VIC/P79, Otway Basin

3D Oil holds 20% participating interest in the VIC/P79 exploration permit. The permit covers 2,575km² of the offshore Otway Basin and is located adjacent to the producing Thylacine and Geographe gas fields (Operated by Beach Energy Limited (ASX: BPT)) and the La Bella gas discovery (Figure 1).

The permit builds on a strong portfolio of leads and prospects already defined in nearby T/49P (owned 20% TDO), which will likely further grow after the processing and interpretation of the Sequoia 3D Marine Seismic Survey (MSS), recently acquired by operator ConocoPhillips Australia (COPA). In conjunction with T/49P, the Company has now strategically gained exposure to >60% of Otway Basin exploration by area.

Figure 1 – VIC/P79 location relative to surrounding fields and infrastructure

Exploration Rationale

Exploration permit VIC/P79 (Figure 1) covers a large area with little exploration drilling, with water depths ranging from 100-200m. The eastern half of the permit lies within the Shipwreck Trough and is proximal to the largest gas discoveries in the basin, Thylacine and Geographe. In addition, the La Bella gas discovery flanks the permit to the north on the margin of the Mussel Platform, pointing to a rich-gas prone petroleum system operating within the permit.

TDO bid aggressively in the Offshore Acreage Release to secure the sought-after permit having recognised the previously overlooked Vanguard Prospect in the eastern half of the acreage, characterised by Direct Hydrocarbon Indicators (DHIs) such as flat spots. Accordingly, TDO bid a well in the primary term, which was designed to progress Vanguard to drill-ready status. The acquisition of a DHI supported prospect situated within the proven gas fairway of the region greatly upgrades the Company’s position within the Otway Basin. The basin has witnessed a significant success rate for almost two decades due to the identification of DHIs.

The area to the west of the Nautilus-A1 and Triton-1 wells is under explored, with no exploration wells and 2D seismic of varying quality. In-house regional evaluation suggests this area may also host prospective reservoir and seal sections, the potential extension of existing plays to the northeast. Proximal discoveries include Henry, Netherby and Pecten fields. The secondary term will focus on the acquisition and processing of a new 1000km² 3D seismic survey in the west, with the intention of searching for additional closures.

Activities

VIC/P79 was awarded in February 2022 and shortly thereafter TDO embarked on an accelerated farmout campaign, given early expressions of interest in the permit and the well commitment in the primary term. Preliminary seismic interpretation has been ongoing through this time, leading to the identification of the Defiance and Trident leads, both exhibiting amplitude conformance with structure. Please refer to ASX Announcement dated 8 June 2022 for further information.

On 30 June 2022, the Company executed a Farmout Agreement (“FOA”) with ConocoPhillips Australia SH2 Pty Ltd (“ConocoPhillips Australia”) in relation to the offshore Victorian Exploration Permit VIC/P79 (TDO ASX Announcement, 1 July 2021). Under the terms of the FOA, ConocoPhillips Australia will acquire an 80% interest in the Permit and operatorship in exchange for an upfront payment of USD$3 million. ConocoPhillips Australia will also undertake to drill an exploration well as required by the permit’s Primary Term minimum work commitment (currently required by February 2025). The Company will be carried for up to USD$35 million in well costs, above which it will contribute 20% of costs in line with its interest in the Permit. At the date of this report, agreement is subject to conditions precedent, including the agreement and signing of a Joint Operating Agreement by both parties and required government/ regulatory approvals.

This second major deal with ConocoPhillips Australia is an outstanding result for the Company, especially given the timeline from permit award to farmout. It should be noted that the FOA is subject to conditions precedent, including the agreement and signing of a Joint Operating Agreement by both parties and required government/regulatory approvals.

Figure 2 – Lower Waarre depth map of the Vanguard Prospect showing the location and extent of the observed flat spot.

Prospectivity

Vanguard Gas Prospect

Vanguard is an east-west trending tilted fault-block trap located on the eastern side of VIC/P79 (Figure 2), approximately 5km northwest of Geographe Field between Geographe and the La Bella gas discovery. Vanguard is constrained by the La Bella and Investigator 3D seismic surveys and seismic interpretation shows the structure hosts stacked reservoir sands of the Waarre Formation. The structure’s potential was first realised through the identification of a flat spot within the Lower Waarre (Figure 3).

DHIs have been observed on the Investigator 3D MSS from three stratigraphic levels across the structure, ranging in depth from approximately 2200-2400mSS. Vanguard boasts a strong amplitude response, and potential Amplitude Variation with Offset (AVO), which is common to adjacent gas discoveries and producing fields and can indicate the presence of hydrocarbons. In fact, these gas signatures have been identified on 3D seismic data across most offshore Otway Basin gas discoveries throughout the last two decades.

Figure 3 – Vanguard structure on the Investigator 3D MSS with flat spot at the Lower Waarre.

Defiance and Trident Leads

Both Defiance and Trident leads are tilted fault block closures (Figure 4) directly down-dip from the La Bella gas discovery to the east and similarly exhibit amplitude conformance with structure (Figure 5). Defiance exhibits amplitude conformance with structure at both the Upper Waarre and Lower Waarre horizons, where the Upper Waarre horizon conforms with the deeper, larger gas zone at La Bella-1. The Defiance structure has an areal closure of 1.1-1.6km², however, approximately 50% of the Defiance structure lies outside of the permit to the north and east (Figure 4).

Trident has an areal closure of 1.9km² and exhibits amplitude conformance with structure at the Lower Waarre horizon only, what is commonly referred to as the Waarre A reservoir at in-board wells, based on the La Bella-1 well-tie. Amplitude conformance with structure is considered one of the most reliable and robust Direct Hydrocarbon Indicators (DHIs), representing buoyancy driven fluid phase boundaries (i.e., gas-water contacts), and significantly reduces uncertainty around the presence of hydrocarbons.

Figure 4 – Lower Waarre TWT structure map showing Defiance and Trident leads.

Figure 5 – Lower Waarre RMS amplitude map showing strong conformance of amplitude with structure. Note amplitudes extend beyond the permit towards the north.

Table 1: VIC/P79 Prospective Resources Estimate Gross Recoverable Gas (Bcf)

(100% Prospective Resources to TDO¹. Refer to ASX announcement 8-Jun-22)

The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.