Oz 3D, ConocoPhillips Close to Signing Farmout Pact
Sydney-listed 3D Oil and ConocoPhillips Australia have signed a joint operating agreement to satisfy a key condition of the farmout of offshore Tasmanian permit T/49P, 3D said in a statement on March 26. Completion of the farmout will occur following government approvals.
Under the terms of the joint operating agreement, ConocoPhillips Australia will hold an 80% interest in the permit and become operator. Also, once the farmout agreement is signed, 3D will receive A$5mn (US$3mn) cash payment in recognition of previous permit expenditure and ConocoPhillips Australia will undertake the acquisition of a 3D seismic survey of not less than 1,580 km2.
As per the original farmout agreement, 3D was to retain 25% equity in T/49 however following further negotiations the company has decided to reduce its interest in the permit to 20%. This is in exchange for a reduction in 3D’s exposure to joint operation expenses, it said.
Under the terms of the revised farmout agreement and joint operating agreement, 3D will contribute 10% of the joint operation expenses until ConocoPhillips Australia has completed an exploration well or spent at least US$30mn toward drilling of an exploration well.
T/49P is located in the eastern offshore Otway Basin and lies adjacent to the Thylacine and Geographe gas discoveries. Thylacine Field is the largest gas discovery in the Otway Basin, located in southeast Australia, with 80% of the basin located offshore. The basin extends from South Australia to Victoria and Tasmania.