Empire Energy Navigates $21M Cash Outflows, Secures Key Financing for Carpentaria Plant

Empire Energy’s Cash Flow Dynamics

Empire Energy Group Limited’s quarterly cash flow report for the period ending 31 March 2025 reveals a challenging but strategically managed liquidity position. The company recorded net cash outflows from operating and investing activities totaling over $21 million, primarily driven by substantial exploration and evaluation expenditures and significant investments in property, plant, and equipment.

Specifically, the company spent approximately $2.3 million on operating activities and a hefty $18.8 million on investing activities, including settling costs related to the Carpentaria-5H drilling and prepaying hydraulic stimulation expenses. These outflows underscore Empire’s ongoing commitment to advancing its Northern Territory assets and preparing for future production growth.

Financing Facilities and Liquidity Position

To support these cash demands, Empire drew down $12.8 million from its $30 million Research & Development (R&D) facility and $4.4 million from a $5 million Performance Bond Facility, both secured with Macquarie Bank Limited and backed by the company’s Northern Territory assets. These facilities carry interest rates of BBSW+5.5% and 10.0%, respectively, with maturities extending to December 2026.

Despite the heavy cash outflows, Empire ended the quarter with a cash balance of $14.4 million and retained $17.8 million in unused financing capacity. This combined liquidity provides an estimated 1.5 quarters of funding at the current cash burn rate, a critical buffer as the company navigates its capital-intensive development phase.

Strategic Progress: Midstream Infrastructure Facility

Importantly, after the quarter’s end, Empire completed documentation for a new Midstream Infrastructure Facility with Macquarie Bank. This facility is earmarked to finance the construction and installation of the Carpentaria Gas Plant, a pivotal asset for the company’s operational expansion and future revenue generation.

This development signals Empire’s proactive approach to securing long-term funding solutions aligned with its growth objectives. The Carpentaria Gas Plant is expected to enhance the company’s production capabilities and cash flow profile once operational.

Outlook and Operational Continuity

Empire’s management remains confident in the company’s ability to continue operations and meet its business objectives. The cash balance at quarter-end represents approximately six times the net cash used in operating activities for the quarter, indicating sufficient liquidity to sustain near-term operations.

While the estimated funding runway of 1.5 quarters highlights the need for ongoing capital management, the recent financing arrangements and infrastructure facility documentation provide a solid foundation for Empire’s next phase of development.