MELBOURNE: The founder and chief executive of 3D Oil Ltd, Noel Newell, anticipates that the West Seahorse JV with Malaysia's Hibiscus Petroleum Bhd "would be in a good position to repay borrowed funds within the first year of production."
Newell is also excited about the offshore exploration permit T/49P, a 4,960 sq km block which lies just south of Thylacine, one of the biggest gas fields in Australia's southern waters. Thylacine is partly owned by billionaire T. Ananda Krishnan.
Newell spoke to PESA Resources, the official publication of the Petroleum Exploration Society Australia, in a wide ranging interview about 3D's prospects, published in the magazine's December 2013 edition. Hibiscus Petroleum owns a 50.1% operating stake in West Seahorse and 13% of 3D Oil stock.
Newell's comments to PESA have obvious implications for Hibiscus, which may well replicate oil veteran Ananda's success in Australia's southern waters.
Newell expects to tie-in the West Seahorse project to other 3D projects in the surrounding area. "Sea Lion (oil well) is the next cab on the rank and we intend to drill that prior to West Seahorse," he said.
"In the event that it is a discovery, it would be fantastic as it can be tied into the West Seahorse project, adding overall financial strength to the project. The West Seahorse, Seahorse and Sea Lion structures are all in a row."
3D Oil Commercial and Exploration manager, Andrew Adams, said that assuming there was a discovery, by the time the company got Sea Lion producing, it would be balancing the decline at West Seahorse. "Sea Lion thus brings the huge potential upside to the project," he added.
The West Seahorse project lies within the VIC/P57 permit, which covers about 483 sq km.
It lies within the Gippsland Basin and according to PESA Resources, it is flanked to the south by several oil and gas fields, notably the giant Barracouta and Snapper gas fields.
"Gippsland fields have some of the best reservoirs you will see in the world," said Newell.
"When Esso first came to the Bass Strait, they could not believe the quality of the reservoirs, which are also underpinned by an incredible water drive. Thus after all these years of production in Gippsland, the decline there has not been that severe."
Ananda's Benaris International NV owns 27.77% of the Thylacine field, and was the original holder of the T/30P exploration permit which includes the Thylacine field, as well as the Geographe field which has recently started producing.
Three years ago the entire project was valued at roughly RM5bil. In contrast, 3D Oil has a market capitalisation of about RM100mil, while Hibiscus's market capitalisation is about RM1.1bil.
It is left to be seen whether Newell's expectations are fulfilled, and how the results are reflected in Hibiscus's share price. - Bernama
TDO Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
