Triangle Energy (Global) Ltd., a junior exploration and production firm in Australia, purchased a 57.5 percent interest in Cliff Head oil field in permit WA-31-L in the Perth Basin, offshore Western Australia, from AWE Ltd. for an upfront acquisition cost of $2.4 million (AUD 3.21 million) plus a future royalty of $5 a barrel for oil sales above $70 a barrel.
The company will fund the acquistion, which is expected to be completed on or before June 30, from its current cash reserves, including a paid deposit of $0.6 million (AUD 0.8 million). The effective date for the deal has been backdated to Jan. 1.
"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. The evaluation of oil and gas opportunities is a major ongoing endeavor for the Board and Management team of Triangle," Managing Director Robert Towner said in the press release.
"The acquisition of a majority stake in the Cliff Head project is a major milestone for Triangle. The low up-front acquisition cost and positive cashflow in a current weak oil price environment provides exceptional leverage to Triangle shareholders."
ROC Oil (WA) Pty Ltd., a unit of China's Fosun International Ltd.), is the field operator with a 42.5 percent stake. The field currently produces 1,300 barrels of oil per day, with 2P reserves estimated at 3.8 million barrels, excluding field life extension projects.
In a related development, Elixir Petroleum Ltd. expressed disappointment with the AWE-Triangle transaction on Cliff Head oil field, especially given earlier discussions it had held with Triangle for the latter to jointly acquire the upstream asset. "Elixir is currently reviewing its legal position with respect to those discussions," the company said in a press release.
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