Empyrean losses widen after disappointment at Jade

The AIM-traded firm, which remains pre-revenue, said its loss from continuing operations after tax totalled $8.11m for the 12 months ended 31 March, compared to $0.95m year-on-year.

Basic and diluted losses per share both expanded to 1.43 US cents per share, from 0.2 cents in the 2021 financial year.

On the corporate front, Empyrean highlighted the securing of placement and convertible note funding of $10.14m in December, to partially fund drilling at the Jade prospect.

An earlier placement to raise $6.92m was completed in July last year, and after the year ended, it completed a placement to raise $2.25m in May.

“Empyrean's key focus during the year was completing the necessary activities required in preparation for the drilling of the initial exploration well at Jade under the production sharing contract (PSC) terms,” said chief executive officer Tom Kelly.

“While the end result was not the one we had hoped for at Jade, the achievement of safely drilling the well on time and on budget was a credit to Empyrean's team and a great reflection of the excellent teamwork, expertise, professionalism and cooperation between the company, its partner CNOOC, and its technical service providers CNOOC Enertech and COSL.

“Importantly, post the drilling at Jade, Empyrean has been able to combine our excellent quality 3D seismic data with the confirmed well data from Jade resulting in post well analysis that has improved the validity of the Topaz prospect as a robust and large drilling target of approximately 891 million barrels in place.”

Kelly said the company had therefore made the decision to enter into an agreement for the second phase of exploration on block 29/11, with the aim to drill Topaz before June 2024.

“In Indonesia, Empyrean looks forward to maximising the value from its interest in the Mako Gas Field which would strengthen the company's balance sheet and help fund the drilling of Topaz.

“In California, while activity and expenditure was limited during the year, the operator Sacgasco continues to evaluate the project and Empyrean will review and assess any further technical and commercial opportunities as they come to hand, particularly in light of strong gas prices for gas sales in the Sacramento Basin.

“As always, the Company continually assesses other financing and strategic alternatives to provide it with additional working capital as and when required, including through the sale or partial sale of existing assets, through joint ventures of existing assets or through further equity or debt funding.”

The company also successfully restructured its convertible note, Tom Kelly noted.

“In addition to its existing projects, Empyrean continues to assess a number of additional oil and gas projects that it believes may enhance a balanced portfolio of opportunity and will update shareholders as required.

“While the board and management share the disappointment of the Jade well result with its shareholders, it moves forward with renewed optimism, with good news due from Indonesia and the learnings from Jade further de-risking Topaz which standalone has the potential to be a company changer.”

At 1552 BST, shares in Empyrean Energy were down 2.09% at 1.08p.

Reporting by Josh White at Sharecast.com.