KUALA LUMPUR (June 11): Hibiscus Petroleum Bhd's associate company in Australia, 3D Oil Ltd  (TDO), has completed the farmout transaction of its T/49P offshore field to ConocoPhillips Australia SH1 Pty Ltd (COP).

This follows the approval of documentation by the National Offshore Petroleum Titles Authority, TDO said in a disclosure to the Australian Stock Exchange, that was subsequently filed with Bursa Malaysia by Hibiscus.

According to Hibiscus' 2019 annual report, as at Oct 1, 2019, Hibiscus owned a 11.68% stake in TDO, which has 100% interest in T/49P located in the Otway Basin offshore Tasmania.

Under the terms of the joint operating agreement, COP will hold an 80% interest in the permit and become operator, said TDO.

"TDO's wholly-owned company 3D Oil T49 Ltd will receive a A$5 million cash payment in recognition of previous permit expenditure and COP will undertake the acquisition of a 3D seismic survey of not less than 1580 square km within the permit to which the company will make no financial contribution," TDO added in its disclosure.

"Upon completion of the acquisition, processing and interpretation of the 3D seismic survey, COP may elect to drill an exploration well which will fulfil the current Year 6 work programme obligation," the group added.

In the event COP elects to drill such exploration well, 3D Oil T49 will be carried for up to US$30 million in drilling costs after which it will contribute 20% of drilling costs in line with its interest in the Permit, said TDO.

The group said the completion of the farmout of T/49P to COP places the group in a unique position for a small-cap company — where there is a clear pathway to ultimately supplying gas to the Australia's East Coast Market.

While global conditions are very challenging, the potential for gas commercialisation in Eastern Australia is very promising, it said.

"TDO believes these conditions create opportunities for the company to exploit. The company is firmly focused on becoming a supplier to the burgeoning East Coast Gas market at a time of unique dynamics in local and global gas markets," it added.

At 3pm, Hibiscus shares were down 3.65% or 2.5 sen at 66 sen, after some 50.45 million shares changing hands. The stock has risen by 154% from its recent low of 26 sen on March 19.