Melbana Energy has announced a placement to raise approx. $1.8 million and an entitlement offer of shares to raise up to approx. $4.8 million (before costs). Proceeds from the Placement and the Entitlement Offer will be used primarily to allow the Company to undertake the necessary initial preparations for the planned Cuba drilling program in 2018 on the Company’s 100% owned(1) onshore Block 9 PSC (but excluding drilling itself). The net proceeds will also be used for corporate costs and for general working capital purposes.
Cuba block 9 PSC has exploration potential of ~12.5 billion barrels of oil-in-place with recoverable Prospective Resources of 637 million barrels (100% share, unrisked Best Estimate). The two highest priority drill targets, Alameda-1 and Zapato, have combined exploration potential of 200 million barrels (100% share, unrisked Best Estimate) with Alameda-1 alone presenting an opportunity to drill three objectives with combined exploration potential of over 2.5 billion barrels Oil-in-Place and 130 million barrels of recoverable (100% unrisked, Best Estimate basis).
Hartleys and Patersons were Joint Lead Managers to the Placement and the Entitlement Offer, and Patersons are partially underwriting the Entitlement Offer up to $3,420,000 with subunderwriting support from certain new and existing investors, including the Directors of Melbana who are sub-underwriting the Entitlement offer for $1,040,000.
Melbana’s CEO and Managing Director, Peter Stickland, commented on the Entitlement Offer:
'We are pleased to have received such strong support for Melbana and I would like to welcome our new shareholders and thank our existing shareholders that participated in the placement. We are also pleased to be offering our existing shareholders the chance to participate in the capital raising on the same terms as the placement by way of a non-renounceable rights issue.
The work Melbana has undertaken on our Cuba onshore Block 9 PSC during the past 18 months has demonstrated that it is a world class exploration opportunity with enormous exploration potential.
Given this potential, we are aiming to drill up to two wells in Cuba in mid-2018 with the current highest priority prospects, Alameda-1 and Zapata, collectively targeting over 200 million barrels of recoverable oil (100% unrisked, Best Estimate basis) which, on a success case, would be company making for Melbana.
Importantly, there is a significant amount of preparatory work that needs to occur to get the Company into a position to drill in Cuba in 2018 and the funds raised from the placement and the entitlement offer will be primarily used for this purpose, as well as corporate costs and general working capital expenses.
Melbana is entering an exciting period as it moves towards drilling in 2018 in Cuba and we look forward to the support of our shareholders as we move into this new phase.'
(1) Subject to a conditional back in right option held by Petro Australis Limited to obtain a direct 40% participating interest in the Block 9 PSC expiring on 2nd September.
