- Triangle Energy (ASX:TEG) receives an offer for nine offshore gas blocks in the UK alongside JV partner Orcadian
- Shares were unchanged in the first hour of trades with low volumes on the register
- The company has pointed to “modest” CapEx across the next three years, suggesting a slow burn
- Triangle is preparing to drill in the Perth Basin this year and continues to sell oil from Cliff Head alongside Pilot Energy
- Shares last traded at 2.5 cents
Triangle Energy (ASX:TEG) has expanded further its offshore gas portfolio in the UK, but at 10:45 am AEDT this morning, shares were unchanged at 2.5 cents.
A small volume of shares had moved by that time – 201,000 – versus 1.4 billion shares on issue.
The company has announced its receipt of an “offer of highly prospective UK gas exploration permits” alongside 50/50 JV partner Orcadian Energy, which holds rights as operator.
Triangle chief Conrad Todd described the company’s overall mood on the news as pleasing.
“These new blocks in the Central North Sea increases our UK portfolio and broadens Triangle’s asset base with further exploration upside,” he said.
“We look forward to advancing the UK assets whilst preparing to drill our exciting prospects in the Perth Basin this year.”
Progress will be slow
Mr Todd, referencing the new UK gas blocks announced today, described a situation where CapEx will be “modest” for “the next three years” – implying shareholders could be waiting a while for any meaningful developments to happen with a view to drills.
Triangle spruiked geological data it has on-file in its rationale for the decision, highlighting the potential to strike commercial quantities of hydrocarbons.
“The top reservoir [has] a distinct seismic response which when reprocessed and inverted, should allow more accurate mapping of the gas bearing reservoirs,” the company wrote.
The JV must also confirm a work program with regulator North Sea Transition Authority (NSTA).
Geotechs are hopeful that sandstone reservoirs lie underneath, but, the JV will be purchasing 3D seismic over two key anomalous targets already on the radar.
But with “modest” CapEx projections forecast, it’s unlikely that shareholders can expect to see a rapid pace to extraction.
So why the dulled reaction?
To be sure, by looking at activity on HotCopper this morning and taking a look at how many announcements have been released this morning – it’s a quiet day. So there’s that.
But Perth-based Triangle has been failing to win favour for years.
In 2019, the company’s shares were valued at the 12-cent range, but today, they are worth 2.5 cents.
The company was not able to exploit the energy thematic during COVID-19 and well and truly stands today as an unfortunate loser of that wave.
The price hasn’t gone more than 3 cents since May of 2021, despite the fact it has been producing and selling oil from Cliff Head in WA in recent history alongside Pilot Energy (ASX:PGY).
Perhaps a restructure to that JV in 2022 made the market somewhat cautious. Since Q2 2022, Triangle’s Cliff Head stake has reflected 42.5 per cent, and Pilot’s 57.5 per cent.
Or it could be that Triangle Energy, a microcap explorer, wants to take on a Carbon Capture and Storage (CCS) project, a technology that on paper is completely sound but in reality hasn’t really worked anywhere as described to date.
Chevron, for instance, have pumped billions of dollars into making CCS work in the north west shelf gas province of the WA Pilbara.
By its own admission, the company hasn’t quite yet been able to figure it out. Hopefully, somebody does soon, and that could maybe engender some confidence in Triangle’s ambitions.
There’s also the fact that Triangle doesn’t really have any of its own assets, relying on JVs – itself not unusual, but, perhaps not the kind of thing resources investors love.
Shares last traded at 2.5 cents.