Sydney-listed Key Petroleum on January 29 said it has entered into an agreement to sell its permits in Perth basin to fellow Australian explorer Triangle Energy.   

Key has entered into a sale and purchase agreement and royalty deed with Triangle to sell 50% participating interest in production licence L7. Also, Key and its subsidiary Key Midwest have sold a combined 86.94% interest in exploration permit EP 437 to Triangle.   

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Triangle will pay Key a cash consideration of A$600,000 (US$458,712) of which $A200,000 is payable as a non-refundable deposit unless Key does not obtain shareholder approval. Triangle will also pay any outstanding cash calls in respect of L7 based on an agreed work programme and budget plus a 5% gross overriding royalty payable on production from L7 and EP 437.   

On completion of the deal, the existing farmout agreement between Key and Triangle in relation to the L7 licence at Mt Horner announced in 2018 will terminate and the parties will release each other from all claims and liabilities in respect of L7 and the farmout agreement, the company said.   

Triangle has agreed to assume all of Key’s ongoing work programme commitments within EP 437, which now requires the acquisition of 20 km² of 3D seismic and the drilling of one well prior to the end of the third year of the permit term in May 2022 with a second discretionary well due by the end of the permit term in May 2023.   

Key said it remains an "active Australian explorer, with a renewed focus on maturing the east coast gas supply potential from its Cooper-Eromanga basin assets in Queensland."