Update on MEO Australia Limited name change to Melbana Energy and Extension of Exploration Period
Melbana Energy Limited, listed on the Australian ASX (“MAY”), and formerly known as MEO Australia Limited, recently announced its corporate name change and rebranding. Melbana Energy is an independent Australian oil and gas company involved in oil exploration in Cuba.
Chief Executive Officer and Managing Director Peter Stickland said of the name change from MEO to Melbana, “The MEO Board believes the relaunching of MEO as Melbana Energy Limited will better reflect the company’s focus on its high potential Cuba Block 9 Production Sharing Contract and other Cuban business development activities. We look forward to continuing all of the company’s exploration activities under the Melbana Energy banner in the future.”
Melbana also received an extension of its exploration period within an area that covers 2,380km2 east of Havana. Although much of this area is onshore, Melbana has been awarded both onshore and shallow water operating rights. Block 9 PSC is close to oil fields with operational oil wells including Motembo, Majaguillar, and San Antonio oil fields. It is worth noting that Motembo Field is the location where oil was first discovered in Cuba. As such, the area is a proven oil field that potentially holds billions of barrels of oil. According to Melbana Energy, this is the first extension of its exploration period and it is valid for 18 months commencing from September 2015. Nevertheless, the entire exploration period still runs until March 2024.
This extension gives Melbana ample time to undertake extensive exploration activities including reevaluating 2D seismic data or undertaking more detailed field tests. Currently, Melbana enjoys 100% interest in Block 9 although it is subject to a conditional 40% back-in option that is held by an energy company called Petro Australis Limited.
The back-in option expires in September 2017 which means Petro Australis could exercise it before the validity period lapses. With no competitors to worry about and an exploration period extension, Melbana is uniquely positioned to establish itself as a key energy player in Cuba. This notwithstanding, the thawing of diplomatic and economic relations between Cuba and the US means Melbana will enjoy the ripple effects of a growing economy, ease of accessing expertise, as well as ease of communication and transport.
After detailed assessment of exploration data, Melbana reckons that Block 9 has 8.183 billion barrels of oil-in-place. This is in addition to 395 million barrels of potentially high quality light oil located in the “Lower Sheet Play”, which has spurred Melbana to ramp up its focus on promising shallow plays that could boost its estimates of the highly lucrative light oil. These aspects mean Melbana is well poised to become a major energy player in the near future.Thanks to these overtures and promising exploration results, Melbana’s CEO Peter Stickland says that the company is focused on early drilling in Block 9. In fact, a number of oil wells have been drilled in promising areas that were identified during exploration forays.
News of Melbana Energy contract extension will be certainly exciting to investors because it amounts to a vote of confidence by the Cuban government on the Australian energy company. Melbana’s CEO Peter Stickland reckons that the adjustment of its exploration sub-periods is a reward for its extensive data compilation and aggregation efforts.