Australian oil firm Santos has exercised an option to acquire a 40% stake in WA-488-P, the permit containing the Beehive prospect offshore Western Australia from Melbana Energy.

France’s Total, which also had an option to farm-in, has notified Melbana Energy its decision not to proceed with the stake acquisition in the permit.

As a result of Total’s decision and as per the terms of the option agreement, Santos’ option has been modified.

Santos will now have an option to acquire 80% interest in the permit

Santos will now have an option to acquire 80% interest in the permit by funding 100% of the costs for Beehive-1 exploration well in the Permit area.

If the modified option is not exercised by 04 December 2019, Santos will not acquire any stake in the Permit, and as a result, Melbana will retain 100% interest in the Permit.

Assessment by Independent Expert McDaniel & Associates reveals that the Beehive prospect contains a best estimate prospective resource of 388 million barrels of oil equivalent, Melbana noted.

Melbana Energy chairman Andrew Purcell said: “Santos’ recently announced decision to acquire the northern Australian assets of ConocoPhillips, consistent with its aim to be a leading regional LNG supplier, make it a particularly exciting time for the energy sector in northern Australia.

“There is a great deal of interest from industry in these developments and we are confident that our Beehive prospect has a role to play there given other recent regional successes, its shallow water position close to existing infrastructure and the increased confidence in the prospect resulting from the newly processed 3D seismic survey acquired by Santos and TOTAL.

“We look forward to continuing to work closely with Santos and are confident that other well credentialed parties will have an interest in the Beehive prospect should the opportunity become available for them to participate in the drilling of this well.”

In September 2019, Santos, in a joint venture with British oil major BP, was awarded new acreage which lies adjacent to its existing oil discovery, Dorado, offshore Northern Carnarvon Basin in WA.

The 50:50 joint venture will undertake exploration activities at the new permit, WA-541-P in the Bedout Sub-basin.