It is the first foray into Australia for the Houston-headquartered oil giant and Fortune 500 company and the second announcement this week by a US company moving into offshore exploration territory here. Earlier this week, Arizona's Liberty Oil
took two offshore Victoria permits it bid for in a prior acreage round.
EOG currently has a share price of around US$68 and reported a first quarter net loss of $367 million the prior week based on derivatives contracts, although in the past month it has led industry peers with growth of 4.5% over an average of 2.4% according to US financial reports.
EOG de-merged from Enron in 1999.
The US company also takes the 700sq.km of 3D seismic acquired by Total and Santos in 2019 and a library of 2D seismic.
Beehive has an independent best estimate prospective resource of 416MMboe.
Melbana keeps the adjacent permits WA-544-P and NT/P87 which it only acquired late last year. They hold the undeveloped Turtle and Barnett oil discoveries.
It had been searching for a farminee to pay costs to drill the huge carbonate structure after Santos and Total earlier pulled out.
France's Total acquired the data in 2019, at no cost to Melbana, as part of a deal that gave it an option to farm in for a 40% and a free carry of the Melbourne-based junior. Santos had an option for another 40%.
Total declined, despite paying the seismic costs, leaving Santos to briefly take 80% before failing to find a partner to farm down to, then handing the lot back to Melbana.
The offshore titles regulator approved an extension to its Beehive work program last year once already and it was still telling the market last year it planned to drill its required wildcat late this year.
"The sale of WA-488-P to an experienced and well-resourced party such as EOG delivers upfront cash and an interest in any future production without exposure to the cost of appraising and developing a discovery," it said.
Conditions precedent include regulatory approval for title transfer and approval to suspend and extend the remaining permit obligations so EOG has time to drill the required exploration well as part of the permit's work program.
A well is due to be drilled this year; EOG will drill one next year if the titles administrator approves the extension.
Melbana receives $2.5 million when the company enters the final year of the exploration permit and another $2.5 million when it is awarded a production license.
Melbana shares are worth 2.2c today after an initial morning rally to 2.4c. It has a market cap of $50.97 million.