MEO Australia has signed an option agreement with an unnamed international exploration firm to farm out stakes in any of its three permits.

The deal includes WA-488-P, AC/P50 and AC/P51 permits, offshore Australia.

The agreement will see the firm take 30% interest in WA-488-P, which contains the Beehive prospect, and fund 30% of future spending on the permit.

The firm may also take a further 10% stake, which would cover the costs of a 3D seismic survey on the Beehive prospect.

"MEO’s strategy is to farm down its northern Australia permits in order to participate in the drilling of quality prospects at minimal cost."

It also includes an additional 40% interest to cover drilling costs on the proposed Beehive-1 well, leaving MEO with 20% participating interest.

On AC/P51, containing the Ramble On prospect, or AC/P50, the farminee could acquire 30% interest, funding 30% of investment, on condition that the permit renewal process starts in the first quarter of 2015.

The farminee is presently performing the technical assessment of AC/P50 and AC/P51.

MEO MD and & CEO Peter Stickland said: "MEO’s strategy is to farm down its northern Australia permits in order to participate in the drilling of quality prospects at minimal cost to MEO.

"While the agreement to farmout 30% of WA-488-P is conditional, it is an important first step. If the farmout is completed and the included provisions are utilised, MEO will have achieved its objective of a fully carry through a Beehive-1 well for its residual 20% participating interest.

"Separately MEO continues to engage with a number of other parties who are evaluating WA-488-P and additional parties can be accommodated in the Permit by the current agreement."