Melbana strikes deal with Santos, Total to survey our biggest, undrilled oil prospect
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Oil explorer Melbana Energy has struck a deal with energy giants Santos and Total to survey a potential multi-billion-barrel oil prospect off northern Australia.
Melbana shares jumped 14 per cent to 1.6c after the announcement.
Melbana’s Beehive prospect, which sits in the Joseph Bonaparte Gulf off the coast of the Northern Territory, is one of the biggest, undrilled hydrocarbon structures in Australia.
Hydrocarbons are made up of hydrogen and carbon atoms — the main ingredients of petroleum and natural gas.
Melbana’s (ASX:MAY) site, which covers about 4000 sq km of the Petrel Sub-basin, is similar to the Tengiz oil field in north-western Kazakhstan beside the Caspian Sea.
Tengiz is one of the biggest oil discoveries in recent years and is estimated at 25 billion barrels.
Under the deal, Melbana (ASX: MAY) Total and Santos will fully fund a 3D seismic survey of Melbana’s WA-488-P site, which contains the Beehive prospect.
In return, Total and Santos will earn options to acquire 80 per cent of the project. If the option is exercised, Total and/or Santos will fund all costs until completion of the first well.
The partners hope the survey will uncover a preferred location for a Beehive-1 exploration well.
‘Significant oil and gas prospect’
“Our longstanding belief that Beehive is one of the most significant oil and gas prospects in Australia,” said Melbana’s chief executive.
“This transaction provides a pathway for Melbana to be fully carried for a 20 per cent participating interest in the drilling of Beehive.”
“Melbana welcomes Total and Santos as partners and we are excited by the opportunity to unlock the huge potential of the Beehive prospect for our shareholders.
“We will now proceed to work with our partners to ensure the 3D seismic survey gets underway as soon as possible.”
‘Opportunity for Australia’
The Petrel Sub-basin area has been identified historically as a target by many companies, but Melbana put the story together in 2012 after identifying the significance of the Ungani oil discovery in onshore Canning Basin in 2011.
Melbana’s chief geologist, Errol Johnstone, said Beehive was “an opportunity for Australia to develop a brand new play”.
“It’s a ground-breaking discovery within the older rocks within Australia, that’s actually very analogous to the Caspian Sea, Mr Johnstone told Stockhead.
“The rim of the Caspian has had huge discoveries. We can actually drill a deep target here in Australian waters and break open a brand new play the industry can chase for the next 20 years. ”
A commercial discovery could be quickly delivered to market, said Santos’s Executive Vice President Exploration & Appraisal, Bill Ovenden.
“The Beehive prospect is a large, undrilled structure with great hydrocarbon-bearing potential and immediately adjacent to the Blacktip facilities and within reach of Ichthys infrastructure.”