Shares in two Perth Basin oil players plunge after payment dispute

Investors deserted the owners of the shuttered Cliff Head oil platform off the WA coast after Triangle Energy told the market on Wednesday morning that its venture partner, Pilot Energy, had missed a $900,000 payment.

After trading finished, Pilot announced it had advised Triangle on Monday that the payment could not be made until next week.

The open disagreement pushed the Triangle share price down by a third, and Pilot scrip plunged 50 per cent, tanking the value of the two companies to $8.4 million and $8.2 million, respectively.

Pilot secured $2 million of convertible note funding on December 11. On Wednesday it said had not yet received the funds but they were due by December 24, which would allow Triangle to be paid.

On Thursday morning Pilot requested a trading halt until no later than December 23 to allow it to make an announcement about the convertible note funds.

Together, the two companies own the Cliff Head platform off the coast near Dongara and a processing plant in Arrowsmith. Eighteen years of oil production ended in September.

The disputed payment is part of a complex and protracted deal for Pilot to buy Triangle's 79 per cent stake in Cliff Head and Arrowsmith and turn it into a carbon storage and ammonia project.

Pilot made the first payment of $2.4 million to Triangle in October despite it not having received all the regulatory approvals required to assume full ownership.

Pilot is now responsible for all the operating costs of the offshore and onshore facilities it part owns that are no longer producing revenue.

Triangle was due a second payment of $4.1 million on November 29, but instead, the two companies halted trading for a few days and then announced a new payment schedule totalling $5.75 million.

Wednesday's disputed payment was the first of the agreed payments, with five others to follow in the first half of 2025.

If Pilot is awarded a license to inject CO2 into the Cliff Head reservoir, Triangle will receive a further $4 million and could receive up to $7.5 million in royalties if the carbon storage project proceeds.

An additional benefit to Triangle from the deal is that it will no longer be directly liable for the cost of decommissioning the Cliff Head platform and oil field.

However, due to amendments to federal legislation following the financial failure of the Northern Endeavour oil production vessel in the Timor Sea in 2019, Triangle is liable if the new owner, Pilot, cannot pay.

Using the existing Cliff Head facilities, Pilot wants to develop a carbon storage business starting in 2029 and produce clean ammonia. It is negotiating with a group of South Korean companies about possible investment in what it dubs the Mid West Clean Energy Project.

Triangle and Pilot shares are down 84 per cent and 81 per cent, respectively since the start of the year.