Melbana Energy (MAY:ASX), the independent oil and gas company from Australia announced this week it has received the first payment from Sonangol, the National Oil Company of Angola, Africa’s second-largest oil producer. Sonangol paid the amount of EUR 425,000, in accordance with the Farm-in Agreement which took place last month.
The payment is an advance against Melbana’s Past Costs for Block 9 PSC of $5 million (AUD), the balance of which becomes payable following Sonangol’s interest in Block 9 PSC being formally recognized by Unión Cuba-Petróleo (CUPET) – the National Oil Company of Cuba. CUPET informally advised this transaction is approved and is working on completing formal documentation.
According to the Farm-in agreement, Sonangol will pay Melbana to cover expenses at Block 9 and fund 85% of the costs related to finishing the drilling already underway at the Alameda and Zapato high-potential sites.
Melbana is in the advanced planning stages of drilling the two onshore wells in Block 9. The company expects to confirm the design details of the drilling program in the near future. The drilling of the first well will then move forward.
Drilling operations are forecast to begin in the fourth quarter of 2020, subject to implications surrounding COVID-19 restrictions to operations.
CUPET has agreed the drilling program will satisfy the minimum work commitments for Block 9 PSC for both the current and subsequent exploration sub-periods. Construction of the well pad for the first well, Alameda-1, is expected to start before the end of next month.
Melbana Energy’s Executive Chairman, Andrew Purcell, said: “We appreciate the commitment Sonangol continues to show towards this drilling program and for making this initial payment ahead of formal completion of the agreements between us. This flexibility demonstrates that we are both keen to test the significant potential offered by Block 9 as soon as possible.”
(Information sourced from Melbana Energy press release)