Melbana Energy - carried for the drilling of high impact wells

With four fully funded high impact wells expected to be drilled on two potentially company making projects over the next two years, Melbana Energy is now realising the fruition of a period where it has built up an unrisked Prospective Resource base of 1.1 Bboe.

Three of the wells are to be drilled in the onshore Block 9 Production Sharing Contract (“PSC”) on the northern coast of Cuba, with two of the wells planned for 2019 and one for 2020; the Company is finalising a farm-out agreement with Chinese group Anhui Guangda Mining Investment Co Ltd (“AGMI”), with execution expected in December - this will leave the Company with a free carried interest in all Block 9 activities.

Cuba presents a highly prospective yet under drilled opportunity - Block 9 is along trend from and over similar structures to the major Cuban producing areas including the 11 Bbbl Varadero Oil Field, and areas currently operated by TSX listed Sherritt International, the only other western player in Cuba. Since their Cuban presence commenced in 1992, Sherritt has produced some 216 MMbbl of oil, and in the last 10 years has had an average production of ~23,350 boepd at an operating cost of under C$10/bbl.

In Australia, a 3D seismic survey, funded by Total and Santos, has recently been completed over the Beehive prospect, within the shallow water WA-488-P licence in the Bonaparte Gulf of Western Australia, adjacent to Italian Eni's 150 MMboe Blacktip Gas Field. The seismic survey (for which data processing is expected to be completed by February 2019) is part of an option agreement for Total and Santos (either singularly or jointly) to acquire 80% of the licence, with a decision to execute (or not) expected by August 2019.

Should the option be exercised, Melbana will be carried for the first well drilled into Beehive, a carbonate platform with a diameter of 18km and reportedly the largest undrilled prospect in Australia. Beehive, which is undrilled, has a similar age, size and geometry to the carbonate platform that hosts the giant Tengiz field in Kazakhstan.

In addition to the two main projects, Melbana is currently negotiating commercial terms with the Cuban government oil company CUPET, for a long term incremental oil recovery PSC over the operating Santa Cruz Oil Field, which has the potential to provide relatively near term cash flow. Execution of the agreement is expected in December.

And also in Australia, the Company has long term Federal Government environmental approvals (vaild until 2052, and which would not be able to be obtained for this term if applied for now) to construct and operate offshore gas treatment facilities at Tassie Shoal, located some 300km NW of Darwin. The opportunity here is to treat significant nearby stranded gas assets through LNG and/or methanol trains.

In view of the planned activities, we see significant positive newsflow from Melbana over the short to medium term - to download our initiation report please follow the link below.