Empire Oil & Gas Buys Out ERM Power's Stake in Red Gully Gas Project

Australia listed Empire Oil & Gas has struck a deal with ERM Power to buy 100 percent of Red Gully gas project and several highly prospective Perth Basin tenements in Western Australia.

Agreement with ERM Power will pave the way for a potential company-making exploration drive, the company said Monday.

Under the agreement, Empire will emerge with control of the largest acreage package in the Perth Basin. It will own 100 per cent of ten of the 12 tenements in this package, including the Red Gully gas and condensate project, and about 80 per cent of a further two tenements in this package. This acreage package covers more than 12,000 sq km, representing more than 50 per cent of the Basin.

“This deal will deliver Empire 100 per cent ownership and revenue of our cornerstone production asset, Red Gully, and the largest prospective oil and gas acreage holding in the Perth Basin,' Empire Chief Executive Ken Aitken said. “This deal will mean that Empire will receive 100 per cent of all the cash from selling condensate and the additional cash from selling gas to Alcoa under Tranche 2 of the Gas Supply Agreement which we expect to commence in about a year’s time. Based on the current production rates of 8 TJ and 360 barrels of condensate per day, this is over $25 million a year.”