Empire Oil & Gas acquired by largest shareholder

Troubled Perth-based producer Empire Oil & Gas NL (EOG) has been acquired by its largest shareholder, Mineral Resources Ltd. (Min Res), also of Perth.

Troubled Perth-based producer Empire Oil & Gas NL (EOG) has been acquired by its largest shareholder, Mineral Resources Ltd. (Min Res), also of Perth.

Min Res acquired all the assets of the collapsed EOG, including the Red Gully gas-condensate project in the onshore north Perth basin.

The transaction was settled Nov. 9 following approval by EOG’s creditors.

Min Res now will begin working with EOG’s contractors to begin reviving and developing the company’s assets. The immediate focus will be to start a well intervention plan with the aim of restarting the Red Gully processing plant near Gin Gin.

Under a deed of company arrangement, Min Res will pay $679,000 (Aus.) into a creditors’ trust, much of which will go to Ferrier Hodgson, EOG’s administrators. Ferrier Hodgson estimate that unsecured creditors will receive 15-18¢ on the dollar under this arrangement.

EOG collapsed in September after a blocked well caused a suspension of operations at Red Gully plant, which supplies gas under contract to aluminium giant Alcoa.

Min Res then demanded immediate repayment of a $15 million loan. EOG could not comply.

Min Res says the move to acquire EOG is consistent with its strategy of obtaining and operating gas assets to provide lower and certain fuel costs over the long term.

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