- Santos will take up a Farm-In option at Melbana Energy’s Beehive prospect in the Bonaparte Basin in northern Australia
- If certain conditions are met, Melbana will grant Santos an 80 per cent participating interest in the permit containing the Beehive prospect
- In return, the Australian natural gas company will foot all costs for the Beehive-1 Well
- Santos and French oil giant Total complete a fully funded a 3D seismic survey at the prospect in 2018 which opened the door for a Farm-In option
- Shares in Melbana are trading steady for 1 cents apiece
- Meanwhile Santos is up 4.16 per cent, with shares trading for $8.14 each
Santos (STO) will conditionally take up a Farm-In option at Melbana Energy’s (MAY) Beehive prospect in the Bonaparte Basin.
Under the Farm-In, Melbana will grant Santos an 80 per cent interest in the permit containing the offshore Beehive prospect southwest of Darwin.
In return, Santos will foot all costs for the Beehive-1 Well at one of the largest undrilled hydrocarbon prospects in Australia.
The Farm-In is not, however, effective until two key conditions are met. Firstly, Santos must complete a farm-down of part of its participating interest to a third party by March 4, 2020.
Subsequently, the parties must acquire an extension to the permit year to align with when a rig is available in 2021. The current permit year ends in December, 2020.
Melbana Chairman Andrew Purcell, says the company is happy with the advancement towards drilling at the prospect.
“We’re pleased to continue to work cooperatively with Santos given the commitment they’ve shown to Beehive – a prospect with 388 million barrels of oil equivalent of prospective resource (best estimate) and potentially 1.6 billion barrels of oil equivalent of prospective resource (high estimate).” he said.
The Farm-In option was available to Santos after it conducted a fully funded 3D seismic survey at the prospect in 2018, along with French oil giant Total.
Shares in Melbana are trading steady for 1 cents apiece at 11:09 am. Meanwhile Santos is up 4.16 per cent, with shares trading for $8.14 each at 1:31 pm AEDT.