Santos farms in to Beehive prospect; Total declines

Santos Ltd., Adelaide, has exercised its option to farm in to a 40% interest in Melbourne-based Melbana Energy Ltd.’s permit WA-488-P in the Western Australian sector of the offshore Bonaparte basin, which contains the prospective Beehive prospect.

French company Total E&P Australia Exploration Pty. Ltd. however has declined to exercise a similar option in the permit. Total’s option now expires with immediate effect.

Based on the terms of the option agreement, Santos’ option has now been modified such that it may now acquire an 80% interest in the permit in return for funding 100% of the costs for an exploration well in the permit area, which is likely to be Beehive-1.

Santos now has until Dec. 4 to exercise this modified option. If Santos chooses not to go for this new version, it will not acquire any interest at all in the permit, which will revert to Melbana’s current 100%.

Beehive prospect has been independently assessed as having an estimated prospective resource of 388 million boe. It is a shallow-water prospect close to existing infrastructure. Santos and Total have recently run a 3D seismic survey in the area.

Melbana Chairman Andrew Purcell expressed regret not to have the opportunity to work with Total, but he looked forward to continuing to work closely with Santos and any partner that Santos may wish to introduce to replace Total.