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CHJV blackens bottom line ahead of new exploration

10 November 2021
ASX: TEG
Rueben Hale

The Cliff Head Joint Venture have vastly improved the economics of the Cliff Head decommissioning costs as the partner’s eye its next phase of production from its Western development and Southeast nose appraisal/development wells off the coast of Dongara in Western Australia, 

The field, majority-owned by ASX-listed Perth company Triangle Energy, covers a 72 square kilometre licenced production area producing around 800 to 900 barrels of oil per day from the offshore platform off the small Mid-West fishing town to an onshore production facility nearby. 

An updated independent estimate on the project has estimated decommissioning for Cliff Head related infrastructure at a reduced cost of AU$28.7 million from AU$39.5m, reported initially. 

Based on the same parameters as the previous studies, this estimate achieved the savings primarily due to the use of the hydraulic workover unit in plugging and abandoning the wells versus a more costly traditional jack-up rig.  

The technology has provided the above-expected return on investment for the company. The HWU is now considered an integral component in Cliff Head Alpha sound workover operations, proving operationally safe and cost-effective in the last three workovers CHJV has completed.  

Additionally, the availability of the 40 per cent Petroleum Resource Rent Tax will further bolster the bottom line, reducing the theoretical net decommissioning cost to the CHJV to an assumed AU$17.2 million.  

“This is pleasing news to the Cliff Head Joint Venture as it gives us an updated, and therefore a more accurate estimation of the Cliff Head decommissioning cost,” managing director Robert Towner said.  

“Consequently, this has significantly reduced the provision recorded in the financials of the CHJV partners in their favour.   

“This new estimate is a positive result for the CHJV. At present, the focus of the CHJV is to expand production and extend field life with the drilling of the Cliff Head Mark II opportunities.   

“The Western Development and SE Nose appraisal/development wells could extend Cliff Head field life to the late 2020s based on the announced Contingent Resources.   

“The Mentelle exploration well could extend Cliff Head field life beyond 2030 on a successful outcome. These three wells can be drilled from Cliff Head Alpha platform and tied-in for near term production.”     

TEG’s Australian Stock Exchange-listed shares were trading at 1.7c (11:47 am UTC+8 hours) 

COMPANY OVERVIEW

Triangle Energy (Global) Ltd (ASX:TEG) is an ASX listed oil producer and explorer based in Perth, Western Australia. The Company has a 78.75% interest in, and is Operator of, the producing Cliff Head Oil Field, which includes the Arrowsmith Stabilisation Plant. Triangle also has a 50% share (increasing to 100%) of the L7 production licence with a 13% share (going to 100%) in the adjacent EP 437 permit and a 60% share of the Xanadu-1 Joint Venture, both located in the Perth Basin. Triangle also has a substantial equity interest in State Gas Ltd (ASX:GAS), which has an interest in four permits in Queensland.

COMPANY INFORMATION

ASX: TEG

Website

https://triangleenergy.com.au/
https://www2.asx.com.au/markets/company/teg

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