Melbana Energy Limited (“Melbana”) advises that Petro Australis Limited (“Petro Australis”) has failed to achieve pre-qualification to enable a timely application to Cuban regulatory authorities for their acquisition of a 40% participating interest in the Block 9 Production Sharing Contract (“Block 9 PSC”).
Cuban regulatory pre-qualification is normally an administrative process required for parties to demonstrate that they satisfy the financial and technical competency criteria specified in applicable Cuban legislation before they can acquire certain interests in Cuban hydrocarbon assets.
As a result, Melbana has terminated its commercial arrangements with Petro Australis such that Petro Australis no longer holds a right to acquire a 40% participating interest in the Block 9 PSC. Petro Australis has stated that it proposes to continue to seek Cuban Regulatory pre-qualification and, upon completion, take up a participating interest in Block 9. Melbana considers that the time for prequalification is passed and that Petro Australis’ entitlement to any interest in Block 9 has lapsed.
Melbana originally pursued Block 9 PSC in collaboration with Petro Australis under an agreement between the companies entered into in May 2012 whereby Petro Australis was granted a conditional right, which it had to exercise prior to 2 September 2017, to acquire a 40% participating interest in the Block 9 PSC (subject to regulatory approvals). On 25 August 2017 Petro Australis provided a notice to Melbana seeking to exercise that right.
However, since entering into that agreement (including in the two months since it sought to exercise that right), Petro Australis has failed to obtain Cuban regulatory pre-qualification.
Melbana will continue the farmout process it has already commenced and Melbana’s plans to drill up to two wells on Block 9 in 2018 remain on track.
Melbana Energy’s MD and CEO Peter Stickland said:
“Melbana now has an unfettered 100% participating interest in Block 9 PSC providing additional farmout flexibility. We will continue our farmout process with our data room remaining open and active. Our preparatory activities for drilling in 2018 also continue unabated with good progress being made in Cuba to advance our readiness to drill up to two wells in Block 9 commencing mid-2018.”
