New Zealand Oil & Gas (ASX:NZO) has signed a binding Term Sheet with ASX-listed energy company Triangle Energy (Global) (ASX:TEG) to acquire a 25% interest in Triangle's L7 and EP 437 northern Perth Basin permits in Western Australia.

NZO will contribute A$1.9 million towards past expenditure on the recently acquired Bookara 3D seismic data and fund the exploration activities for the permits.

The exploration wells will target the Early Permian-aged reservoirs identified by the seismic survey, which are analogous to recent discoveries in adjacent permits.

The cost of all existing rehabilitation and restoration obligations for L7 and EP 437 are to be borne exclusively by Triangle.

NZO CEO Andrew Jefferies said the farm in provides a low-cost entry to the Perth Basin and has potential to drive significant value.

The costs of the farm in and exploration program will be funded from NZO's existing cashflows.

Triangle will be appointed Operator of the joint venture once established.