Australian independent oil and gas company, Melbana Energy, reached an agreement with Total and Santos to modify the current commercial agreement to move quicker towards drilling the Beehive-1 exploration well in the third quarter of 2020.
Total and Santos have an option they can exercise together or individually to acquire a direct 80 percent participating interest in the permit in return for continuing to fully fund the costs of all activities until completion of the first well in the WA-488-P permit, Melbana said in its statement.
The agreement provides for Total and Santos to undertake preliminary well planning activities between February and July 2019 as required to ensure the viability of spudding the Beehive-1 exploration well during the third quarter of 2020, in case of option exercise, including drafting of an environment plan, well concept identification and commencement of rig selection activity.
The requirement of Total and Santos to undertake additional advanced seismic processing has been removed as it was regarded as no longer necessary to prepare for drilling and would have been on the critical path, which would have delayed readiness for drilling, Melbana said.
Commenting on the agreement, Melbana Energy’s CEO, Robert Zammit said, “The changes were initiated by Total and Santos and are an illustration of their desire to progress evaluation of Beehive on a timely basis and ensure readiness to drill the Beehive-1 well in 3Q 2020 should they exercise their option to do so.”
He further added that if the pair exercises their option, Melbana will retain a 20 percent interest in WA-488-P with a best estimate prospective resource of 388 million barrels of oil equivalent according to McDaniel & Associates assessment.