WA-based oil producer Triangle Energy Global has banked a cool $10 million through a binding farmout agreement with New Zealand Oil & Gas (NZO) for 25 per cent of its L7 production licence and EP 437 exploration permit.
Following the separate sale to Talon Energy in December last year of another 25 per cent slice of its permits, Triangle retains a 50 per cent stake of its original tenure. The company says finalising the farmout deals will cover the costs of acquiring and processing its Bookara 3D seismic project and and will also help fund the vast majority of planned exploration across its zones.
Management believes both L7 and EP 437 could host considerable gas reserves and will next year try to unlock the site’s resource potential via a trio of new exploration wells.
L7 is positioned south of Geraldton in the Perth Basin and earlier work by Triangle suggests it holds a best-case prospective resource of 617 billion cubic feet of gas within five key features. The allure of L7 is also linked to the site’s relationship with the Dampier-Bunbury Natural Gas Pipeline which runs through its tenure.
The pipeline is one of WA’s most critical pieces of infrastructure in the energy sector and carries natural gas to customers across the State. Stretching acrtoss 1500km, it is Australia’s longest natural gas pipeline and L7’s proximity to the asset means a potential discovery could be readily-dispersed to WA-based customers.
The second of Triangle’s recently farmed-out permits, EP 437, is an onshore basin positioned on the flank of the North Perth Basin and runs adjacent to the Dongara oil and gas field in the Great Northern city of Geraldton.
To eliminate exploration risk associated with drilling at L7 and EP 437, the company bought a suite of 3D seismic data known as “Bookara”, which covers the two permits. Triangle believes merging the data with its existing information could deliver a better understanding of the area’s regional prospectivity and ultimately drive discovery.
Triangle’s new $9.96m deal with NZO is made up of $1.9 million for the outlay funding costs associated with the Bookara dataset and $6.56 million related to the drilling costs of two planned holes in L7. Another $1.5 million has been allocated for a well in EP 437.
Triangle Energy Global managing director, Conrad Todd, said: “We are delighted to welcome New Zealand Oil & Gas, who have production interests in both New Zealand and Australia, to the Joint Venture. We are keen to now progress our exploration plans to drill these exciting blocks in the Perth Basin together.”
With the ink drying on a newly-formed joint venture, Triangle will no doubt be keen to roll up its sleeves and see what the new partnership can uncover across its potentially gas rich WA acreage as the year rolls on.
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By Matt Birney
