Melbana Energy divests two offshore Australian exploration permits
MELBOURNE -- Melbana Energy Limited has provided the following update on its non-core offshore Australian Exploration Permits AC/P50 and AC/P51 (Permits) (Melbana 55%1 and operator).
Melbana has executed binding agreements with Rouge Rock Pty Ltd (Rouge Rock) for the sale of its wholly owned subsidiary that holds the Permits, Vulcan Exploration Pty Ltd. Rouge Rock is a current joint venture participant in the Permits holding a 45% participating interest.
The forward work program for the current permit year includes geological and geophysical studies including interpretation and mapping of reprocessed inversion seismic data with an estimated aggregate cost of A$500,000 and the next permit year commencing May 19, 2019, includes an exploration well in each permit.
The agreements provide for Melbana retaining exposure to the upside outcomes of a subsequent sale or farmout of either of the Permits by Rouge Rock. The agreements are structured such that if Rouge Rock enters into an arrangement in future for cash, Melbana earns 10% of the cash benefit received by Rouge Rock.
If Rouge Rock enters into an arrangement in future that provides for a full or partial carry on a well, Melbana has the right to back-in for a 5% interest after the well is drilled, effectively providing a carried interest during the drilling process and avoiding costs associated with the drilling process.
