Empire Energy’s $28M Placement to Fund Carpentaria-5H Fracture Stimulation

Empire Energy’s Strategic Capital Raise

Empire Energy Group Limited (ASX: EEG) has announced a $28 million equity raising through a combination of institutional placement and a share purchase plan (SPP). This capital injection is designed to accelerate the company’s transition from exploration to production in the Beetaloo Basin, Northern Territory, Australia. The placement price of $0.16 per share reflects a discount to recent trading prices, aiming to attract strong investor participation.

The funds will primarily finance the fracture stimulation and extended production testing of the Carpentaria-5H well, the longest horizontal shale well drilled in the Beetaloo to date. This well is critical to Empire’s pilot project, which targets first gas sales in 2025. Additionally, the capital will support the installation of the Carpentaria Gas Plant and associated in-field infrastructure, as well as provide working capital and cover the costs of the equity offer.

Beetaloo Basin: A Low-Carbon, High-Potential Resource

Empire holds a commanding position in the Beetaloo Basin, with approximately 3 million net effective acres and a significant contingent and prospective resource base. The company’s gas is characterized by low carbon dioxide content (<1%), making it attractive for both domestic and export markets, including Japan’s LNG sector. Empire’s stacked shale play, with over 300 meters of net thickness across multiple shale layers, offers development efficiencies akin to prolific US shale basins.

Importantly, Empire has secured a binding 10-year gas sales agreement with the Northern Territory Government, underpinning the pilot project’s economics. The agreement covers up to 25 terajoules per day with options for expansion, providing a stable revenue foundation as Empire advances toward commercial production.

Robust Financing and Strategic Partnerships

Complementing the equity raise, Empire has arranged a $65 million financing package with Macquarie Bank, including facilities for exploration, appraisal, and midstream infrastructure. This long-standing banking relationship supports the company’s development plans and mitigates funding risks.

Empire is also collaborating with APA Group on midstream infrastructure development, including potential pipeline connections to eastern Australian markets. These partnerships are crucial for scaling production beyond the pilot phase and accessing broader domestic and LNG export markets.

ESG and Regulatory Backing

Empire emphasizes its commitment to environmental, social, and governance (ESG) principles, maintaining strong relationships with Traditional Owners and pastoralists. The company has received environmental approvals for its pilot project and operates with a focus on minimizing emissions and surface footprint.

Government support is evident, with both Northern Territory and Federal authorities recognizing the strategic importance of the Beetaloo Basin for energy security and economic growth. This regulatory environment provides a supportive backdrop for Empire’s development ambitions.

Looking Ahead: Key Milestones and Risks

Near-term catalysts include the commencement of fracture stimulation on Carpentaria-5H in June 2025, followed by flow testing and installation of the gas plant in the second half of the year. These steps are pivotal for proving commercial viability and initiating gas sales.

However, risks remain, including regulatory approvals, commodity price volatility, operational execution, and securing final Traditional Owner agreements. Investors will be watching closely as Empire navigates these challenges while advancing its pilot project toward full-field development.