Melbana Energy (ASX: MAY) has released a corporate update on the Company’s drilling exploration of its Block 9 basin in Cuba.
The Company is one of the few companies which have been operating long term in Cuba. It is the only corporation listed on the Australian stock exchange with a footprint in the expanding Cuban hydrocarbon sector.
In 2016, Melbana reported a significant find in Block 9. Since then the Company has continued working on a detailed assessment of the Block. A number of previously drilled wells in the Block and on Cuba’s northern shores have recovered light oil, including the Guadal-1, the Marti-5, the Motembo Field and the Bolanos-1. These wells are in close proximity.
Melbana’s exploration and drilling strategy for Block 9 in Cuba is consistent with Union CubaPetroleo (CUPET) strategy to speed up oil exploration in Cuba. Cuba currently produces around 45,000 barrels of oil and 3 million cubic meters (approximately 100 million standard cubic feet) of gas per day with a competitive production cost of $7 US per barrel.
Geological surveys have been completed for the Block 9 basin and Melbana is targeting mid-2018 to begin drilling.
Melbana is planning to drill up to two wells in Block 9. The Company is in the preparatory stage for the drilling work. Local contractors have been hired to work with Melbana employees for the completion of field survey work, filing environmental applications and the engineering design of the facilities.
The Company has officially advised CUPET of its commitment to the second exploration sub-period of Block 9.
Melbana’s Block 9 PSC portfolio contains an estimated 637 million barrels of prospective recoverable oil reserves.
The drilling campaign is predicted to cost in the range of $30 million. A recent campaign to raise $4.8 million to fund drilling operations fell short of this target. Petro Australis Limited stepped in to reclaim its conditional back-in right for 40% of Melbana’s Block 9, reducing some capital obligations for the planned future drilling by the Company.
Managing Director and Chief Executive Officer Peter Stickland said in a statement, “Melbana is pleased to provide formal notification to the Cuban regulator of our ongoing commitment to Block 9 based on its world-class exploration potential and we are well placed having already commenced preparatory engineering, permitting, and procurement activities to support the work program and our ambition to drill up to two exploration wells in Block 9 commencing mid 2018,”
Of note: Block 9, east of Varadero, suffered no Hurricane Irma damage.