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Melbana Announces Acceleration of WA-488-P Beehive Well Planning

Source: www.gulfoilandgas.com 12/3/2018, Location: Not categorized

Melbana Energy has reached an agreement with Total and Santos to modify the current commercial agreement between the parties to accelerate the work required to ensure readiness for potential drilling of the Beehive-1 exploration well in 3Q 2020.

Total and Santos have an option (exercisable together or individually) to acquire a direct 80% 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.

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, Total and Santos have also agreed to lock in a firm backstop date for acceptance of the seismic data to trigger the start of the 6 month window for exercise of their option. Currently, data is expected to be received early in 2019.

Potentially the largest undrilled hydrocarbon prospect in Australia, the Beehive Prospect was recently assessed by Independent Expert McDaniel & Associates.

Melbana Energy’s CEO, Robert Zammit, said: 'We welcome these changes to the commercial arrangement that accelerates drilling planning at the expense of further seismic processing. 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. If Total and/or Santos exercises their option to drill, Melbana retains a 20% interest in WA-488-P and is fully carried until the completion of drilling of the first well in the permit which will test the largest undrilled hydrocarbon prospect in Australia, with a best estimate prospective resource of 388 million barrels of oil equivalent as assessed by independent expert McDaniel & Associates.'

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