Australia-based Triangle Energy has joined many other oil and gas companies in efforts to preserve financial stability amid low oil price environment and coronavirus pandemic with a set of cost-cutting measures.
Triangle said on Friday that it had a strong focus on reducing operating costs even before the current oil price drop.
As a result, Triangle saw its lifting costs at its Cliff Head project decrease from more than $40 a barrel in 2017 to just $24.95 average from July 2019 to February this year.
Amidst the current extraordinarily low oil price, Triangle negotiated improved contracts with many of its suppliers including reduced office rent, lower rates with its air and marine services suppliers, and lower costs from its parts and equipment suppliers.
Triangle added that this had a substantial and immediate cost-savings impact on the business, positively influencing the cash flow position.
The company also implemented a temporary 30 percent salary deferment in respect of executive salaries for the managing director, chief financial officer, and chief operating officer, as well as directors’ fees by the same amount, with effect from May 1.
The oil and gas company reduced its operating costs and deferred non-essential planned and proposed capital expenditure this year of around $1.5 million which is expected to result in lifting costs falling to approximately $15.40 per barrel for the remainder of this financial year’s work program and budget, excluding trucking and non-routine costs.
Triangle managing director, Rob Towner , said: “We have excellent relationships with our suppliers, particularly those we use locally in the Perth Basin area and working with them we have managed to reduce our routine costs significantly. We are well ahead of the curve in that we re-invested into the Cliff Head asset when oil prices allowed it, and we are benefiting from that now and will continue to benefit in the future.”
The company further stated that its Cliff Head Alpha platform offshore Western Australia returned to a steady state at an average of 970 barrels of oil per day. It was temporarily shut down over an electrical fault but restarted production in March.
Triangle has a 45 percent interest in the offshore TP/15 joint venture in the Perth Basin and a 50 percent interest in L7(R1) Mt. Horner onshore discovery. The company and its joint venture partners are currently assessing investment budgets for both projects.
It is worth noting that the cashflow arising from its equity in the Cliff Head joint venture is used for wider Perth Basin geotechnical work and the Cliff Head Renewal Project.
Several workover, infill, and satellite drilling opportunities that could be drilled from the Cliff Head platform have been identified in and around Cliff Head field following a review of the subsurface opportunities in the first half of 2019.
Triangle said that it would be well-positioned to make an investment decision on these opportunities when business conditions improve. Success with these opportunities could extend the life of the Cliff Head platform and the onshore Arrowsmith oil stabilization plant.