Melbana Energy Limited has received its first
payment from Sonangol in the amount of EUR425,000, pursuant to the Farm-in Agreement executed
last month. This payment is an advance against Melbana’s Past Costs for Block 9 PSC of ~AUD5
million, the balance of which becomes payable following Sonangol’s interest in Block 9 PSC being
formally recognised by CUPET – the National Oil Company of Cuba. CUPET has informally advised
this transaction has been approved and is working towards completing formal documentation.
Melbana, as Operator, is advanced in its planning to drill two wells in Block 9, onshore Cuba. It
expects to soon a) confirm design details of the drilling program, b) formally engage its preferred
drilling contractor and service providers, c) order long lead items and, d) establish an in-country
project management team (some members of which will be personnel from Sonangol experienced
in drilling operations). Once these tasks have been completed, application will be made for approval
to commence drilling the first well. This is largely procedural to confirm that a) all necessary permits
have been received, b) the operator is ready to commence drilling and, c) the drilling equipment is
within the parameters approved in the environmental and other related permits.
Drilling operations are currently forecast to commence in Q4 2020, subject to currently unknown
timing and movement implications due to COVID-19 management practices that Cuba and other
relevant countries may continue to employ in the months ahead. Certain inventory and equipment
will be needed to be imported into Cuba but shipping schedules have been reportedly relatively
unaffected by quarantine measures. Personnel, Melbana’s and those of the drilling contractor and
other service providers, are already largely present in Cuba and therefore not significantly affected
by restrictions on international travel. Senior members of the project management team will need to
travel to Cuba prior to the commencement of drilling operations, however, and it is currently not
known when this will possible or what protocols will need to be followed. A contingency has been
built into the drilling program to allow for this uncertainty.
CUPET has agreed that this drilling program would 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 commence 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”
