Melbana Energy Limited (MAY) (Melbana) is pleased to advise that Petro Australis Limited (Petro Australis) has provided a notice to Melbana exercising its back-in right with respect to a 40% participating interest in Cuba Block 9 Production Sharing Contract (Block 9 PSC).
Subject to Petro Australis receiving the necessary Cuban regulatory approvals (including pre-qualification) for this transfer, the Block 9 PSC Joint Venture would consist of Melbana 60% (and Operator) and Petro Australis 40%. Petro Australis is responsible for 40% of certain back costs as well as 40% of future costs associated with Block 9 PSC.
The parties will jointly proceed with the already commenced farmout process and Melbana’s plans to drill up to two wells on Block 9 in 2018 remain on track.
Petro Australis Back In-Right
Melbana originally pursued Block 9 PSC in collaboration with Petro Australis under an agreement between the companies entered into in 2012 whereby Petro Australis was granted a conditional option, which it can exercise prior to 2 September 2017, to secure up to a 40% Participating Interest in Block 9 PSC (subject to regulatory approvals), as described in the prospectus dated 15 August 2017.
In the event the necessary regulatory approvals are not obtained, Melbana will continue with its current plans regarding Block 9 PSC predicated on Melbana’s100% participating interest.
Melbana Energy’s MD and CEO Peter Stickland said:
“The notice of Petro Australis’ intention to exercise its back-in right is a strong validation of our belief in the enormous prospectivity of Block 9 PSC in Cuba and will assist with our plans to rapidly unlock the Block 9 petroleum potential.
Our aim is to drill up to two wells in Block 9 PSC commencing in mid-2018. With Petro Australis exercising its back-in right, Melbana’s funding obligations will be significantly reduced whilst still retaining a very large exposure to this world-class oil exploration opportunity.
In addition, we are looking forward to leveraging off the Petro Australis teams long history of working in Cuba and their deep relationships in country which will be extremely beneficial to any future joint venture between the companies.”
