Empyrean cuts loss but will need further funds in coming year

Empyrean Energy cut its losses last year but in order to progress exploration of its assets, new funding will be required within the next 12 months.

Empyrean narrowed its total comprehensive loss for 12 months to 31 March by 73% to $2.7m as the explorer generated revenue of £30,000.

Cash outflows hit $10.4m versus the previous year when restructuring and the sale of an interest in the Sugarloaf asset in Texas saw $16.77m of inflows. At the end of March, cash in the bank had shrunk 93% to $388,000, as the AIM-listed outfit completed a series of exploration projects were acquired in China, Indonesia and the US.

Directors warned that alternative sources of funding, such as project debt financing and equity raisings, will be required within the next 12 months and that there is "an appropriate plan to raise additional funds as and when it is required, either through the sale of existing assets, through joint ventures of existing assets or through equity or debt funding".

In the absence of additional funding, Empyrean cautioned shareholders of a "material uncertainty" over its ability to continue trading.

However, the company told investors it was "excited about the position it is in", with a stronger oil price and interests in three high-impact exploration projects in energy-hungry markets and cash flow from production beginning from its Dempsey project last month.

Empyrean vowed to continue its work to accelerate its newly acquired projects in order to position the company for renewed growth and to further increase shareholder value.

Empyrean's chief executive, Tom Kelly, said, "We expect that work over the remainder of the calendar year will continue to add significant value for the company and its shareholders through the focused advancement of these projects."

As of 1000 BST, Empyrean shares had tumbled 10.26% to 7p.