The Federal Government has paved the way for Triangle Energy Global to complete the $15 million sale of its Cliff Head oil assets off the Western Australian coastline after approving the site for permanent offshore carbon storage.
The approval confirmed today by Resources Minister Madeleine King will allow Pilot Energy to claim the final 78.75 per cent of the joint venture (JV) project that sits 11km off the coastline near the WA town of Dongara, while Triangle will set a stronger focus on its Perth Basin targets. Pilot has agreed to pay Triangle $7.5 million in cash and up to $7.5 million in royalties to acquire the assets at the depleted Cliff Head oilfield.
The government’s groundbreaking decision will see Pilot establish a carbon-capture storage (CCS) facility, which will form part of its Mid West Clean Energy Project.
The sale agreement will see Pilot immediately stump up $3 million for Triangle, with a further $4.5 million contingent upon it securing a greenhouse gas injection licence from the National Offshore Petroleum Titles Administrator. The $7.5 million in royalties from the carbon sequestration project will be based on a 2 per cent revenue royalty from third-party carbon management services.
Triangle Energy managing director Conrad Todd said: “This is a major milestone for both companies and, importantly, the culmination of a significant amount of work from the Triangle team over the past two years to streamline the company’s portfolio. The decision will enable Triangle to focus on its highly-prospective conventional oil and gas activities, including the upcoming wells in the Perth Basin”.
The company says it will continue to support the operations of the Cliff Head oilfield until the completion of the transaction and its existing employees will remain working at the site as it transitions to the CCS project.
Meanwhile, it will turn its attention to its promising Booth-1 well in the North Perth Basin, after confirming earlier this week that drilling will kick off next month at the JV project it has in partnership with a couple of bigger oil players.
Triangle has farmed out a 50 per cent interest in its L7 and EP437 Permits, which also hosts the Becos oil prospect, to Strike Energy and New Zealand Oil & Gas, which will each hold 25 per cent of the JV. The company’s share of the cost of the Booth-1 well is estimated to be less than $1.5 million.
Management says the Booth prospect hosts a prospective resource range of between 113 billion cubic feet of gas (Bcf) and 540Bcf, with a best estimate of 279Bcf. Additional potential is believed to exist for oil or gas in the overlying Dongara and Jurassic sandstones.
The Booth-1 well, in the east of the JV’s L7 Permit, is the first hole to be drilled in the new campaign and will be the first well drilled within the JV’s two permits in the Perth Basin for 30 years.
The JV also has Becos “locked and loaded” as the second target in its soon-to-begin campaign. Becos lies about 16km west of Booth. Triangle says the target is expected to be drilled in September, subject to Environmental Protection Authority and final JV approvals.
Looking for a possible third well, the company says it has other gas target candidates lying within the L7 Permit. The most appealing is its Huntswell Deep prospect, a previously unmapped structure that was identified on 3D seismic about 6km north-west of Booth.
Management says new oil prospects are being routinely identified by data re-evaluation and modern modelling of seismic and other data, adding to its portfolio of exploration targets within the two permits.
Triangle’s decision to sharpen its focus on the potential of its Perth Basin permits may soon put a gassy strut in its step.
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By Craig Nolan
