Australia’s Santos will partially fund and operate a 3D seismic survey over what it described as the exciting, undrilled Beehive prospect, the Bonaparte Basin offshore Western Australia. The other part of the funding will come from the French oil major Total.
This will earn Santos and Total an option to farm into the WA-488-P license and acquire a direct 80 percent interest in the block which is currently fully-owned by Melbourne-based Melbana Energy, formerly known as MEO Australia.
If the option is exercised, Total and/or Santos will fully fund the costs of all activities until completion of the first well in the WA-488-P permit. 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 WA-488-P.
The offshore block is located adjacent to Blacktip production infrastructure and within reach of Ichthys infrastructure, providing good potential pathways for early commercialisation of any discovery, Santos said.
Santos Executive Vice President Exploration & Appraisal Bill Ovenden said the transaction puts the company in a good position to boost its strategic acreage position in offshore Northern Australia.
“The Beehive prospect is a large undrilled structure with great hydrocarbon-bearing potential and, being immediately adjacent to the Blacktip facilities and within reach of Ichthys infrastructure, a commercial discovery could be quickly delivered to market,” he said.
“This option adds to our diverse portfolio of core production, appraisal and exploration assets in Northern Australia, including our foundation interest in Darwin LNG and the Barossa field which is the leading candidate to backfill Darwin LNG as Bayu-Undan comes off plateau in the next few years.”
According to Melbana, planning for the 3D seismic survey has already started, with acquisition expected to begin in mid-2018.
Most significant prospect in Australia
Melbana’s CEO and MD Peter Stickland, said:”Our longstanding belief that Beehive is one of the most significant oil and gas prospects in Australia, coupled with our continuing efforts to use the technical resources available to us to better define this prospect have been validated by the signing of this agreement with two world class companies in Total and Santos.
“This transaction provides a pathway for Melbana to be fully carried for a 20% 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 farmin 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.
“Melbana welcomes Total and Santos as partners and we are excited by the opportunity to unlock the huge potential of the Beehive prospect for our shareholders. We will now proceed to work with our partners to ensure the 3D seismic survey gets underway as soon as possible,” Stickland said.
Offshore Energy Today Staff