EOG Resources Inc., through a new subsidiary, EOG Australia, has ventured into Australia with an agreement to acquire 100% interest in Bonaparte Gulf permit (WA-488-P), which contains the prospective Beehive structure, from a subsidiary of Melbana Energy Ltd., Melbourne.
The sale to EOG enables Melbana to retain exposure to the upside potential of a Beehive discovery. Melbana will receive an up-front payment of $7.5 million upon satisfaction of conditions precedent, plus $5 million in contingent payments. Of the latter amount, $2.5 million will be payable contingent on EOG entering the final year of the exploration permit which includes the commitment for drilling one well. The other $2.5 million is payable contingent on EOG being awarded a production licence over the permit.
Melbana will also receive future payments of $10 million for each 25 MMboe produced, sold, and delivered by EOG from the permit area.
Included is data from a 700-sq km 3D seismic survey as well as extensive 2D seismic coverage. The 3D survey was acquired in 2019 by previous farminees Total and Santos (OGJ Online, Nov. 5, 2019; Mar. 4, 2020).
An independent study has estimated the Beehive prospect, a large carbonate structure, to hold up to 416 MMboe.
In the meantime, Melbana has retained its adjacent permits WA-544-P and NT/P87 which the company acquired in 2020. These two permits, which lie either side of the marine boundary between Western Australia and the Northern Territory, contain the undeveloped Turtle and Barnett oil discoveries.
Conditions precedent for the sale include regulatory approvals, approval to suspend and extend the remaining permit obligations to allow more time to drill the initial exploration well, and approval of the sale by Australia’s Foreign Investment Review Board.
