Tri Star backs Omega Oil & Gas with $4.9m strategic investment

Major global oil and gas investment group Tri-Star will pick up 15% of Omega Oil & Gas via a $4.9m placement being done at a premium to the current share price.

Tri-Star will pick up new shares in Omega Oil & Gas (ASX:OMA) at 20c apiece, a nearly 18% premium to the price of OMA shares at close of trade on Thursday.

For over 40 years, Tri-Star has been involved as an operator, non-operator, and investor in major exploration, appraisal, development and production projects across Queensland, South Australia, the Northern Territory, and the Permian Basin in Texas.

Tri-Star’s investment is a vote of confidence in Omega, and demonstrates the value of the company and its assets in the Permian deep gas prospects in the Surat and Bowen basins in southeast Queensland.

The strategic partnership is a lucrative one for Omega, with Tri-Star having considerable geological, technical and commercial expertise, historically drilling Queensland’s first commercial coal seam gas well and discovering some of the world’s best coal seam gas fields.

“Attracting a significant shareholder with Tri-Star’s proven track record on the east-coast of Australia and distinguished technical acumen speaks to Omega’s status as a bona fide player in the deep gas space,” OMA independent chairman Stephen Harrison said.

“As we move into a period of uncertainty within the oil and gas sector, energy markets and broader capital markets, striking a deal of this nature on favourable terms to existing shareholders will help the company navigate uncertainties and further de-risk our high-impact exploration plans.”

A potentially transformational deep gas resource

Omega will use the cash to fund exploration and appraisal activities associated with the Canyon field, which comprises two highly prospective exploration permits – ATP2037 and ATP2038, in the Surat and Bowen basins.

The primary exploration target of the Canyon field is deep Permian basin centred gas in the Bowen Basin, with two vertical exploration wells planned to test the play at depths of up to 4,000 metres.

The target geology is analogous to prolific coal seam gas fields like Santos’ (ASX:STO) Fairview and Arcadia gas fields and Origin Energy’s Spring Gully gas field but located at substantially deeper depths.

This has the potential to be a multi-trillion-cubic-feet (Tcf) opportunity, Tri-Star says.

“Omega have assembled a suite of high-quality assets and are well placed to execute the Canyon drilling program in 2023,” Tri-star country manager, Australia Andrew Hackwood said.

Omega is gearing up to execute its two-well Permian Deep Gas exploration program within ATP 2037 and 2038 in Q1 2023.

The company’s Surat Basin acreage spans over 250,000 acres and is around 50km from existing gas infrastructure and pipelines which feed into the Aussie east coast gas market and Gladstone LNG export terminals.

The plan is to test the Permian Deep Gas potential of tight sandstones within the Permian Kianga Formation, which has an independent prospective resource of 3TCF of gas and 233 mmbbl of associated liquids.

“The company’s focus for 2023 remains to work towards unlocking a potentially transformational deep gas resource in the Taroom Trough,” managing director Lauren Bennett said.

Billionaire backing

Omega only made its ASX debut in late October following an oversubscribed IPO that saw the billionaire Flannery family join the register with a substantial investment in the company.

“In the last year alone, Omega has made exciting progress towards this goal, by not only assembling a first-rate team, but also by raising over $24 million in funding,” Bennett noted.

“Both the team and the capital we have raised this past year is a testament to the quality of the assets and the confidence in Omega’s prospects.”

As part of this latest investment, Tri-Star will have the opportunity to nominate a director, as long as it maintains a 10% stake in Omega.

The companies will also form a Technical Committee to share exploration and drilling knowledge.

“Through this placement with Tri-Star, Omega will have access to Tri-Star’s notable technical resources, which not only expands the company’s operational base, but through the shared learnings from Tri-Star’s exploration of black-alley shale formation in Fairfields, also expands the company’s understanding of the basin-centred play,” Bennett said.

“Aligning ourselves with the Tri-Star team is further validation of our success to date and we are looking forward to a strategic partnership with a like-minded and well-respected group.”

This article was developed in collaboration with Omega Oil & Gas Limited, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.