Empire Energy’s $3M SPP Could Dilute Shares if Oversubscribed

Empire Energy's Capital Raise Strategy

Empire Energy Group Limited (ASX: EEG) has announced the launch of a Share Purchase Plan (SPP) set to open on May 23, 2025, aiming to raise up to $3 million. This initiative follows a successful institutional placement earlier in May that secured $27.75 million at the same share price of $0.16. The SPP offers eligible shareholders the opportunity to purchase additional shares at a discount, reinforcing the company's strategy to strengthen its capital base ahead of critical project milestones.

Details of the Share Purchase Plan

Eligible shareholders registered by May 15, 2025, with addresses in Australia or New Zealand can subscribe for up to $30,000 worth of shares without brokerage fees. The issue price represents a notable discount of 22% to the last traded price prior to the trading halt, providing an attractive entry point for investors. Importantly, shareholders participating in the SPP will also receive free attaching options, subject to shareholder approval, exercisable at $0.24 within 24 months, potentially enhancing future value.

Use of Proceeds and Project Focus

The capital raised through the SPP, combined with funds from the institutional placement and existing cash reserves, will be directed towards advancing the Carpentaria-5H well in the Beetaloo Basin, Northern Territory. Specifically, the funds will support fracture stimulation and flow testing activities, as well as the installation of the Carpentaria gas plant and associated in-field infrastructure. These developments are critical steps in Empire Energy's plan to unlock the basin's gas potential and move towards commercial production.

Participation Terms and Conditions

The SPP is non-underwritten and may be scaled back at the company's discretion depending on shareholder demand. Applications can be made via BPAY or by submitting a completed application form with payment by cheque. The offer excludes shareholders in the United States and those acting on behalf of US persons, reflecting regulatory compliance. The company has also extended the offer to custodians acting on behalf of eligible beneficiaries, broadening participation within the permitted jurisdictions.

Next Steps and Market Implications

Following the SPP's close on June 6, 2025, Empire Energy plans to issue the new shares on June 16, with trading expected to commence the following day. The attaching options will be offered separately under a prospectus after shareholder approval, anticipated in mid to late July. This capital raising effort underscores Empire Energy's commitment to advancing its exploration and development agenda, though investors should watch for the final subscription levels and any scale back decisions that may affect individual allocations.