Triangle Energy Completes Cliff Head Acquisition
THE ROADHOUSE BOWSER: Triangle Energy (ASX: TEG) has completed a Share Purchase Agreement (SPA) with Roc Oil Company Limited for the purchase of that company’s 42.5 per cent participating interest in and operatorship of the Cliff Head Oil Field and associated production facilities, located in the offshore Perth Basin of Western Australia.
Triangle Energy jointly (50/50) completed the SPA in partnership with Royal Energy.
Under the SPA, the headline consideration was US$3.750 million (Triangle US$1.875 million), effective from 1 January 2017, since when Triangle has received a cash flow benefit of approximately US$1.2 million.
Completion of the acquisition involved Triangle and Royal purchasing the operating entity of Cliff Head, Roc Oil (WA) Pty Ltd, which is to be renamed Triangle Energy (Operations) Pty Ltd, which also comes with an in-situ bank balance of $0.669 million (Triangle’s share being $0.527M).
“The company now controls 78.75 per cent of the Cliff Head and we see a great opportunity to progress exploration of nearby appraisal targets and the larger offshore Perth Basin while maintaining strong cash flow from our current production,” Triangle Energy director and chief financial officer Darren Bromley said in the company’s announcement to the Australian Securities Exchange.
“This acquisition, together with our 30 per cent farm-in interest in the TP/15 Joint Venture with Norwest Energy NL (NWE) to drill the neighbouring 160 million barrel Xanadu-1 prospect, provides Triangle immediate exposure to exploration upside along with additional strong exploration targets within the Cliff Head Oil Field.”
Triangle’s 78.75 per cent interest in Cliff Head came at a cost of approximately $5.7 million.
The company said estimated annual revenue from Cliff Head crude oil production sits around $30.4 million (Triangle $24.0M) based on US$50 per barrel and $0.75 AUD/USD exchange rate.
In June 2016 Triangle acquired a 57.5 per cent interest in the Cliff Head Oil Field from Australian oil and gas company AWE Limited (ASX: AWE.
Triangle declared the Cliff Head facilities to be the only offshore and operating onshore infrastructure in the Perth Basin and considers this to be a crucial factor for any development in the surrounding area.
“Cliff Head’s onshore Arrowsmith Stabilisation Plant is the only operating crude oil plant in the Perth Basin and is vital infrastructure in the development of exploration success by any explorer in the area,” Bromley explained.
“The Cliff Head Oil Field currently produces approximately 1,300 barrels of oil per day (bopd) gross through the Arrowsmith facility, which has a processing capacity of up to 15,000 bopd, so is more than capable of processing third party crude.
“The acquisition of Cliff Head, in partnership with Royal, provides Triangle with a cash flow generating operation, strong production rates, exploration opportunities and the capacity to service third party crude in the highly prospective and underexplored Perth Basin.”
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Website: www.triangleenergy.com.au