HIGHLIGHTS
Cuba
Block 9 PSC (Melbana 30% participating interest and Operator)
- Drilling of the Alameda-2 appraisal well (the first of two appraisal wells in Block 9 planned for
this year) commenced during the quarter
- Alameda-2 has a planned total depth of 1,960mMD (1,840mTVD). Its general objective is to
allow oil to flow from the three productive units encountered previously in the shallowest of
the three oil bearing reservoirs (designated Amistad)
- Production test of Unit 1A (the shallowest unit of the upper Amistad interval) flowed oil to
surface unassisted, demonstrating moveable hydrocarbons at this level
- Recovering oil unassisted from this shallow depth (hence lower pressure) was only given a
low chance and therefore did not materially contribute to the previous resource estimate
- With a productive interval of 63 metres TVD this interval now needs to be reconsidered and
may, with engineering solutions, lend itself to future development
- The volumes of the Amistad structure have been independently estimated as 1.9 billion
barrels of Oil in Place and 88 million barrels of Prospective Resource (unrisked gross best
estimate)1.
Corporate
• Appointment of Dr. Chris McKeown as Chief Commercial Officer
• Share registry manager changed to Boardroom Pty. Limited
• $35.1 million cash available at the end of the quarter
SYDNEY, AUSTRALIA
Melbana Energy Limited provides the following summary in
relation to its activities during the quarter ended 30 June 2023.
CUBA
Block 9 PSC (Melbana 30%, Operator)
Drilling of the Alameda-2 appraisal well commenced during the quarter on 20 June 2023. The
objectives of this first of two appraisal wells planned for 2023 is to better understand the commercial
and technical qualities of the first of the three geologically independent oil-bearing intervals
(designated Amistad), each with moveable oil accompanied by high pressure, encountered whilst
drilling the Alameda-1 exploration well that completed in 2022. The appraisal program includes the
taking of cores, wireline logging, flow testing and quality analysis.
Subsequent to the end of the quarter, the Company announced2 the first production results from the
first and shallowest unit of the Amistad interval, designated Unit 1A (see Figure 1).
Two whole rock cores were taken within the upper portion of the reservoir at separate intervals
between 476 - 481 mMD and 505 - 508 mMD. The presence of black oil was noted in naturally
fractured limestone in both cores (see Figure 2).
Flow testing operations of Unit 1A then commenced over a gross open hole interval of 63 metres (445
- 508 mMD) with the upper packer set within the casing. Black oil flowed to surface after a 5-hour
period through a 32/64” choke, but not at a measurable rate and with a maximum well head pressure
at surface of 125 psi. The maximum well head pressure measurement has been calculated to be the
equivalent of the interval pressure supporting a column of dead oil in the string and accounts for the
low flow rate seen at the surface. A total volume of 40 barrels of oil were recovered at surface and
samples sent for laboratory analysis (see Figure 3). Initial results indicate that the oil recovered has
an API gravity of 11.7° (at standard temperature), a typical quality for shallow oil given bacteria that
removes the lighter end of the hydrocarbon chain can exist at the temperatures there. Viscosity was
3783 cP at 50°C.
Such API and viscosity values are similar to other shallow oil fields in the northern Cuban fold belt
where more than 200 million barrels of oil has been produced over the past 20 years. Production
from these fields use a combination of various pumping methods and free flow.
Testing operations for this first and shallowest unit are now complete and results are being evaluated.
The three units of the Amistad reservoir have been independently assessed to contain 1.9 billion
barrels of oil in place and 88 million barrels or Prospective Resources (unrisked gross best estimate)1
AUSTRALIA
AC/P70 (Melbana 100%)
Petroleum Exploration Permit AC/P70, located offshore northern Australia in the Territory of Ashmore
and Cartier Islands, was granted to a wholly owned subsidiary of Melbana in February 2022. The
primary term was for three years ending February 2025.
AC/P70 contains the undeveloped Vesta-1 oil discovery, drilled in 2005. An appraisal well drilled in
2007 identified a gas cap. This complex field is an attractive opportunity to a junior explorer like
Melbana with the technical capability and track record of identifying new play types and attracting
large, well-funded, partners to test its exploration theses, often by overturning conventional thinking.
During the reporting period an application for a suspension and extension of AC/P70 was approved
by the regulator – the National Offshore Petroleum Titles Administrator. The primary term, during
which the drilling of one exploration well must take place, now ends in August 2027.3
Hudson Prospect in NT/P87 and WA-544-P (Melbana 100%)
Petroleum Exploration Permits NT/P87 and WA-544-P, located offshore northern Australia in the
Joseph Bonaparte Gulf (see Figure 4), were granted to a wholly owned subsidiary of Melbana in
November 2020. The primary term was for three years ending November 2023.
The permit areas, containing the undeveloped Turtle and Barnett oil discoveries, are adjacent to WA488-P which Melbana sold to a US oil major in 2021. That company is making a country entry to drill
the Beehive prospect – an isolated carbonate build up - located within WA-488-P. Isolated carbonate
build ups host some of the world’s largest oil reservoirs, but it is an untested play type in Australia.
Melbana has no exposure to the cost of that exploration well but has contingent cash and royalty
interests, respectively subject to future elections made by the purchaser and production following a
successful exploration well.
Subsequent to the end of the current reporting period, Melbana announced4 that it had completed its
initial studies (including reprocessing and reinterpretation of legacy 2D seismic data) and identified a new conceptual target within these permit areas it is calling the Hudson Prospect – also an isolated
carbonate build up. See Table 2 for its initial estimate of the Prospective Resources of the Hudson
Prospect, based on a probabilistic assessment with a 12% estimate for the chance of hydrocarbons.
Melbana has commenced a process to farmout some of its 100% interest in the permit areas to fund
the acquisition of a 3D seismic survey to further derisk the prospect.
CORPORATE
During the quarter Melbana’s executive team expanded when Dr. Chris McKeown joined as Chief
Commercial Officer. Chris has held a range of executive roles including CEO and VP Business
Development in projects in Europe, the Gulf of Mexico, Southeast Asia, New Zealand and Australia.
Over his 26-year career, Chris has commercialised oil and gas assets, delivered new country entries
and farmouts and generated over $1 billion in corporate deal flow. He joins Melbana after a decade
with New Zealand Oil & Gas (ASX: NZO).
Also during the quarter the Company changed its registry provider to Boardroom Pty. Limited.
Payments to related parties and their associates, totalling $207 thousand as outlined in Section 6 of
the accompanying Appendix 5B, related to payment of directors’ fees.
The Company had total cash on hand of $35.1 million as at 30 June 2023.
