WA oil producer Triangle Energy Global closed the September quarter on a high, completing a flurry of activity including its first oil delivery to a refinery in Thailand using a new shipping route, acquisition of two onshore exploration permits and banking a slice of a $6.9 million pay packet courtesy of oil sales associated to its Cliff Head joint venture, or “CHJV” partnership with Pilot Energy.
The 50,000 barrel-plus delivery came as part of the pair’s CHJV– a collaboration that sees the duo undertake oil production activities at the Cliff Head field roughly 270km north of Perth and ship it off to buyers in Asia.
Included in the partnership is the Arrowsmith stabilisation plant and associated well infrastructure along with a pool of federal and state pipeline licences.
The tie-up is currently split 79/21 in favour of Triangle Energy however is seemingly on course for a revision after a recent announcement.
About three weeks ago, Triangle signalled its intention to reduce half of its stake in the partnership for a cool $1 million, a figure it expects to have banked by the second quarter of 2023, pending a government assessment of the pair’s planned carbon capture and sequestration proposal for the zone.
Triangle and Pilot tabled average production figures of about 590 barrels of oil per day at Cliff Head over the September period, a ratio it believes could be sustained for some time before the zone’s reserves are depleted.
Once dry, the duo aim to use the operation’s sub-surface reservoirs to store carbon produced by power generation and industrial activities in a process termed carbon capture and sequestration, or “CSS”.
Triangle has applied to have its reservoirs assessed for their carbon storage abilities by the Federal Government and if deemed appropriate will have its deal with Pilot reconfigured – potentially in time to be reflected in the second quarter of 2023.
The Perth-based oil player says the CSS development could extend the Cliff Head oil field’s shelf life by two decades and return a net present value of up to $210 million.
The company closed the period with $7.34 million in its coffers, down from a June quarter return of $13.84 million in part due to its purchase of a 3D seismic dataset associated to its newly acquired L7 and EP 437 exploration permits in WA and repair work at its nearby Cliff Head 10 well.
Triangle says the two permits could house as much as 617 billion cubic feet of gas and 19 million barrels of oil. The developer snapped up complete ownership of the assets from Key Petroleum in September for $600,000 in cash and $500,000 in shares to be issued on or before June 30, 2023.
The company previously held a 50 per cent stake in L7 and 43.5 per cent interest in EP 437.
To help on its new exploration front the company purchased a suite of 3D seismic data coined “Bookara” which stretches over the two permits. Triangle believes merging the data with its existing information could deliver a better understanding of the area’s regional prospectivity, ultimately leading to more discovery.
Over the September quarter, the company began processing the Bookara 3D data.
Corporate milestones over the period also include Triangle’s decision to sell off half of its interests in NSW-based energy company State Gas for $6.72 million. Despite the sale, Triangle still holds a 10.1 per cent stake in State Gas.
The company plans to plough the proceeds of the sale into ongoing development of its CCS, CHJV and onshore exploration projects.
Triangle has fought back from a challenging 2021, to table another solid quarter in 2022 – a notable turn of events considering where the developer was about a year ago.
The most notable challenge was perhaps BP Australia’s decision to halt oil handling and refining operations at its facility in Kwinana, leaving producers unable to get their liquids to buyers.
Whilst many in the space were left scratching their heads Triangle used 2022 to prove up a new oil shipping route, re-access its portfolio and double down on its new energy operations.
The company now moves into the fourth quarter with a suite of new opportunities and a marching gas price.
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By Matt Birney
