes the Charger and Garibaldi prospects, its 60 per cent interest in EP 480, its 100 per cent interest in EP 467 and its 21.25 per cent interest in Cattamarra Farms Pty Ltd (which owns the land that the Red Gully Facility and Gingin West-1 and Red Gully-1 wells are located on).
This transaction will leave Empire as the 100 per cent owner and operator of all these tenements, except for EP 426, in which Norwest Energy NL has a 22.22 per cent interest1.
From the 3013 Annual Report
Charger -1 EP454, near 3 Springs, sound familiar ERM PowerStation to be built here. EP 454 Shallow Rights - Oil 20 MMBO (10% of oil inplace) in Jurassic reservoir objectives.
Empire - 83.34%
ERM Gas - 16.66%
Drill to depth circa 1000m to evaluate Yarragadee Formation Sandstones.
Estimated potential un-risked resource of 20 MMBO.
ERM ARE KEEPING THIS!!!!
EP 454 Deep Rights - Gas Garibaldi 40 BCF or 9 MMBO In Permian objectives. 6 MMBO in Jurassic objectives
Empire - 50%
ERM Gas - 50%
They say that ERM will release 50% which includes charger and garibaldi. How can this be from what is in report see above it looks to me they are only releasing the deep rights of 50% and keeping the charger 16.66%, this is a cheap well and has oil. This is not right imo.
EP 432 North - Black Arrow
Reservoir in the Arranoo Sandstone TD at circa 1000 metres.
Estimated un-risked potential resource of 10 MMBO.
Area A
Empire - 47.22%
(Operator)
ERM Gas - 52.78%
ERM are KEEPING THIS, not right IMO.
EP 432 South - Oil 30 MMBO and 6 MMBO
Area B
Empire - 86.1%
(Operator)
ERM Gas - 13.9%
And this one selling Area B, keeping Area A which is Black Arrow. Does this not concern all of you, well it does to me. If they want out then they have to sell everything. Food for thought guy's. This is why the report is a little misleading to me IMO. Have I read it correct.
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