Triangle Energy has cashed its first payment for the sale of its share of the Cliff Head oil joint venture (JV) in Western Australia.
The $2.4 million payment from JV partner Pilot Energy represents the first of at least 4 payments expected to total up to $18 million for Triangle as it continues its pivot to conventional onshore oil and gas exploration in the lucrative Perth Basin.
The company insists it is now fully funded for its anticipated Becos-1 exploration well in the North Perth Basin, expected to spud by years end.
Importantly, Triangle has also shuffled all operating costs associated with the Cliff Head facility onto Pilot who will look to use it for carbon storage.
Triangle is due to receive its second payment for Cliff Head of $4.1 million by the end of November, bringing total payments from the sale to $6.5 million by the end of the year. Further payments will follow upon completion of milestones, including a $4 million contingent upon the award of a Greenhouse Gas Injection (GGI) license and up to $7.5 million in royalties from Pilot’s proposed carbon capture and storage (CCS) project at Cliff Head.
Triangle’s plans for drilling of the Becos-1 well are markedly advanced with a rig already secured for spudding within the next three months.
The prospect lies within its “EP 437” concession where a best estimate of 5 million barrels of oil (MMbbl) has been identified, with the potential to reach as much as 21 MMbbl.
Becos-1 is expected to be a very shallow and cheap drilling affair for the company, with the target sitting just 1000m below surface, some multiples shallower than many similar prospects across the Perth Basin.
The drilling will be conducted alongside joint venture partners Strike Energy and Echelon Resources. Triangle holds a 50 per cent operator interest in the EP 437 permit, with Strike and Echelon holding 25 per cent each.
Triangle Energy managing director Conrad Todd said: “The receipt of this first payment from Pilot ensures Triangle is fully-funded for its share of the upcoming Becos-1 well in the Perth Basin. Our financial outlook is further bolstered by the additional $4.1m payment from Cliff Head due next month, while Pilot will now also pay all the operating costs at Cliff Head point going forward. This puts Triangle in a very robust financial position with the substantial upside offered by the Becos-1 well.”
The company’s portfolio now includes not only the EP 437 license but also a 50 per cent interest in the Mt Horner and L7 licences.
In the UK, Triangle also recently picked up interests in offshore blocks in the Outer Moray Firth, including the Cragganmore gas field. The assets are expected to be combined with future North Sea acquisition opportunities upon further legislative clarity and changes by the incoming UK government.
The company is also looking to explore three prospects across its L7 permits and the most likely to be uncorked is its MH2-updip prospect that features a best estimate resource of 2.7 MMbbl.
The latest handing over of the reigns at Cliff Head finalises Triangle’s shift away from its mature assets at Cliff Head to its promising exploration opportunities within the Perth Basin.
With more than $10 million cash on hand and plenty more set to come in Triangle is well placed to enjoy more exploration success at its multiple prospects within the Perth Basin.
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By Andrew Todd
