Gippsland Basin focused 3D Oil (ASX: TDO) is poised to fast track development of its West Seahorse oil field offshore Victoria after shareholders of Malaysia’s Hibiscus Petroleum Berhad approved their A$27 million farm-in deal.
The partners aim to start production from the field in VIC/P57 within two years.
Hibiscus’s shareholders also approved an associated A$2 million subscription for 3D Oil shares.
These approvals satisfy the remaining conditions in the farm-in agreement and completion is expected in the following weeks.
Hibiscus Petroleum will take a 50.1% operating stake in VIC/P57, which contains the West Seahorse field.
The two companies have assembled a project team and are working together on engineering, planning and approvals for the West Seahorse development project.
3D Oil has already secured a regulatory "declaration of location" over the West Seahorse oil field offshore Victoria and a Production Licence application is expected to be submitted early next year.
Hibiscus managing director Dr Kenneth Pereira will also join 3D Oil’s board as a director.
Development of West Seahorse will begin with the drilling of two appraisal wells.
First discovered in 1981, West Seahorse holds best estimate Contingent Resources of 9.2 million barrels of recoverable oil about 14 kilometres off the Victoria coast.
3D Oil is investigating the potential of the Gurnard Formation that lies directly above the main reservoir to provide further upside to the Resource figures.
West Seahorse is close to producing oil and gas fields including ExxonMobil’s (NYSE: XOM) A$4.4 billion Kipper-Tuna-Turrum project where gas production is targeted for 2016.
Besides developing West Seahorse, the joint venture will also look into drilling an exploration well on the Sea Lion prospect.
Sea Lion is on trend with the West Seahorse, Seahorse, Wirrah, West Moonfish and Moonfish oil discoveries.
It targets the Upper Latrobe group reservoirs, similar to the West Seahorse field, and hosts best estimate prospective resources of 11 million barrels of oil.
Sea Lion also contains a deep gas prospect that with the permit's close proximity to shore and existing infrastructure, could be easily developed.
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