Empire Energy’s $28M Raise Fuels Beetaloo Basin Gas Push with 2025 Sales in Sight
Empire Energy Group has launched a $28 million equity raise to finance critical development activities in the Beetaloo Basin, targeting first gas sales from its Carpentaria Pilot Project in 2025. The capital raise, combined with a $65 million financing package, underpins the company’s ambition to commercialize one of Australia’s largest low-CO2 shale gas resources.
- Equity raise of $28 million via institutional placement and share purchase plan
- Funds to support hydraulic stimulation and flow testing of Carpentaria-5H well
- Binding 10-year gas sales agreement with Northern Territory Government
- Secured $65 million financing package with Macquarie Bank for infrastructure
- Targeting first gas sales from Carpentaria Pilot Project in 2025
Empire Energy’s Strategic Capital Raise
Empire Energy Group Limited (ASX – EEG) has announced a $28 million equity raising through a combination of an institutional placement and a share purchase plan (SPP). This capital injection is designed to fund key development milestones in the company’s flagship Beetaloo Basin project, including the hydraulic stimulation and flow testing of the Carpentaria-5H well and the installation of the Carpentaria Gas Plant and associated infrastructure.
The placement involves issuing approximately 175 million new shares at $0.16 each, representing a 17.2% dilution to existing shareholders, priced at a discount to recent trading levels to attract institutional investors. Attaching options exercisable at $0.24 over two years sweeten the offer, aligning investor interests with the company’s growth trajectory.
Advancing the Carpentaria Pilot Project
Empire’s Carpentaria Pilot Project is positioned to deliver first gas sales in 2025, a significant milestone for the company and the Northern Territory’s energy landscape. The project targets production of up to 25 terajoules per day (TJ/d) initially, with scope to expand. The Carpentaria-5H well, drilled with a record 3,310-metre horizontal section, will undergo a large-scale fracture stimulation comprising over 60 stages, aiming to optimize productivity and establish a reliable production type curve for future development.
Supporting this, Empire has secured a binding 10-year gas sales agreement with the Northern Territory Government, an investment-grade customer, providing a stable revenue foundation. The gas plant, with a 42 TJ/d design capacity, has been acquired and is slated for installation in the second half of 2025, facilitating processing and delivery via the existing McArthur River Gas Pipeline.
Robust Financing and Infrastructure Partnerships
Complementing the equity raise, Empire has arranged a $65 million financing package with Macquarie Bank, structured across three tranches to fund exploration, appraisal, and midstream infrastructure. This includes a $30 million R&D facility, a $5 million performance bond facility, and a $30 million midstream infrastructure facility dedicated to the gas plant and related works.
Further, Empire has partnered with APA Group to explore midstream gas infrastructure development, including potential pipeline expansions to connect the Beetaloo Basin to eastern Australian markets. This collaboration could materially reduce Empire’s capital requirements and accelerate commercial production.
A Large, Low-Carbon Resource with Strategic Market Access
Empire’s Beetaloo acreage encompasses over 3 million net effective acres with independently assessed contingent and prospective resources exceeding 47 trillion cubic feet equivalent (TCFe) of low CO2 shale gas. The resource’s low carbon intensity and high ethane content position it well for blending with existing LNG supplies, particularly for export markets in Asia.
The Beetaloo Basin’s proximity to Darwin and existing LNG export infrastructure offers Empire a strategic advantage to serve both domestic and international gas markets amid forecasted supply deficits. Australian east coast gas markets are expected to face structural shortages by 2029, while global LNG demand is projected to outpace supply by 2033, underscoring the timeliness of Empire’s development plans.
ESG Commitments and Stakeholder Engagement
Empire emphasizes environmental, social, and governance (ESG) principles as core to its strategy. The company’s gas reservoir contains less than 1% CO2, significantly lower than many alternatives, and it plans to offset all Scope 1 emissions. Strong relationships with Traditional Owners and pastoralists underpin its social license to operate, with ongoing engagement and benefit-sharing arrangements in place.
Regulatory approvals are well advanced, including environmental permits for the Carpentaria Pilot Project, though final investment decisions remain contingent on Traditional Owner agreements and shareholder approvals for the capital raise.
Bottom Line?
Empire Energy’s capital raise and financing package set the stage for a pivotal year in 2025 as it moves from appraisal to production, but execution risks and regulatory hurdles remain key watchpoints.
Questions in the middle?
- Will the hydraulic stimulation and flow testing of Carpentaria-5H meet commercial production targets?
- How will Empire navigate remaining Traditional Owner approvals and regulatory conditions?
- What are the implications of gas price volatility and financing covenants on Empire’s growth plans?
