Triangle Energy (Global) Limited (ASX:TEG), an experience oil producer holding an established position in the Perth Basin, announced to have identified 3 new key prospects within the vicinity of its flagship operation, Cliff Head oil field that could be developed from the existing offshore Cliff Head Alpha Platform. The new prospects were uncovered as part of the Cliff Head Renewal Program (CHRP), which has now been completed.
The Cliff Head Renewal Project was initiated in 2019 to extend the economic life of the Cliff Head project and to also expand the production capacity.
For a detailed overview of CHRP, read CHRP: Perth Basin First Oil Operations Targeting Economic Life Extension
The Cliff Head Renewal Project concluded with three major outcomes-
- Best Estimate (2C) Contingent Resources of 3.52 MMstb gross with significant attributable portion pertaining (2.77 MMstb) to TEG‘s stake
- Best Estimate Prospective Resources totalled 9.46 MMstb gross for WA-31-L Prospects, of which 7.45 MMstb is attributable to Triangle Energy
- Confirmation of 3 attractive opportunities for drilling and development from the existing Cliff Head offshore alpha platform
Updated estimates of the unrisked Contingent Resources and Prospective Resources for the Cliff Head Project-
Under Cliff Head Renewal Project (CHRP), TEG conducted multiple sub-surface studies since the second half of 2019 to evaluate the prospectivity of the already identified opportunities, which are now subject to the final investment decision. Extensive reservoir mapping and interpretation, reprocessing of 3D seismic data, depth conversion studies, and dynamic modelling of the field and remote prospects were completed.
The completion of CHRP, resulting in three priority drilling targets and new opportunities, reinforces confidence in higher oil throughput in future and longer economic life for the operating asset.
Three Priority Drilling Targets - Mentelle Updip, West High and SE Nose
Mentelle Updip Prospect – The Mentelle Updip prospect was extensively reviewed and led to upgrade of Best Estimates of the Prospective Resources to 5.2 MMstb, from 3.3 MMstb previously. Chances of discovery at the Mentelle Updip have been estimated as 38% and 34% for a commercial discovery.
Given the matured nature of the Mantelle Updip prospect and on the back of sufficient resource potential, it may extend the life of the Cliff Head operations.
West High Appraisal/Development Opportunity – The West High prospect is a probable extension of the Cliff head field that could be drilled via a deviated appraisal well from the alpha platform and further could be developed as a production well in the event of successful discovery. The Best Estimate Contingent Resources have been estimated at 0.95 MMstb.
SE Nose Development – The Best Estimate of Contingent Resources stand at 1.01 MMstb with reclassification to reserves contingent on the JV’s approval to a development well.
CH11 Upward Recompletion – The conversion of the CH11 water injection well to an operating oil well was found to be uneconomic, given that the fault block is currently being utilised by the CH13 well, which shares the oil pool.
New Opportunities - Catts Prospect and Far North
The 2 new identified features from the CHRP make additional promising prospects for project life extension and ramping up the production capacity.
Best estimates for the Prospective Resources for Catts Prospect was assessed at 0.77 MMstb with 45% chance of discovery and 35% chance of a commercial discovery. This prospect has been confirmed immediately SSW of the operating Cliff Head platform.
Although, Far North is currently in early exploration stage, Best estimates (2C) for Contingent Resources stand at be 0.4 MMstb.
Mentelle Updip holds substantial opportunity to extend the project economic life while the other two prospects, West High and SE Nose may help in achieving higher oil throughput.
TEG anticipates commencing the detailed well planning and a drilling program at appropriate time. The management is excited to pursue the opportunities, which may lead to additional and long-term value generation for shareholders, community, and the Perth Basin.
Triangle Energy Well Placed in Low Oil Price Environment
Amid the low oil price environment, Triangle Energy operates a well-placed oil business with competitive lifting and operating costs. The Company proactively announced various cost remediation measures even prior to the major slide in crude oil prices, including revised pricing on contracts with suppliers and deferment of non-essential capital for the year.
To know more about cost-cutting measures announced by Triangle Energy on 3 April 2020, read our coverage on the announcement by clicking here.
Triangle Energy being a domestic oil producer of Australia, which imports ~78% of the crude oil, is well placed in the current environment as anticipated by the Company following the cost reduction measures.
TEG traded at $ 0.023 a share on 23 April 2020, with a market capitalisation of $8.66 million. The oil producer has substantial investments of $ 17.69 million (as of 23 April 2020) through 32.71% stake in State Gas Limited (ASX:GAS) and held cash of $3.68 million with minimal debt ($0.87 million) as of 31 December 2019.
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