Join our daily newsletter At The Bell to receive exclusive market insights
Triangle Energy (ASX:TEG) has been given the green light for a carbon sequestration (CCS) project to go ahead at its WA 31-L icence area in the Perth Basin.
The company announced today that the joint venture’s application for a greenhouse gas storage formation over the WA 31-L licence area has been approved by the Commonwealth Minister for Resources, Madeleine King.
This approval triggers the sale of Triangle’s 78.75% interest in the Cliff Head project to Pilot Energy. Until this has been approved by the regulator,Triangle will continue to operate the Cliff Head field.
Triangle said existing employees will continue to work on the Cliff Head field as it transitions from oil production to the CCS project. Triangle will also support the ongoing operations of the Cliff Head oil field until the transaction completes.
Pilot is expected to pay Triangle up to $15 million over the CCS project life comprising $3 million in cash, $4.5 million in cash when NOPTA issues a Greenhouse Gas Injection License as part of the next phase and up to $7.5 million in royalties from the CCS project
The divestment of Cliff Head removes any associated liabilities from Triangle’s balance sheet and leaves the company well positioned to focus on its upcoming Booth-1 and Becos-1 wells in the Perth Basin.
Triangle Managing Director, Conrad Todd, said: “We are very pleased to have received approval from the Federal Minister for Resources for the Cliff Head CCS project. This is a major milestone for both companies and, importantly, the culmination of a significant amount of work from the Triangle team over the past two years to streamline the Company’s portfolio.
“The decision will enable Triangle to focus on its highly prospective conventional oil and gas activities, including the upcoming wells in the Perth Basin.
“With the Booth-1 well expected to spud in late July, Triangle is on the verge of the most active period in the Company’s recent history, and we look forward to keeping our shareholders updated throughout this exciting period.”
TEG was trading 2% down at 2.1 cents.
