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  • Energy company Santos is buying 40 per cent of Melbana’s oil prospect off the coast of the Northern Territory
  • At the same time, fellow energy explorer TOTAL E&P turned down its option to purchase a 40 per cent interest in the project
  • Due to TOTAL E&P’s decline, Santos now has the chance to increase its holding to 80 per cent if it agrees to fully fund the Beehive-1 well
  • Following the shift in ownership at the Beehive prospect, Melbana’s share price fell nine per cent and is currently trading for one cent each
  • ASX 200-lister Santos saw its share price close flat after recording lots of movement throughout the day. Shares in Santos are currently worth $8.15 each

ASX 200-lister Santos is taking on a 40 per cent interest in energy producer Melbana’s Beehive oil prospect, located off the coast of the Northern Territory.

The “giant” Beehive prospect is located 40 metres deep in the Bonaparte Gulf and sits between established gas and oil projects.

“There is a great deal of interest from industry in these developments and we are confident that our Beehive prospect has a role to play there given other recent regional success, company Chairman Andrew Purcell said.

However, fellow energy explorer TOTAL E&P Australia chose not to purchase a 40 per cent interest in the prospect. Meaning its option to buy in expires immediately.

Due to TOTAL E&P’s withdraw, Santos has now presented the opportunity to take hold of 80 per cent of Beehive. The energy powerhouse has until December 4 to decide and will be required to fully fund the Beehive-1 well in order to increase its holding.

If Santos doesn’t take up to option, Melbana will retain its 100 per cent holding of the permit.

In the company’s release to the market, Andrew detailed the prospects likely success based on its shallow water position and proximity to existing infrastructure.

Additionally, the prospect underwent a newly processed 3D seismic survey recently which has also boosted its likely potential.

According to Melbana, it is expected other parties will come on board, taking up an interest in Beehive if opportunities for drill participation become available.

Following news of Santos’ interest and TOTAL E&P’s decline to assume interest in the Beehive prospect, Melbana’s share price has taken a nine per cent hit. Shares in the company are currently trading for one cent each.

Santos’ share price closed flat today, following plenty of movement throughout the day. Shares are currently worth $8.15 apiece.

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