Melbana to expand Cuba operations

Monday, December 4, 2017

Australia's Melbana Energy has said it aims to secure and develop more projects in the oil-rich regions of Cuba in addition to block 9, where it is preparing to drill at least two wells in mid-2018.

"As part of this business development initiative, Melbana has identified a number of additional oil and gas opportunities in Cuba which it will seek to mature during 2018."

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The company said Monday in an operations update that it is "receiving significant farm-in interest" for the block, with a data room to open in its Melbourne office.

"Recent discussions with potential contractors has firmed up the likely availability of drilling rigs suitable for the wells Melbana proposes to drill in Cuba, with suitable rigs available both within Cuba and internationally," the company said.

Melbana recently appointed a drilling planning coordinator in Havana, who has rationalized its on-going procurement, allowing for the drilling program. In September it announced it would use US$5.2mn in fresh capital to help bankroll the exploration, having raised US$3.42mn from an entitlement issue, on top of US$1.8mn from a placement.

"Melbana has been encouraged by the ongoing support of the Cuban regulatory authorities as it seeks to proceed with drilling in Block 9 on an accelerated timetable," the company said.

In late October, Petro Australis failed to achieve pre-qualification to enable a timely application to Cuban regulatory authorities for the acquisition of a 40% interest in a block 9 production-sharing contract, meaning that Melbana retained its 100% stake in the block.

The two companies have now reached a commercial settlement and Petro Australis has relinquished all claims to its back-in right to the block in consideration for Melbana paying AUS$50,000 (US$37,975) in cash and issuing 20.8mn Melbana shares to Petro Australis.

As a result of the settlement neither party has further obligations, and it is confirmed that Melbana holds an unencumbered 100% interest in block 9, the company said.