- Talon Energy (TPD) strikes a $9 million farm-in deal with fellow ASX-listed Triangle Energy (TEG) over two key onshore oil and gas permits in WA’s Perth Basin
- Talon plans to earn a 25 per cent interest in the L7 production licence and EP 437 exploration permit in the area by funding exploration and well costs
- Triangle will operate the joint venture once established
- Talon says it will fund its initial $1 million upfront payment from existing working capital and the rest of the farm-in costs by cash flow generated from its Walyering gas project
- Shares in Talon Energy last traded at 17 cents on December 16, while Triangle shares last traded at 1.7 cents
Talon Energy (TPD) has struck a $9 million farm-in deal with fellow ASX-listed Triangle Energy (TEG) over two key onshore oil and gas permits in WA’s Perth Basin.
Under the binding term sheet for the deal, Talon will earn a 25 per cent interest in the L7 production licence and EP 437 exploration permit in the area, where Triangle is planning to drill several wells starting in 2024.
In return for its interest in the wells, Talon will pay Triangle roughly $1.9 million upfront to cover the costs of past exploration on the permits — $1 million upon the satisfaction of conditions typical to a deal of this sort and $900,000 before September 1, 2023.
Talon will then pay $7.36 million in well costs for three wells to be drilled across the licence areas in 2024.
Altogether, this equates to Talon fronting around $9.26 million for its 25 per cent interest in the permits. Triangle will then operate the joint venture once established.
TPD Managing Director and CEO Colby Hauser said the farm-in deal represented the culmination of over six months of work evaluating the potential of the northern Perth Basin for gas reserves to build on its existing assets.
“Talon is very pleased to be partnering with Triangle, a company that shares a similar corporate and technical ethos as Talon, and we look forward to both companies working closely together to leverage their combined expertise to continue to drive shareholder value through successful exploration,” Mr Hauser said.
Talon said it would fund its initial $1 million upfront payment from existing working capital, with the remainder of the farm-in costs to be funded by the cash flow generated from its 45-per-cent-owned Walyering gas project, also in WA.
Shares in Talon Energy last traded at 17 cents on Friday, December 16, and Triangle shares last traded at 1.7 cents.