3D Energi Disputes US$19.8M Valuation of Gas Stake as ConocoPhillips Eyes Buyout
Key Takeaways
- RISC Advisory has determined the Fair Market Value of 3D Energi's 20% participating interest in VIC/P79 at US$19.8 million (A$28.6 million), valued as at 6 February 2026.
- The valuation comprises US$13.0 million (risked) for the Essington Gas Discovery — applying a 51% Chance of Development to an unrisked NPV10 of US$25.4 million — plus US$6.8 million in exploration value across the Regia and Charlemont clusters.
- 3D Energi's Board has formally stated it considers the US$19.8 million FMV to materially undervalue the company's interest, and continues to contest the validity of ConocoPhillips' default and buy-out notices.
- ConocoPhillips (51% operator) has until 24 September 2026 to exercise its right to acquire TDO's interest at the determined FMV, less the default claim, applicable interest, and a JOA discount factor.
- As at the announcement date of 1 September 2026, ConocoPhillips had not yet exercised any right to acquire the interest following the FMV determination.
Independent expert values 3D Energi’s VIC/P79 stake at US$19.8 million
Independent expert RISC Advisory has determined the Fair Market Value (FMV) of 3D Energi‘s 20% participating interest in VIC/P79 at US$19.8 million (A$28.6 million), valued as at the default date of 6 February 2026. The Board of 3D Energi considers this figure to materially undervalue the interest. If the buy-out notice was validly issued, ConocoPhillips has until 24 September 2026 (30 days from the FMV determination) to exercise its right to acquire the interest at this price, less the relevant default claim, applicable interest, and a discount factor under the Joint Operating Agreement (JOA).
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How RISC arrived at US$19.8 million
RISC Advisory used a sum-of-parts methodology, splitting the valuation into two distinct components.
The first component covers 3D Energi’s 20% interest in the Essington Gas Discovery. RISC calculated an unrisked post-tax NPV10 of US$25.4 million for TDO’s share, using a 10% nominal discount rate. It then applied a 51% Chance of Development (CoD) to risk that figure down to US$13.0 million.
The second component is the remaining exploration value of VIC/P79, covering the Regia and Charlemont clusters. RISC attributed US$6.8 million to TDO’s 20% share of this exploration upside.
Combined, these two components produce a total determined FMV of US$19.8 million for TDO’s 20% participating interest, against a gross VIC/P79 total of US$99.0 million.
| Valuation Component | Gross VIC/P79 | TDO 20% Interest | Basis / Notes |
|---|---|---|---|
| Essington – unrisked post-tax NPV10 | US$127.0m | US$25.4m | 10% nominal discount rate applied |
| Essington – risked post-tax NPV10 (51% CoD) | US$65.0m | US$13.0m | 51% Chance of Development applied to unrisked NPV |
| Exploration value – Regia & Charlemont clusters | US$34.0m | US$6.8m | Remaining exploration value of VIC/P79 |
| Total FMV | US$99.0m | US$19.8m | Sum-of-parts total; final determined FMV |
What is an NPV10 and why does it matter here?
Two technical concepts sit at the heart of this valuation, and understanding them tells you exactly where the dispute lies.
NPV10 (Net Present Value at a 10% discount rate) estimates the present-day value of future cash flows from an asset, discounted to account for the risk that money received years from now is worth less than money in hand today. The higher the discount rate applied, the lower the resulting value.
Chance of Development (CoD) is a probability factor applied to reflect the risk that a discovered resource may never actually reach production. A 51% CoD means RISC assessed just over a coin-flip probability that the Essington Gas Discovery proceeds to development.
The two-step process RISC followed works like this:
- Calculate the unrisked post-tax NPV10 — what the asset would be worth if development were certain (TDO’s share: US$25.4 million).
- Apply the CoD to risk that figure down — multiply by 51% to arrive at the risked NPV10 (TDO’s share: US$13.0 million).
This is precisely where TDO’s Board takes issue. The Board considers that the resulting US$19.8 million FMV materially undervalues its 20% participating interest in VIC/P79.
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What happens next — and what TDO is contesting
Following receipt of RISC’s determination, if the buy-out notice was validly issued, ConocoPhillips has until 24 September 2026 (30 days from the FMV determination) to exercise its right under the JOA to acquire 3D Energi’s 20% participating interest at the determined FMV of US$19.8 million, less the amount of the relevant default claim together with any applicable interest and an applicable discount factor under the JOA.
As at 1 September 2026 (the date of the announcement), ConocoPhillips had not exercised any right to acquire the interest following the FMV determination.
TDO’s legal position remains active. The company continues to raise concerns regarding the validity of the default notices and the subsequent buy-out notice issued by ConocoPhillips, and has expressly reserved all of its rights in relation to those matters. If the buy-out notice is determined to have been validly issued, RISC’s FMV determination would be final and binding on both parties under the JOA, absent fraud or manifest error.
The Board of 3D Energi considers that the US$19.8 million FMV materially undervalues 3D Energi’s 20% interest in VIC/P79.
For context, the VIC/P79 joint venture ownership structure is as follows:
- 3D Energi Limited: 20%
- ConocoPhillips Australia (Operator): 51%
- Korea National Oil Company: 29%
3D Energi has committed to keeping the market informed in accordance with its continuous disclosure obligations as this process evolves.
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