3D Oil (ASX:TDO) remains in discussions with Canadian oil and gas company Oracle Energy Corporation (TSXV:OEC) on the VIC/P57 farm-in and will also restart talks with other interested parties.
The company said that while progress had been made in due diligence on the farm-in over the last 3 1/2 months, Oracle had now said it was unable to finalise the definitive documentation and commercial terms in accordance with the original timetable and terms.
3D Oil had in November last year signed a non-binding term sheet with Oracle Energy to farm into VIC/P57 in the Gippsland Basin.
Under the agreement, Oracle Energy could earn up to 50% in the permit by carrying 3D Oil through drilling of two exploration wells to a cap of A$15 million each, or drilling just one well and spending the remaining A$15 million on other activities in the permit such as developing the West Seahorse field.
The deal was conditional on both companies signing definitive documentation by 17 February 2012 while closing the transaction is subject to Oracle Energy signing an engage letter to raise, on a best efforts basis, at least A$15 million in funding and approval from the TSX Venture Exchange.
3D Oil said the two companies will now progress discussions on a revised, non-exclusive basis, and that there was no certainty a revised term sheet would be reached.
In parallel, 3D Oil will recommence discussions with other parties, including those that have previously expressed an interest in VIC/P57 and 3D Oil.
Gresham Advisory Partners Limited has been retained to assist 3D Oil.
3D Oil is also on the lookout for a farm-in partner to drill an exploration well in T/41P to the south where it has started interpretation of the results from a recent 264 square kilometre 3D seismic survey.
This is aimed at providing a clearer understanding of the potential for hydrocarbon charge, reservoir quality and seals.
The company has also been active in looking past its two exploration permits, submitting bids in the November 2011 Australian offshore bid round.