The Empire Energy Group Ltd (ASX: EEG) share price is in negative territory in late-afternoon trade. This comes despite the company announcing an update on the acquisition of the EMG Northern Territory's (EMG NT) Beetaloo interests.
At the time of writing, the Empire Energy share price is swapping hands for 31 cents a pop, down 3.1%.
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Details of the acquisition update
According to its release, Empire Energy advised that EMG NT has delivered a notice of exercise of tag-along right to Pangaea. A tag-along right comprises of a number of clauses (co-sale rights) that aim to protect a minority shareholder. Essentially if the majority shareholder sells their stake in an asset, it allows the smaller shareholder to follow suit and sell their holdings.
Empire Energy plans to acquire an 82.5% interest in 5 oil and gas tenements in the Northern Territory's Beetaloo sub-basin. Pangaea, the majority shareholder of those interests, will receive $5 million in cash and 140 million Empire Energy shares. In addition, there will be 8 million unlisted options attached to the shares with an exercise price of 70 cents apiece.
The remaining 17.5% interest that EMG NT holds will now also be sold on the same pro-rata basis. Empire Energy will seek shareholder approval at the extraordinary general meeting to obtain the green light for the acquisition.
If approved, EMG NT will receive $1.06 million in cash along with close to 29.7 million Empire Energy shares. Furthermore, almost 1.7 million options will be available to acquire ordinary Empire shares at 70 cents each.
Should all go to plan, Empire Energy will own a 100% interest in all its Beetaloo and McArthur Basin properties.
About the Empire Energy share price
Over the last 12 months, the Empire Energy share price has gained roughly 70%, however year-to-date performance is down 14%. The company's shares have been mostly travelling sideways since October last year.
Empire Energy presides a market capitalisation of approximately $110 million, with 363 million shares outstanding.
