Shares in junior oil and gas explorer 3D Energi Ltd (ASX: TDO) hit a new 12-month high, up more than 60%, after the company announced a new gas discovery off the Victorian coast.
The company, which was worth just $48.2 million at the close of trade on Friday, said that its joint venture partner, ConocoPhillips (NYSE: COP), had struck gas while drilling the Essington-1 well in the Otway Basin off the Victorian coast.
ConocoPhillips owns a 51% stake in the project and is the project operator, while Korea National Oil Company owns a 21% stake, and 3D owns a 20% stake.
Image source: Getty Images
Gas found but more work to be done
The Australian company said in a statement to the ASX on Monday that the Essington-1 drilling program had intersected two gas bearing reservoirs, with one having 58.5 metres of net gas pay while the second had 31.5 metres.
3D Energi said a comprehensive "formation evaluation program" had started over the weekend.
The company said in its statement to the ASX:
While these results are encouraging and support the presence of moveable hydrocarbons, recoverability and commercial significance will be assessed following wireline formation testing using Schlumberger's Ora platform.
3D Energi Executive Chairman Noel Newell added:
The early results from Essington-1 are very encouraging, with clear indications of gas-bearing sandstones in both the primary and secondary targets. While we remain appropriately cautious until formation testing is complete, these results are consistent with the comprehensive pre-drill technical evaluation undertaken by 3D Energi. We look forward to the upcoming Ora program to confirm gas composition and reservoir deliverability.
Gas shortfalls loom
With gas supplies on Australia's east coast tight, any new discoveries in the region will be welcomed by industry and government.
The Australian Energy Market Operator, in its 2025 Gas Statement of Opportunities, forecast earlier this year that there would be a risk of gas shortfalls in the coming years despite gas use declining.
As AEMO said at the time:
The risk of peak-day shortfalls and seasonal supply gaps in the southern states is expected to arise from 2028, with annual supply gaps emerging from 2029. New investment is needed to deal with structural supply risks from 2029 to maintain supply to homes and businesses including for gas-powered electricity generation. Various options are being considered by the gas industry, including new supply, transportation and storage projects, and LNG regasification terminals.
3D shares traded as high as 18.5 cents on the news – a new 12-month high – before settling back to be 47.8% higher at 17 cents.
