Melbana Energy Limited has completed the sale of its exploration permit WA-488-P, containing the Beehive prospect to EOG Australia. Melbana has received a payment of US$7.5 million from EOG Australia in consideration.

The terms of the sale agreement provide for EOG Australia to make Contingent Additional Payments to Melbana totalling US$5 million, subject to EOG Australia making certain future elections in regard to the WA-488-P permit area. In addition, Melbana is entitled to payments of US$10 million per 25 million barrels of oil equivalent (boe) that may be sold and delivered from within the permit area in the future.

The WA-488-P permit area contains the Beehive Prospect, estimated by independent reserves expert to contain 388 million boe on a best estimate basis and as much as 1.6 billion boe. Melbana revised these estimates to 416 million boe (best estimate) and 1.4 million boe (upper estimate) following its assessment of the 3D seismic data acquired across the prospect in 2018.

Melbana retains a 100 per cent interest in the adjacent permit areas WA-544-P and NT-P87, which contain the undeveloped oil discoveries Turtle and Barnett. Melbana is currently conducting geoscientific studies over these permit areas.

Melbana Energy’s Executive Chairman, Andrew Purcell, commented: “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.

“This play type, untested in Australia, 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.”

The giant Beehive prospect, located in the Bonaparte Gulf and in an approximately 40 metre water depth, is one of the largest undrilled hydrocarbon prospects in Australia.