French oil and gas major Total and Australia’s Santos have executed a seismic funding and farm-in agreement with Melbana Energy at the WA-488-P licence offshore northern Australia.
Melbana’s 100 per cent owned WA-488-P contains the multi-billion barrel Beehive gas prospect. Total and Santos have agreed to fund the cost of a 3D seismic survey over Beehive for the option to acquire an 80 per cent interest in the permit.
If the option is exercised, Total and/or Santos will fund the costs of all activities until completion of the first well at WA-488-P.
Additionally, Melbana will repay carried funding from its share of cash flow from the Beehive field if there is a commercial discovery.
According to Melbana, a new 3D seismic survey over Beehive will provide potential for further de-risking of the prospect and facilitate consideration of a preferred location for the Beehive-1 exploration well.
Melbana chief executive Peter Stickland described Beehive as one of the most significant oil and gas prospects in Australia.
He said Melbana’s continuing efforts to use the technical resources available to better define the prospect had been validated by the signing of the agreement with Total and Santos.
“This transaction provides a pathway for Melbana to be fully carried for a 20 per cent participating interest in the drilling of Beehive, with a firm commitment by Total and Santos to fund a 3D seismic survey, and then pre-agreed farm-in terms for the drilling of a well in WA-488-P if either Total or Santos elect to proceed after the seismic data is acquired,” Stickland said.
Beehive is close to the Ichthys project and Blacktip field. Melbana believes Beehive is potentially the largest undrilled hydrocarbon prospect in Australia.