Australian offshore regulator has granted Melbana Energy the approval to suspend the deadline for completion of the current WA-488-P permit year work obligations by 12 months.
Melbana Energy said on Friday that its application for a 12-month suspension of the work program conditions in respect of Permit Year 3 was approved by the National Offshore Petroleum Titles Administrator (NOPTA).
According to the company, the suspension for the WA-488-P permit came with a corresponding extension of the permit term.
As a result, Permit Year 3 now ends on 21 December 2021 and the permit term will end on 21 December 2023.
This is not the first time Melbana received a suspension for this particular permit. Namely, NOPTA approved Melbana’s deadline suspension for completion of Permit Year 3 work obligations by 15 months back in September 2018.
Completion of work obligations, which include drilling an exploration well on the permit, was suspended until 21 December 2020.
As for the permit, WA-488-P contains the giant Beehive prospect – a carbonate build-up that has been independently assessed to have a prospective resource of 388 million barrels of oil equivalent (best estimate).
A 3D seismic survey has been completed over the prospect and considerable progress has been made on planning and permitting for an exploration well.
Melbana stated that Beehive has the potential to open a new, possibly very large, play type in Australian waters.
Suitors backed out
It is worth noting that Santos allowed its option to acquire an interest in Melbana’s Beehive permit lapse in March this year.
Santos and Total each had an option to acquire a 40 per cent share in the Beehive permit. However, Total last November decided not to proceed with the acquisition, which gave Santos an option to acquire an 80 per cent interest in return for funding 100 per cent of the costs for an exploration well in the permit area.
Initially, Santos had until early December 2019 to exercise the modified option, which was exercised. However, the deal was conditional on Santos finding a partner to take a share of Santos’ 80 per cent.
Since Santos was not able to conclude a farm-out with a third party, its option to acquire the 80 per cent interest, in return for agreeing to fund the drilling of one exploration well in the permit, expired. Therefore, Santos no longer had any right to acquire an interest in the permit.
Melbana, with its 100 per cent interest in the permit, is in discussions with potential partners to join it in drilling a Beehive exploration well. So far, it has not been able to find any.
At the time, Melbana did reveal its intent to seek an extension to its obligation to drill an exploration well by December of this year to align with expected rig availability in 2021.