Empire Oil & Gas says construction of the Perth Basin's first gas and condensate plant, Red Gully, has cost $38.7 million when including a lengthy commissioning period, drawing a line under a guessing game by investors.
The final cost, announced yesterday, compares with a $29.1 million estimate when construction began (and not including contingencies for commissioning) for an operation that is supposed to supply eight terra joules of gas a day to foundation customer Alcoa and deliver 500 barrels of oil a day to BP's Kwinana refinery.
The 33 per cent cost blowout is in line with what most resources projects in WA have suffered.
Red Gully, near Gingin, is transformational for Empire and the first major gas venture for 23.6 per cent partner, the $560 million-valued Brisbane company ERM Power. ERM is also Empire's biggest shareholder.
There appears little cause for celebration for Red Gully's operator. Empire managing director Craig Marshall is grappling with unhappy shareholders. Empire has also launched a Supreme Court action to force the removal of one of its two Red Gully partners, Wharf Resources. The case against Wharf - the London company is disputing it has lost its 10 per cent stake in Red Gully and says it will contest Empire's Supreme Court move - is not the only legal activity on the table.
Empire's directors have also taken action against opponents who have vented their spleen on social media sites. They demanded apologies and in some cases achieving commercial settlements for what Mr Marshall describes as public commentary that has affected Empire's share price but is "incorrect and defamatory of the company's directors".
Talk to critics of Empire and you hear claims of a personal fiefdom and lax disclosure, allegations Mr Marshall rejects.
"We have two independent directors, we have strong corporate governance," Mr Marshall said. "We make decisions as a board, this is not a fiefdom and nothing could be more to the contrary."
Empire's shares closed unchanged at 1.3Â¢ yesterday, valuing the company at $82 million.
Empire has about 6.3 billion shares on issue and is a day trader's favourite, which helps explain why it attracts so much attention in online chat rooms.
Mr Marshall concedes that Empire's share price is disappointing, as is the lack of investor appreciation of Red Gully.He says he soon hopes to be able to detail the level of condensate revenue Red Gully is achieving, which in turn should help Empire shareholders realise the value they are sitting on.