Empire Announces Submission of Unsolicited Proposal to US Navy for Oil Supply Contract
Empire Energy Corporation International (Empire) announced on Monday, March 14, 2011 that in response to the United States Navy’s (USN) recurring issues arising from the instability and cost volatility of its global oil supply, Empire will be submitting to the Navy, an unsolicited proposal. This proposal will give the US Navy a way to stabilize the cost and quantity of its oil supply upon the expected realization of Empire’s anticipated production efforts in Tasmania.
In today’s world of political instability, the US Naval Petroleum Reserve no longer adequately provides the Navy with a stable source and cost of oil. Secretary of the United States Navy Mabus and Chief of Naval Operations Roughead at both the 2009 and 2010 Global Energy Forums underscored this fact and invited ideas for addressing the USN’s energy needs. Empire believes its oil fields in Tasmania, Australia may satisfy the modern US Navy’s need for a stable cost and supply of its hydrocarbon fuels – particularly in the Western Pacific.
Empire intends to offer an unsolicited proposal to the US Navy for 5.5 million B/yr of JP-5 (10% of Empire’s total Tasmanian, as yet, undiscovered potential resources [UPR]). Quoted price will be USD$200 per barrel (or USD$4.76 per gallon).
Potential worth to Empire stockholders is USD$1.1 billion yr, over the full 10 year contract period, or USD$11 billion, which equates to potential gross earnings per current authorized Empire share (600m) of $18.33 per share. A recent Empire study indicates a 5.5 million barrel a year refinery, built today in Tasmania, would cost approximately USD$1.2 billion. Execution of this proposal with expected realized production quantities, gives a basis to forward sell, finance and refine all of the Company’s 668 million barrels of the to-date crude of Undiscovered Potential Resource (UPR), to JP-5 jet fuel, at world parity pricing, would then equal USD$200 per Barrel equal to USD$133.6 billion.
Numerous meetings between Empire CEO, Malcolm Bendall, and third party representatives intimately involved and familiar with U.S. Naval Department energy/oil requisites, present and future, have indicated support and assistance in the development of this undertaking.
Empire Energy Corporation is an international oil and gas exploration company, focusing on developing assets in one of the world’s last virgin basins and to become a leading low-cost finder of hydrocarbons. The Company is currently operating in Tasmania’s central and northern basins.
This press release contains forward-looking statements based on our current expectations about our company and our industry. You can identify these forward- looking statements when you see us using the words such as “expect,” “anticipate,” “estimate,” “believes,” “plans” and other similar expressions. These forward- looking statements involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of our ability to complete required financings and other preconditions to the completion of the transactions described herein and Empire’s ability to successfully acquire reserves and produce its resources among other issues. We undertake no obligation to publicly update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. We caution you not to place undue reliance on those statements. For a more detailed discussion of risks and other factors related to Empire Energy Corporation International, please refer to 10-K and 10-Q reports filed with the U.S. Securities and Exchange Commission.
Source: Empire Energy Corporation International,March 14, 2011