Why Shares In Empyrean Energy Plc. Jumped

Empyrean Energy Plc. (LON: EME) is up for sale after value of prolific Eagle Ford Shale asset soars.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 10 July, 2014 9:55 am BST

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Although we don’t believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.

What: Shares of Empyrean Energy (LSE: EME), the AIM-quoted oil and gas explorer, jumped by 12% in early trade after the firm put itself up for sale. Empyrean wants to “maximise value for shareholders”, and is considering a range of options, which also include a disposal of existing assets.

So what: Empyrean has appointed Macquarie capital to conduct the formal sales process. The board has not received an approach prior to today’s stock market statement, and nor is it engaged in discussions with any party regarding a sale. The Takeover Panel has granted a dispensation from the rules so that any interested party will not need to be publically named.

Now what: Empyrean’s flagship project is the Sugarloaf AMI in Texas, which is operated by US oil major Marathon Oil. Recent corporate acquisitions around Sugarloaf have demonstrated that high-quality Eagle Ford Shale assets are in demand, pushing up the underlying value of the Sugarloaf asset. Production at Sugarloaf increased 50% year-on-year in the 12 months to March, and shares in Empyrean Energy have risen 85% since the beginning of the year.