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LONDON (Alliance News) - Empyrean Energy PLC Friday said Aurora Oil & Gas Ltd, its partner in the Sugarloaf area of mutual interest asset in Texas, is to be acquired for a high premium.
The US-focused oil and gas exploration, development and production company said that Aurora will be bought by Baytex Energy Corp for AUD4.10 per share, implying a AUD1.84 billion market capitalisation representing a 52% premium to Aurora's one-week volume weighted average price up until February 6.
Empyrean said that the acquisition demonstrates the demand for the shale assets on the Eagle Ford Shale field, which the Sugarloaf AMI lies on, 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 such states 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 up 5.1% to 12.35 pence in early trading Friday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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