Triangle Energy entered into a deal with AWE Ltd. for 57.5% stake in the Cliff Head oil field, in the offshore Perth Basin, Western Australia.
The Cliff Head oil field is located 10km off the coast of Western Australia at a water depth of 15-20m. The field covers 6sq km in the Commonwealth exploration permit WA - 286 - P and was the first commercial oil discovery developed in the offshore Perth Basin. The development cost of the field was US$244 million (A$327 million) with first oil production commencing in May 2006. To date, the field has produced over 14.8 MMbbl and continues to produce at above originally forecast rates.
ROC Oil, a subsidiary of Fosun International, is the operator of the field and holds a 42.5% interest.
Oil production from the Cliff Head field is produced via an unmanned offshore platform connected to the Arrowsmith onshore processing plant by twin 14km production and injection pipelines. Crude oil is trucked to BP at their Kwinana refinery south of Perth.
Under the agreement, the total upfront consideration is nearly $2.4 million (A$3,214,276). Triangle will pay AWE a royalty of $5/bbl for oil sales in excess of $70/bbl.
“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,” Robert Towner, Triangle managing director said. “Triangle is in a strong financial position following the recent sale of its Indonesian Pase' asset and the significant cost reduction program undertaken over the past two years. 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.”