PERTH-based Triangle Energy has acquired a 57.5 per cent stake in the Cliff Head oilfield offshore Western Australia from AWE, after the vendor lost patience with its other suitor for the stake, Elixir Petroleum.

Triangle will pay $3.2 million up front for the stake, having already paid a deposit of $819,777, plus a future royalty of US$5 per barrel for oil sales in excess of US$70 per barrel.

The deal is expected to be settled before the end of June, with the Triangle to fund the acquisition from its current cash reserves.

Triangle managing director Robert Towner said his company was in a strong financial position following the sale of its Pase asset in Indonesia and a significant cost reduction program the company had carried out over the past two years.

“The acquisition of a majority stake in the Cliff Head project is a major milestone for Triangle,” he said.

“The low up-front acquisition cost and positive cashflow in a current weak oil price environment provides exceptional leverage to Triangle shareholders.”

Elixir had signed an agreement to acquire the permit stake in October 2015, agreeing to pay $1 million for the stake alongside contingent payments over the next five years.

An exclusivity period between Elixir and AWE expired on 15 March, with Elixir saying in May that the signing of an agreement had been delayed for several months, due to low oil prices and industry uncertainty.

“The board of Elixir is disappointed that AWE chose not to engage with Elixir about the status of its sale process until this late stage,” the company said in a June announcement, adding that it would now assess other oil and gas production opportunities.

The Cliff Head oilfield is located 10 kilometres offshore and covers six square kilometres in Commonwealth exploration permit WA 286 P.

Producing since May 2006 from an unmanned platform, crude oil from the field is connected to the Arrowsmith onshore processing plant and then trucked to the BP refinery in Kwinana for processing, with over 14.8 million barrels produced to date.

With an effective sale date of 1 January, Triangle said a total of A$1.6 million in cash benefits from that production was payable to it up until the end of May 2016.

ROC Oil WA – a subsidiary of Chinese company Fosun International – is operator of the project with a 42.5% stake.