3D Oil Closes Farmout of Oz Otway Basin Permit
Sydney-listed 3D Oil June 11 said its wholly-owned subsidiary, 3D Oil T49P, has completed the farmout of T/49P in Otway Basin to ConocoPhillips Australia following the approval by the regulator National Offshore Petroleum Titles Authority.
Under the terms of the joint operating agreement, ConocoPhillips will hold an 80% interest in the permit and become the operator. 3D Oil will receive a A$5mn (US$3.5mn) cash payment in recognition of previous permit expenditure and ConocoPhillips will undertake the acquisition of a 3D seismic survey of not less than 1,580 km2 within the permit to which the company will make no financial contribution, 3D Oil said.
Upon completion of the acquisition, processing, and interpretation of the 3D seismic survey, ConocoPhillips may elect to drill an exploration well which will fulfill the current year six work programme obligation. In the event ConocoPhillips elects to drill such exploration well, 3D Oil will be carried for up to US$30mn in drilling costs after which it will contribute 20% of drilling costs in line with its interest in the permit.
“The completion of the farmout of T/49P to ConocoPhillips places 3D Oil in a unique and enviable position for a small-cap company – where there is a clear pathway to ultimately supplying gas to the east coast market. The company is very positive about its prospects. While global conditions are very challenging the potential for gas commercialization in eastern Australia is very promising,” 3D Oil said.
T/49P is located in the eastern offshore Otway Basin in southeast Australia and covers an area of 4,960 km2. The permit lies adjacent to the Thylacine and Geographe gas discoveries. 3D Oil was awarded the permit in 2013.