TERMS OF THE AGREEMENT
Empire has entered into a binding Heads of Terms with TXO Plc. (TXO), Alpha Prospects Plc (Alpha), Hill Street Investments Plc (Hill Street), whereby TXO will, subject to certain conditions, capitalize its US$1.5 million convertible loan note including all accrued but unpaid interest and fees into shares in TOG for a 25% interest. USD $100,000 of the cash investment has already been paid by TXO to Empire with the shares intended to be allocated to parties in TOG on completion of all legal documentation associated with the joint venture and satisfaction of all conditions. The initial advance of US$100,000 has been made by way of an unsecured interest free loan to TOG, repayable on demand.
Empire has agreed to sell its 100% interest in Great South Land Minerals Ltd, (in liquidation)
Management of TOG
Following completion, TOG will appoint a new professional and independent Board with proportional representation that will have the day to day control of TOG and who will be tasked with upgrading the available drilling data to UK AIM CPR standards and thereafter to seek to raise funding of approximately $10m in order to drill the Bellevue and Thunderbolt structures. Whilst the board of TOG will have representation from TXO, Alpha, Hill Street and Empire’s boards, the intention is to create a new independent company with strong international oil and gas experienced management and board outside of the absolute control of both Empire and TXO.
Empire summary of GSLM’s audited incurred expenditure on SEL 13/98 of $50,851,656
GSLM and predecessor companies expended from 1984 up until the issue of SEL 13/98 a total of AUD $5,555,479 exploring for oil and gas onshore Tasmania, that when added to the SEL 13/98 audited expenditure of AUD $50,851,656 and incurred expenditure on the current GSLM license EL 14/2009 of $8,054,867, all documented in the application to MRT and Minister in support of the extension of term of EL 14/2009, equals a grand total of $64,462,002.
GSLM’s audited expenditure on SEL 13/98 over the eleven year contract period 1999 to 2010, (including a one year period, after the 10 yrs of exploration, for GSLM to apply for any prospective areas identified as a result of the exploration results), in meeting all the contractual license conditions, was $50,851,656. This was made up in part of invoices detailing $32,417,049, (alone is in excess of the SEL 13/98 expenditure commitment) expended acquiring 1,300Km of 2D seismic, drilling, geophysics, geology and wages being sorted into files. Those files unequivocally prove that quantum of expenditure and include letters from the suppliers and contractors supporting the validity of GSLM’s claims and are now with the receiver manager SMB, MRT, The Right Honorable Minister and Kim Booth a member of the Greens party. The generation and distribution of these files was to affirm the validity of our expenditure and prove it was clearly in excess of our work commitment on SEL 13/98.
The Global Financial Crisis (GFC) resulted in a temporary lack of funding for GSLM, causing it to run into financial difficulty. As a result GSLM was placed into voluntary administration at 11am on the 21st June 2012 by its board prior to an order of the Federal Court of Tasmania to appoint a liquidator, at a hearing at 2pm on the same day. On Monday 10th September, Empire, as the largest and secured creditor of GSLM exercised its rights as a majority and secured creditor of GSLM to appoint Shelley-Maree Brooks and Matthew Campbell Muldoon of Sellers Muldoon Benton (SMB) as Joint and Several Receivers of GSLM with the intention of then becoming Administrators of GSLM. An appeal was subsequently lodged on Monday 10th September with Mineral Resources Tasmania (MRT) on GSLM’s behalf, pursuant to Section 25(5)(b) of the Mineral Resources Development Act 1995 (Tas) (the act) against the decision to refuse an application for the extension of term for the Exploration license EL 14/2009. Empire is confident of GSLM’s valid grounds for the appeal and intends to vigorously support the receiver manager SMB in their fight to enforce GSLM’s rights and legal entitlements under the SEL 13/98 contract.
Empire, with the intention of continued focus on completing drilling for oil and gas in Tasmania, intends to enter into Heads Of Terms with the intent to buy two drill rigs and ancillary oil field equipment so as to fast track the Tasmanian drilling program. In addition, to compliment the proposed purchase of the two drill rigs, Empire also intends to enter into Heads Of Terms to potentially purchase an interest in a separate International exploration license with the plan to drill a well immediately in conjunction with the Bellevue and Thunderbolt wells.
The Smartwin NY court case is proceeding with Paul Batista, Esq. engaged on behalf of Empire and has been sufficiently funded to complete the action, as provided for under the TOG agreement. As provided for in the TOG agreement any potential proceeds from Empires counterclaim will be shared on an Equal (50/50) basis. On Friday the 14th September 2012 there was a hearing at which Paul Batista. Esq, Empires attorney appeared, at the urging of Paul Batista, Justice Jeffery Oing of the Supreme Court of the state of New York, denied a motion by Smartwin International Limited to enter a default Judgment against Empire. The Judge has also ordered that a full pre-trial discovery, including the depositions of Smartwin in New York City, proceed promptly. Empire will continue to defend Smartwin’s claims in the Litigation and, more important, will aggressively pursue through Mr. Batista its counterclaims against Smartwin. On the 2nd of October major shareholders of both Alpha and TXO along with Empire’s CEO, received a briefing in New York updating them on the current status of the Smartwin action from Mr. Batista.
Malcolm Bendall stated that; “The TOG deal initially values GSLM at USD $8 Million and lays out a solid path ahead for the commercialization of the oil and gas project in Tasmania. The fate of the GSLM exploration license, EL 14/2009 has now been taken out of MRT and the Ministers hands by the Receiver Manager filing an appeal with the Warden of Mines, so now the result of GSLM’s appeal and its currently granted license lies squarely with the courts.
Contact: Malcolm Bendall
+61 3 6231 3529