ConocoPhillips has reached an agreement with 3D Oil to take a 75% interest and operatorship of an exploration permit offshore Australia in the Otway Basin, the U.S. major said Dec. 18.

Located west of King Island, exploration permit T/49P covers 4,960 sq km.

The company said the farmout agreement is conditional upon the signing of a joint operating agreement and regulatory consents. Once all agreement conditions are met, ConocoPhillips Australia said it will pay 3D Oil A$5 million and conduct a 3D seismic survey covering at least 1,580 sq km in the permit area.

ConocoPhillips may decide to drill an exploration well, following survey processing and interpretation of the survey, the company said.

“If exploration is successful and the field were to move to production, our intention would be to supply the gas to the Australian east coast domestic gas market,” ConocoPhillips Australia East President Nick McKenna said in a statement.

McKenna said the agreement reinforces ConocoPhillips’ commitment to operations in Australia.

The move comes about two months after ConocoPhillips said it agreed to sell its Australia-West assets and operations to Santos for $1.39 billion. The deal included the Barossa project and Caldita Field along with its 56.9% interest in the Darwin LNG facility and Bayu-Undan Field, 40% interest in the Poseidon Field and 50% interest in the Athena Field.

The company, however, retained its stake in and operatorship of the Australia Pacific LNG project, which is among its free cash flow drivers.

Offshore