Australia’s 3D Oil Limited and ConocoPhillips have executed a joint operating agreement (JOA) in relation to the offshore Tasmanian Permit T/49P, which satisfies a key condition of the farmout agreement (FOA) signed in December 2019.
Completion of the farmout will occur following government approvals, 3D said on Thursday.
Under the terms of the JOA, ConocoPhillips Australia will hold an 80% interest in the permit and become the operator.
Under the FOA, the company will receive a A$5 million ($3M) cash payment in recognition of previous permit expenditure and ConocoPhillips will undertake the acquisition of a 3D seismic survey of not less than 1580 sq km within the permit to which the company will make no financial contribution.
3D Oil received approval from the Australian offshore regulator for the survey over the T/49P – named the Dorrigo survey – in May 2019.
Under the terms of the original FOA, 3D Oil 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 its exposure to joint operation expenses.
Under the terms of the revised FOA and JOA, 3D Oil will contribute 10% of the joint operation expenses until ConocoPhillips Australia has completed an exploration well or spent at least $30 million toward drilling of an exploration well.
Upon completion of the acquisition, processing, and interpretation of the 3D seismic survey, ConocoPhillips may elect to drill an exploration well, which will fulfil the current Year 6 permit work commitment.
In the event ConocoPhillips elects to drill such exploration well, the company will be carried for up to $30 million in drilling costs after which it will contribute 20% of costs in line with its interest in the permit.