MELBANA Energy Limited has announced that Santos Ltd has failed to meet a key farm-in deadline for the high-profile Beehive prospect off the northern coast of Australia and it is now in discussions with other potential partners.

The company said that it had been advised by Santos that it had not concluded a farm out of an interest in the WA-488-P permit containing the Beehive prospect by its deadline of March 4, 2020.

Subsequently, Santos’ option to acquire an 80% interest in the Permit, in return for agreeing to fund the drilling of one exploration well in the Permit, has therefore expired. Santos therefore no longer has any right to acquire an interest in the Permit.

As a result, Melbana now has a 100% unencumbered 100% interest in the Permit, which is located in the Petrel Sub-basin of the Bonaparte Gulf.

In a statement approved by chairman, Andrew Purcell, the company said it is in discussions with potential partners to join it in drilling an exploration well in the Beehive prospect – a process that is greatly assisted by the high-quality 3D seismic survey undertaken in 2018 by Total and Santos and the significant preparatory work that has been completed to date.

“Should Melbana be successful in attracting new partners to assist it with the drilling of an exploration well in the Beehive prospect, it intends to seek an extension to its obligation to drill an exploration well by December of this year to align with expected rig availability in 2021,” the company told the ASX.

Melbana said it has also commenced work on reassessing its volumetric assessment of the prospective resource in the Beehive prospect and its interpretation of other possible plays in the Permit area using the newly acquired 3D seismic survey.

A previous Independent Expert report by McDaniel & Associates Consultants estimated Beehive to have a prospective resource of 388 million barrels of oil equivalent (best estimate).