HIGHLIGHTS
Cuba
Block 9 PSC (Melbana 30% participating interest and Operator)
- Alameda-3 well TD reached at 3880mMD. Cores and high quality well logs acquired in Alameda and Marti
reservoirs indicated a significant level of fracturing.
- DST performed in Marti reservoir unable to recover drill string fluids. Oil observed on the drill string and high
formation pressure demonstrated the presence of oil very deep in the structure, consistent with findings from
Alameda-1.
- DST performed in Alameda reservoir, significant pressure response at surface upon perforation. Consistent with
results from the deeper Marti reservoir, drill string fluids were unable to be recovered during flow testing.
- Alameda-3 well suspended whilst studies conducted that seek to explain these results relative to strong oil
shows previously encountered in these reservoirs by the minimally offset Alameda-1.
- Field development planning and negotiations with potential farminees and oil traders continued to advance
during the quarter.
- Independent estimate of Unit 1A resources in the Amistad structure:
OIL IN PLACE (100% share, best estimate)
Prospective Resources 711 million barrels
RESOURCES (100% share, best estimate)*
Prospective Resources
32 million barrels
• 70% Chance of Discovery
Australia
- Environmental permit granted for WA-488-P (Melbana contingent cash/royalty interest), exploration success in
which could prove up the exploration play type in WA-544-P and NT/P87.
Corporate
- $12.4 million cash available at the end of the quarter.
* Contingent and Prospective Resources Cautionary Statement - The estimated quantities of petroleum that may
potentially be recovered by the application of a future development project(s) related to discovered and undiscovered
accumulations. These estimates have both an associated risk of discovery and a risk of development. Future
exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially
moveable hydrocarbons. All quoted volumes have been taken from independent expert McDaniel & Associates
Competent Persons Report dated 20 March 2024. Melbana is not aware of any new information or data that materially
affects the information included in that announcement and that all the material assumptions and technical parameters
underpinning the estimates in the announcement continue to apply and have not materially changed.
Melbana Energy Limited (Melbana or the Company) provides the following summary in
relation to its activities during the quarter ended 30 June 2024.
CUBA
Block 9 PSC (Melbana 30%, Operator)
Alameda-3 appraisal well operations
The Alameda-3 appraisal well was drilled to TD of 3880mMD during the quarter. The well was
significantly delayed due to drilling operations issues: The well was side tracked at 2908m due to hole
stability issues and an inflatable external casing packer (ECP) running tool was stuck for some
considerable time in the 7” liner section (TD 3642m).
Specialist milling and fishing tools and personnel successfully retrieved the fish and subsequent
casing integrity logs and pressure testing confirmed the integrity of the 7” liner.
Wireline logging, including FMI, of both the Alameda and Marti reservoir sections were undertaken,
indicating a naturally highly fractured reservoir and over 100m of conventional (not fracture
dependent) pay in the Alameda section.
Flow testing was undertaken on both the Marti and Alameda reservoirs. The Marti reservoir was tested
via a 4 ½ “ slotted liner over the interval 3642-3880mMD with a packer set at 3531mMD. The Alameda
reservoir was tested via perforation of the casing between 3272mMD and 3450mMD (see Figure 1).
The objective of the testing was to determine oil quality and flow rates for the reservoirs, which are
separated by effective seal rocks (see Figure 2) to gain a broader understanding of the reservoirs’
production characteristics.
Both reservoirs were tested as single zones in a part of the geological section interpreted to contain
the highest porosity and productivity interval, as indicated by conventional log analysis and FMI (see
Figure 3 and Figure 4).
In both tests, there were positive indications of high pressure at surface. In the case of the Alameda
test, immediately upon firing the perforation guns, there was positive indication of pressure at surface,
which confirmed the perforations had been successful and pressure then quickly built to 3034 PSI.
Test gauges were opened on variable choke sizes and shut in periods were performed to build
pressure. However minimal returns were achieved at surface after reopening and the complete
removal of drilling mud and downhole fluids from the test string were not achieved and oil did not flow
to surface.
Although no uncontaminated oil samples were obtained in either the Marti or Alameda reservoirs, oil
samples were recovered on reverse circulation of the DST string in the Marti reservoir and have been
analysed to have API of 19 with 2.3% Sulphur.
The inability of the well to flow does not fit with previous observations and expectations, given wireline
and FMI over both intervals indicated substantial fracturing in the Marti reservoir interval (Figure 3)
and good quality conventional (i.e. not fracture dependent) pay in the Alameda reservoir interval
(Figure 4).
The Company is studying the results, all available data and analogous wells, which could be contribute
to a potential future remediation plan, if the issue is considered most likely due to a treatable formation
damage mechanism. International and local expert knowledge is being drawn upon to ensure critical
lessons learned are captured for incorporation in future activities.
The well was suspended, DST string removed, and pressure gauges extracted, and the rig
demobilised from site to reduce costs.
The results do not impact initial field development plan based on Amistad Unit 1B which is on track to
deliver first oil from Block 9 this calendar year.
Amistad field development planning
Melbana is developing remediation strategies that are aimed at restoring the higher flow rates
observed in the Alameda-2 Unit 1B production well during the original DST prior to it being killed and
shut in for an extended period.
Laboratory analysis of the fluids recovered from this unit, reservoir modelling and Cuban experience
of successfully remediating reservoirs that have behaved similarly in the past have been useful inputs
to the selection of the preferred strategy.
The initial field development plan, based on the relatively shallow Unit 1B of the Amistad sheet, was
presented to the Company’s partner then to the Cuban regulator in a series of workshops and field
trips held in Cuba during the quarter.
The initial field development plan (see Figure 5) is to rapidly bring the Alameda field to production by
drilling simple, low-cost wells on existing 2D seismic lines. This would also continue to appraise, derisk and upgrade the contingent and prospective resources estimated by the Company’s independent
reserves and resources certifier.
The proposed phased development plan is for new Unit 1B production wells based on existing 2D
seismic to develop the 1C resource (16 million barrels1
) whilst acquiring 3D seismic to locate
subsequent development wells more accurately to develop the entire recoverable volume more
efficiently.
The goal remains to achieve the first export of oil before the end of 2024.
A complete assay of Unit 1B oil was received from specialist laboratories, which has confirmed that
Unit 1B oil from the Amistad sheet is suitable for refining and has API gravity of 19.8° and sulphur
content of 2.7%.
Meetings were held with potential oil purchasers who indicated that the crude has a relatively high
share of the higher value components in the distillation range of 65° to 350°C, which broadly
corresponds with the production of gasoline, jet/kerosene and diesel. The share in this range is ~40%
compared with <30% typical for crudes of similar API.
The assay results indicate that the crude is marketable to refineries that specialise in such crudes.
Melbana’s engineering team continue to optimise their plans for the delivery of oil produced in Block
9. Initial production is now planned to be de-watered in the field and delivered by truck to the
Matanzas Supertanker port, located a short distance from Block 9, where it will be stored in a
dedicated tank awaiting export.
Amistad Unit 1 A reservoir resources certification
During the quarter, McDaniel & Associates (McDaniel) provided their independent assessment of Unit
1A - one of four shallow oil-bearing units (collectively referred to as Amistad) encountered in the Upper
Sheet whilst drilling the Alameda-2 appraisal well.
The McDaniel resource update only concerns the Unit 1A reservoir containing heavier oil than the
better quality and more easily exploited Unit 1B reservoir oil.
McDaniel provided a Prospective Resource Category for Unit 1A (but with a Chance of Discovery of
70%) that could be similarly derisked by drilling an additional appraisal well and testing on pump in
that area.
The total resources for the Unit 1A and Unit 1B are summarised in Table 12, below, with more details
on McDaniel’s assessment of Unit 1A and Unit 1B presented in Appendix A and Appendix B
respectively.
AUSTRALIA
Hudson Prospect in NT/P87 and WA-544-P (Melbana 100%)
Melbana holds 100% of WA-544-P & NT-P87 exploration permits containing similar Carbonate
Platform opportunities with similar resource potential as the adjacent WA-488-P exploration permit,
which contains the Beehive drilling prospect (see Figure 6).
Beehive received drilling environmental approval during the quarter and is aimed at testing a large
Carbonate Platform opportunity that could contain up to 1.4 billion barrels of oil (Prospective
Resource, high estimate).
The Company sold WA-488-P in late 2021 for US$7.5 million plus future contingent cash payments
of US$5 million and royalties of US$10 million per each 25 mmboe produced.
Melbana is seeking farminee(s) to fund a forward work programme (3D seismic survey and contingent
drilling option) in the permits.
HEALTH AND SAFETY
No lost time incidents occurred during the reporting period.
Payments to related parties and their associates, totalling $136,000 as outlined in Section 6 of the
accompanying Appendix 5B, related to payment of directors’ fees.
The Company had total cash on hand of $12.4 million as at 30 June 2024.
