- Melbana Energy (MAY) has completed the sale of the WA-488-P exploration permit to EOG Resources Australia
- EOG has paid Melbana US$7.5 million (A$10.4 million) but may also need to make additional payments totalling US$5 million (A$6.9 million) subject to certain conditions
- Additionally, Melbana is entitled to US$10 million (A$13.8 million) per 25 million barrels of oil equivalent that may be sold and delivered from within the WA-488-P permit
- Melbana will retain a 100 per cent interest in the adjacent WA-544-P and NT-P87 permits which contain undeveloped oil discoveries
- Company shares are trading flat at 2.3 cents
Melbana Energy (MAY) has completed the sale of the WA-488-P exploration permit to EOG Resources Australia.
Melbana’s subsidiary, Finniss Offshore Exploration, entered a sale and purchase deal with EOG Australia in April this year regarding the sale of WA-488-P, which is located in the Joseph Bonaparte Gulf which borders WA and the Northern Territory.
EOG Australia has paid Melbana the US$7.5 million (A$10.4 million) consideration. As part of the agreement, EOG will need to make additional payments of US$5 million (A$6.9 million) subject to it making certain future elections regarding the permit area.
Additionally, Melbana is entitled to US$10 million (A$13.8 million) per 25 million barrels of oil equivalent that may be sold and delivered from within the WA-488-P permit in the future.
The WA-488-P permit area contains the Beehive prospect, which is estimated to contain 416 million barrels of oil equivalent on a best estimate basis and 1.4 million barrels of oil equivalent on an upper estimate basis following Melbana’s assessment of 3D seismic data acquired in 2018.
“It is tremendously exciting for all of us here at Melbana (and, as we have learned, for many other observers) that the Beehive prospect identified and championed by our geoscience team is finally going to be tested,” Executive Chairman Andrew Purcell said.
“This play type has been responsible for some of the world’s great hydrocarbon discoveries so we wish EOG Australia every success in its preparations for and execution of the exploration well they are planning to drill.”
Following this sale, Melbana will retain a 100 per cent interest in the adjacent permit areas of WA-544-P and NT-P87 which contain undeveloped oil discoveries.
MAY shares were trading flat at 2.3 cents at 1:03 pm AEDT.