By SHAZNI ONG / Pic By HIBISCUS PETROLEUM
HIBISCUS Petroleum Bhd’s associate company, 3D Oil Ltd, has executed a farmout agreement with ConocoPhillips Australia SH1 Pte Ltd for the T/49P exploration permit in the Otway Basin offshore Tasmania, which will see the company receiving A$5 million (RM13.71 million) cash from ConocoPhillips Australia in exchange for a 75% operated interest in the permit.
3D Oil currently holds a 100% interest in the T/49P exploration permit, which covers 4,960 sq km of the Otway Basin. The permit is located adjacent to the producing Thylacine and Geographe gas fields.
The company finalised its farmout campaign for T/49P with the aforementioned agreement execution with ConocoPhillips Australia on Dec 18, 2019.
“The beginning of this relationship represents an important step towards 3D Oil’s overarching strategy, to provide much needed natural gas to the starved east coast gas market,” it told the Australian Stock Exchange recently.
Under the main terms of the agreement, ConocoPhillips Australia will take operatorship of T/49P and will be transferred to a 75% interest in the permit.
3D Oil will receive a A$5 million cash payment in recognition of previous permit expenditure.
ConocoPhillips Australia will also acquire 1,580 sq km of 3D Oil’s seismic survey at no cost to 3D Oil, and may elect to drill an exploration well upon completion of the acquisition, processing and interpretation of the survey.
If elected, 3D Oil will be carried for up to the first US$30 million (RM123 million) of costs, after which it will contribute 25% of costs in line with its interest in the permit.
At the time of the statement, the agreement remains conditional on the signing of a joint operating agreement by both parties and required government approvals.
“This farmout represents a milestone transaction and ensures the company is well-positioned to continue executing on its strategy across its high-quality portfolio of assets, including the promising and highly prospective 100%-owned WA-527-P,” 3D Oil executive chairman Noel Newell said.