Total and Australian company Santos have signed a seismic funding and farm-in option agreement with Melbana Energy for the WA-488-P licence, which contains the Beehive prospect in offshore Australia.

Under the agreement, Total and Santos will fund 100% of the cost of a 3D seismic survey over the Beehive prospect in exchange for an option to acquire a direct 80% participating interest in the permit.

If Total or Santos choose to exercise the option, they will fully fund the costs of all activities until completion of the WA-488-P permit’s first well.

Melbana Energy CEO and managing director Peter Stickland said: “Our longstanding belief that Beehive is one of the most significant oil and gas prospects in Australia, coupled with our continuing efforts to use the technical resources available to us to better define this prospect have been validated by the signing of this agreement with two world-class companies in Total and Santos.

“This transaction provides a pathway for Melbana to be fully carried for a 20% participating interest in the drilling of Beehive.”

“This transaction provides a pathway for Melbana to be fully carried for a 20% participating interest in the drilling of Beehive, with a firm commitment by Total and Santos to fund a 3D seismic survey, and then pre-agreed farm-in terms for the drilling of a well in WA-488-P if either Total or Santos elect to proceed after the seismic data is acquired.”

If a commercial discovery is made, Melbana will repay carried funding from its share of cash-flow from the Beehive field.

The acquisition of a new 3D seismic survey over Beehive will allow the company to further de-risk the prospect.

In addition, the acquisition will facilitate consideration of a preferred location for the Beehive-1 exploration well.

Melbana noted that planning for a 3D seismic survey has already started, with the acquisition expected to begin in mid-2018.