Energy giant ConocoPhillips has formalised its intent to acquire total control of a promising offshore gas venture, issuing a buyout notice to its cash-strapped junior partner, 3D Energi (ASX:TDO).
The move follows a period of financial turbulence for the Melbourne-based explorer, which was forced to suspend its shares in late January after failing to meet "cash calls" required to fund its portion of exploration costs.
Under the terms of their joint venture agreement, the two companies have now entered a critical valuation window to establish a "fair market value" for 3D Energi’s 20% stake in the VIC/P79 permit.
Located in the Otway Basin off Victoria’s west coast, the permit has recently emerged as a focal point for regional energy security.
Late last year, the partnership celebrated a gas discovery in its inaugural exploration well, though a subsequent second well yielded more complex results within a less certain geological formation.
ConocoPhillips Australia confirmed the strategic pivot, stating the increased equity is designed to streamline the transition from exploration to potential development.
A spokesperson for the US heavyweight noted that the company is eager to progress plans for the recent natural gas finds, provided the project meets rigorous commercial viability standards.
If a valuation agreement is reached, ConocoPhillips will have 30 days to exercise its buyout right.