MEO Australia is eying drilling on its Beehive oil prospect after an international exploration company executed an option which will allow it to farm-in to any of MEO Australia's WA-488-P, AC/P50 and AC/P51 permits off northwestern Australia.
The move could see the farminee firm take 30% interest in WA-488-P, in the Petrel sub-basin, containing the significant Beehive prospect, and fund 30% of future spending on the permit. It could also take an additional 10%, which would cover the costs of a 3D seismic survey over the Beehive prospect, and a further 40% to cover drilling costs on the proposed Beehive-1 well, leaving MEO with 20% participating interest.
MEO gas made analogies with Beehive, which contains two prospects, in the Lower Carboniferous and Ordovician, to the Ungani oil discovery in the Canning basin, the giant Tengiz field in the North Caspian basin and the Buried Hill oil fields in the Tarim basin of China.
The company says Beehive could contain up to 598 MMstb P50 prospective recoverable resources in the Carboniferous and 328 MMstb in the Ordovician. The company says the two prospects could be tested with one well and is "ready to drill."
On AC/P51, in the Vulcan sub-basin, containing the Ramble On prospect, or AC/P50, the farminee could acquire 30% interest, funding 30% of spending, on condition the permit renewal process starts in 1Q.
MEO’s managing director and & CEO Peter Stickland says: “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 utilized, 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."
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