Triangle to slash liabilities ahead of seismic survey

Triangle Energy Global has outlined a series of new initiatives including the commencement of a seismic program over some significant onshore Perth Basin targets. Alongside Pilot Energy, the two companies have also outlined adjustments to a number of permits which will result in a serious reduction in abandonment liabilities on completion.

Triangle has clearly been heads down beavering away in the back rooms resulting in a flurry of announcements on the ASX on Monday.

Aside from Triangle’s new seismic program across the Perth Basin, both Triangle and Pilot also announced realignment on a number of permits, notably the Cliff Head joint venture, or ‘CHJV’, and their proposed Cliff Head carbon capture and storage project, or ‘CH CCS’.

In a move that will slash Triangle’s abandonment liabilities once regulatory and completion milestones are met, the company will revert from 78.75 per cent ownership to a 42.5 per cent stake. This tranche includes the Cliff Head oil field, wellhead platform and the Arrowsmith oil processing facility. Pilot will become operator of both the CHJV and the CH CCS JV, although Triangle noted it will continue its technical management of the CHJV until oil production stops.

The two major milestones involve the federal regulator, National Offshore Petroleum Titles Administrator, or ‘NOPTA’ declaring the Cliff Head oil field reservoir a Greenhouse Gas Storage formation and a Greenhouse Gas Injection Licence for the injection and permanent sequestration of a minimum of 500,000 tonnes of CO2 per annum into the Cliff Head oil field reservoir.

The partners noted the implementation of the CH CCS Project will likely significantly extend the working life of substantially all of the CH JV facilities and defer material decommissioning costs well into the future.

Not only does the deal remove the dark clouds of decommissioning, the partners say the agreement provides a clear pathway for the CCS development project at Cliff Head.

Triangle Energy Global Managing Director, Conrad Todd said: “I am pleased to report to shareholders that Triangle has commenced the 3D seismic acquisition in the L7 and EP 437 Permits and that the seismic acquisition is fully third party funded. This is a major step towards realising the potential in this prospective block.

“We are pleased to have concluded this Term Sheet for a CCS project with Pilot. It provides an exciting and profitable use for the Cliff Head facilities once the oil field reaches its end of economic life. Our co-operative Joint Venture will both reduce Triangle’s abandonment liability and defer it for at least 10 years after oil production.

“We are especially pleased that the CHJV will at the same time be making a significant contribution to the reduction to the Carbon Dioxide emissions in Western Australia.”

The companies can now move forward on Milestone 1 being the NOPTA application to have the Cliff Head oil field reservoir declared a Greenhouse Gas Storage formation and to then to develop the CH CCS Project once economic oil production from the field has stopped.

The partners anticipate the CH CCS project, the first offshore CCS development in Mid-West WA and one of the first CCS projects to be implemented in Australia, will be operational by 2025.

Moving forward at a rapid clip, a seismic contract has been signed with prominent contractor Terrex and surveyors have already started work on planning for 3D seismic recording to begin early in May.

Triangle also confirmed it had mopped up the remaining 13.058 per cent interest in Permit EP 437 from Pilot Energy.

Looking forward it appears the work is set to continue for Triangle with it now drawing up plans to mature its chase of big gas targets across the onshore Perth Basin attempting to replicate discoveries such as the game changing Waitsia, now run by Mitsui, Strike Energy’s West Erregulla and Walyering and MinRes’ Lockyer Deep.

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