Oil and gas exploration company Melbana Energy has reached an agreement with Total and Santos to accelerate work required to ensure readiness for potential drilling of the Beehive-1 in 3Q 2020.
Total and Santos have an option to acquire an 80 percent participating interest in the permit in return for continuing to fully fund the costs of all activities until completion of the first well in the WA-488-P permit offshore Australia.
Melbana said on Monday that, under the agreement, Total and Santos would complete preliminary well planning activities between February and July 2019.
This would ensure the viability of spudding Beehive-1 during the third quarter of 2020 in case of the option exercise, including drafting of an environmental plan, well concept identification, and the beginning of rig selection activity.
The company added that Total and Santos were no longer required to undertake additional advanced seismic processing. Seismic was no longer necessary to prepare for drilling and would delay readiness for drilling.
The three companies also agreed to lock in a firm backstop date for acceptance of seismic data to trigger the start of the six-month window for exercising the option. At the moment, data is expected to be received early in 2019.
Melbana Energy’s CEO, Robert Zammit, said: “We welcome these changes to the commercial arrangement that accelerates drilling planning at the expense of further seismic processing. The changes were initiated by Total, and Santos and are an illustration of their desire to progress evaluation of Beehive on a timely basis and ensure readiness to drill the Beehive-1 well in 3Q 2020 should they exercise their option to do so.
“If Total and/or Santos exercises their option to drill, Melbana retains a 20% interest in WA-488-P and is fully carried until the completion of drilling of the first well in the permit which will test the largest undrilled hydrocarbon prospect in Australia, with a best estimate prospective resource of 388 million barrels of oil equivalent […].”
In recent company news, Australian offshore regulator granted Melbana the approval to suspend the deadline for completion of the current WA-488-P permit year work obligations by 15 months.
Beehive is located close to several existing facilities including Ichthys project and Blacktip field and pipeline offering several options for future gas monetization. In the event of a commercial discovery, Melbana will repay carried funding from its share of cash flow from the Beehive field.
Melbana will have no re-payment obligations for such carried funding in the event there is no commercial discovery and development in WA488-P.
According to the company, the Beehive is a Carboniferous age 180 square-kilometer isolated carbonate build up with 400 meters of mapped vertical relief, analogous to the giant Tengiz field in the Caspian Basin.
It is located in 40m water depth suitable for a jack-up rig, within 75 kilometers offshore and developable by either FPSO or pipeline to existing infrastructure. This play type is new and undrilled in the Bonaparte Basin with no wells having been drilled to this depth in the basin.
Polarcus acquired some 600 square kilometers of seismic data over the Beehive prospect. The survey further de-risked the prospect and helped with defining a preferred location for the Beehive-1 exploration well.
A new lead named Egret was identified during the planning of the Beehive 3D Seismic Survey, and the survey area was extended by 100 square kilometers.