Cottesloe-based Triangle Energy Global has emerged as the new buyer for AWE’s majority stake in the Cliff Head offshore oil project in the Perth Basin.
Triangle will pay an upfront $3.2 million in cash to acquire oil and gas company AWE’s 57.5 per cent stake in Cliff Head, plus a future royalty of $US5 per barrel of oil for sales over $US70/bbl.
Cliff Head operator Roc Oil will retain its 42.5 per cent stake.
The deal follows news last Thursday that AWE had found a new buyer for its stake in the project, snubbing Elixir Petroleum, which had previously entered into an agreement to acquire the interest but was unable to meet commitments to the deal.
Settlement of the acquisition is expected to occur by the end of the month.
Triangle managing director Robert Towner said the deal was a major milestone for the company.
“Oil prices are at the lowest that we have seen for many years, but the price volatility in the commodity markets is a constant factor, and periods of uncertainty can present short to medium term opportunity,” he said.
“The low upfront acquisition cost and positive cash flow in a current weak oil price environment provides exceptional leverage to Triangle shareholders.”
In a statement, Elixir said it was reviewing its legal position.
"Elixir's board is disappointed to read that AWE and Triangle have concluded a transaction with respect to the acquisition of the Cliff Head oilfield, particularly given discussions earlier this year between Elixir and Triangle in relation to Triangle's potential participation in this project with Elixir," it said.
Triangle shares doubled in value to 0.2 cents each at 1:45pm.