W E B w w w . e m p i r e o i l . c o m . a u

S T R A L I A

23 May 2014

Supreme Court rules in Empire's favour on Wharf Resources dispute

Empire Oil & Gas (ASX: EGO) is pleased to advise that the Supreme Court of Western Australia has recognised that Empire increased its stake in the Red Gully oil and gas project in WA as the result of last year's withdrawal of Wharf Resources from EP 389.
The Court's decision means that the register of interests kept by the Department of Mines and Petroleum can now be amended to show Empire's stake in Red Gully increased from 68.75 per cent to 76.39 per cent and ERM Gas Pty Ltd.'s (ERM) (a wholly owned subsidiary of ERM Power ASX: EPW) stake increased from 21.25 per cent to 23.61 per cent. This is because on its withdrawal, Wharf's 10 per cent stake in the joint venture was split on a pro-rata basis between Empire and fellow joint venture partner ERM.
In light of the decision, Empire and ERM will seek to have distributed to them on a pro-rata basis the
10 per cent of condensate sales revenue being held in escrow pending settlement of the dispute.
Empire's share of these funds stands at approximately $600,000. To date, Empire and ERM have funded 100 per cent of the operating costs of the Red Gully Facility but received only 90 per cent of the condensate revenue.
Along with the valid transfer of Wharf's interests in Exploration Permit 389, the Court recognised that Wharf's interest in Pipeline Licence 96 was also transferred to the remaining Joint Venture parties. These licences house the Red Gully project.
Empire and ERM brought the claim in the Supreme Court to resolve the issue of Wharf's withdrawal from the EP 389 Joint Venture after Wharf failed to meet cash calls as required under the relevant Joint Operating Agreement.
Confirmation of Wharf's withdrawal means that previously lodged transfers of title to Exploration Permit 389 and Pipeline Licence 96 to the remaining Joint Venturers can now be registered by the Department of Mines and Petroleum.
Empire Chief Executive Ken Aitken said the Court's decision gave the Company certainty of ownership at Red Gully.
"This outcome allows us to progress our growth and development plans for the project with the comfort and security that comes from knowing that this ownership issue has been resolved," Mr Aitken said.

Media For further information, contact: Paul Armstrong Read Corporate 08 9388 1474/0421 619 084
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