13th May 2014 11:42
LONDON (Alliance News) - Empyrean Energy PLC Tuesday said the takeover offer for its partner on the Sugarloaf area of mutual interest (AMI) asset in Texas, Aurora oil & Gas Ltd, has been increased.
The US-focused oil and gas exploration, development and production company said that Baytex Energy Corp has now increased its offer to AUD4.20 per share from AUD4.10 when the first proposal was first made in February.
In February, the AUD4.10 per share offer implied a AUD1.84 billion market capitalisation for Aurora, representing a 52% premium to Aurora's one-week volume-weighted average price to February 6.
Empyrean said at the time that the acquisition demonstrates the demand for the shale assets on the Eagle Ford Shale field, on which the Sugarloaf AMI lies, and should have a positive impact of the value of the Sugarloaf asset.
In the US, fuel prices have fallen sharply as shale gas fracking has become commonplace across states such as North Dakota and Mississippi. Hydraulic fracturing, otherwise known as fracking, involves extracting gas trapped in shale by pumping in pressurised water and chemicals.
Aurora held a 28.1% interest in the Sugarloaf AMI, while Empyrean has a 3% working interest in roughly 24,000 gross acres and interest over 121 gross producing wells with full development expected to reach over 400 wells.
Empyrean Energy shares were down 0.5% to 14.30 pence on Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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