T/49P, Otway Basin

3D Oil Limited (ASX: TDO) was granted exploration permit, T/49P in the offshore Otway Basin in May 2013.

T/49P covers an area of 4,960 km2 in water depths generally no greater than 100m. The permit is lightly explored covered by a broad grid of 2d seismic data of varying vintages and has two early exploration wells. The Minimum Guaranteed Work Program is set out below. TDO currently holds 70% of the permit and in 2014 acquired the Flanagan, 974 square kilometre 3D seismic survey in the north of the permit. Processing and interpretation of this survey are currently underway.

Location map
Location map

T/49P Work Programme

The approved minimum work programme for the five-year renewal period is as shown below.

Indicative Expenditure (A$ Million)
Year Activity Gross Cumulative
1 1. Commence approval and planning process for seismic acquisition. $ 0.150 $ 0.400
2. G&G Studies, Seismic mapping, sequence stratigraphic study, basin modelling. $ 0.200
3. Reprocess 500km of 2D seismic. $ 0.050
2 1. Acquire and process 755km2 of new 3D seismic. $12.000 $12.400
3 1. Seismic Interpretation $ 0.250 $13.150
2. Geological and Geophysical studies $ 0.500 TOTAL $13.150

T/49P lies adjacent to the Thylacine and Geographe gas fields which have a combined gas in place (“GIP”) of over 2 TCF while the former is the largest gas discovery in the Otway Basin.

The evaluation of T/49P undertaken by TDO included a review of the existing seismic data and a full petroleum systems analysis. A number of strong leads were identified with combined GIP estimate of over 5 TCF. A petroleum system is interpreted active within and proven adjacent to T/49P.

Seismic line through T/49P
Seismic line through T/49P

TDO is of the opinion that the commercial attractiveness of exploring for gas in eastern Australia has been boosted by a strongly improving gas pricing environment for producers. In recent years, eastern Australian retail gas prices have begun to increase and pressures exist that are expected to consolidate these increases, including from such factors as:

  • Exposure to international pricing through LNG exports
  • The unwinding of major low cost, long term gas contracts

Market consensus indicates gas pricing of A$7 to A$9 per gigajoule (GJ) by 2015/16 with a likelihood of a short-term peak beyond this range. This compares to A$3.50 to A$4/GJ in recent years in eastern Australia

Several recent gas supply deals provide evidence that this increasing price environment is now being established in eastern Australia.

3D Oil’s Managing Director Noel Newell commented “Since completing the VIC/P57 farmout, the Company has been seeking opportunities to leverage our competitive knowledge advantage in the region and to broaden our portfolio. Gaining a foothold in the eastern Australian gas markets has long been a strategic goal for TDO. This is a significant step towards this goal. Our team have performed well in identifying, evaluating and now securing the T/49P opportunity. It will strongly complement the related oil-focussed exploration in our VIC/P57 permit.”