Triangle’s Cliff Head Sale Hinges on Pilot’s Carbon Sequestration Success
Triangle Energy has signed binding agreements to sell its onshore Cliff Head assets to Pilot Energy, marking a strategic shift to focus on oil and gas exploration in the Perth Basin.
- Sale of Cliff Head onshore assets to Pilot Energy for $5.56 million secured promissory note
- Total anticipated payments to Triangle around $6.6 million including interest and cash components
- Pilot to continue operating costs and convert facilities into a carbon dioxide sequestration project
- Further payments contingent on greenhouse gas injection license approval and royalties
- Triangle retains securities over Pilot and Royal Energy until debt repayment
Strategic Asset Sale Finalized
Triangle Energy (Global) Limited has reached a significant milestone by signing binding documentation to sell its onshore Cliff Head assets to Pilot Energy Limited. This transaction follows the initial announcement in March 2025 and represents a key step in Triangle's ongoing strategy to streamline its portfolio and sharpen its focus on oil and gas exploration and development within the Perth Basin.
Deal Structure and Financial Terms
Pilot Energy has acquired the onshore assets, including the Arrowsmith freehold land and associated infrastructure licenses, through a secured promissory note valued at AUD 5.563 million. This note, accruing interest at 10% per annum from June 30, 2025, is set to mature by September 30, 2026, or earlier if Pilot sells a material interest in the Cliff Head Joint Venture. Additionally, Pilot will make a one-off cash payment of AUD 167,000 to Triangle in August 2025 to account for deferred interest accrual. Collectively, Triangle anticipates total payments of approximately AUD 6.6 million from this arrangement.
Operational Continuity and Future Prospects
Under the agreement, Pilot Energy will assume responsibility for all operating expenses of the Cliff Head assets, ensuring ongoing management and maintenance. Notably, Pilot plans to repurpose the facilities into a carbon dioxide sequestration project, aligning with broader environmental and energy transition trends. Triangle will maintain extensive securities over Pilot and its subsidiary Royal Energy until full repayment of the secured loan, safeguarding its financial interests.
Contingent Payments and Strategic Focus
Beyond the secured note, Pilot has committed to further payments totaling AUD 4.5 million upon approval of a greenhouse gas injection license, as well as up to AUD 7.5 million in royalties from the project. These contingent payments underscore the potential upside for Triangle as Pilot advances the carbon sequestration initiative. Meanwhile, Triangle's Managing Director Conrad Todd emphasized the company's renewed focus on exploiting its Perth Basin assets and pursuing value-accretive exploration opportunities, signaling a disciplined approach to capital deployment and growth.
Looking Ahead
While the onshore asset sale is now complete, the offshore portion of the Cliff Head project is expected to transfer to Pilot once it secures a funding partner. This phased divestment allows Triangle to concentrate resources on its core exploration activities while maintaining exposure to potential future upside through contingent payments and royalties.
Bottom Line?
Triangle’s Cliff Head divestment clears the way for a sharper exploration focus, but future returns hinge on Pilot’s carbon project progress.
Questions in the middle?
- When will Pilot secure the greenhouse gas injection license to trigger further payments?
- What timeline and partners are anticipated for the offshore Cliff Head asset transfer?
- How will Triangle deploy freed capital to maximize shareholder returns in the Perth Basin?
