- Melbana Energy has agreed to extend the expiry date of a farm-in option period for its Beehive prospect, at the request of potential partners Santos and Total S.A
- Santos and Total had six months to decide if they wanted to earn a potential 40 per cent interest in the WA-488-P licence area, which expired yesterday
- The option extension is not expected to have an impact on the potential to drill a major well in the area by the end of next year if the companies agree to exercise their options
Melbana Energy has agreed to extend the expiry date of a farm-in option period for its Beehive prospect, at the request of potential partners Santos and Total S.A.
After Melbana, Total, and ASX 200-listed Santos received and accepted final processed data from the Beehive 3D Seismic Survey in early April 2019, Santos and Total officially entered a six-month farm-in option period for the project.
Essentially, this meant that Santos and Total had six months to decide if they wanted to earn a potential 40 per cent interest in the WA-488-P licence area, which is home to the Beehive prospect and currently wholly owned by Melbana. Those six months expired yesterday, on October 2, 2019.
Beehive is predicted to hold a best estimate prospective resource of 388 million barrels of oil equivalent.
Santos and Total would earn their interest, or part thereof, by jointly funding the cost of the Beehive-1 exploration well should they decide to exercise this option.
At the time, Melbana CEO Robert Zammit described the potential farm-in as a “milestone” for the company.
Today, Melbana has agreed to give the two companies until November 4 to exercise their option. The company said Santos and Total have completed their own technical assessment of the beehive prospect, but asked for more time to make their decision in order to seek necessary internal approvals.
Melbana told shareholders the extension of the option period is not expected to impact the ability of the three companies involved to drill the Beehive-1 well before the end of next year, should Santos and Total decide to go forward with the farm-in.
Shareholders are now forced to wait another month to see if Melbana will be able to brush shoulders with a big cap like Santos.
Shares in Melabana, however, have remained steady today, continuing to trade for 0.9 cents each in a $16.9 million market cap.
Santos is seeing a 4.08 per cent drop in share price at market close. Santos shares trade in a $15.19 billion market cap.