Approvals enable Melbana to move forward in Cuba
Melbana Energy Limited (ASX:MAY) has been a bit quiet of late, however today updated the market on its activities.
In good news for the company, it was today informed by CUPET, the national oil company of Cuba, that the Cuban oil company has received all necessary approvals to confirm amendments to the Block 9 Production Sharing Contract (PSC) requested by Melbana.
The amendments are expected to be formally documented in October and will assist Melbana in its negotiations with prospective partners for its proposed 2020 drilling programme in Block 9.
The approved amendments to the Block 9 PSC cover extension of the current exploration sub-period to 1 November 2020 with no change to the commitment to drill one exploration well during this sub-period and the extension of the exploration period by one year.
Melbana will also relinquish 24.6 km2 (about 1% of the total area). This does reduce the total prospective resource (best estimate) for Block 9 from 718 million barrels of oil to 676 million barrels of oil (see cautionary statement below), however that is still a solid number.
Meanwhile at Beehive
The purpose of today’s news was to advise shareholders that the company has received a request for a one-month options extension from TOTAL S.A. and Santos Limited.
Total and Santos will have a further 30 days to exercise the options they each hold to acquire a 40% interest in WA-488-P in return for agreeing to jointly fund the drilling of Melbana’s Beehive-1 exploration well.
TOTAL and Santos have completed their technical assessment of the Beehive prospect, but require the extra time to finalise their commercial analysis and seek internal approvals.
This extension should not impact the ability of Total and Santos to drill the Beehive-1 exploration well before the end of next year, should Santos and Total elect to exercise their options.
Total and Santos have until 4 November to alert Melbana to their intentions, with the options to expire on 4 December.
Beehive has been assessed by Independent Expert McDaniel & Associates to contain a best estimate prospective resource of 388 million barrels of oil equivalent.
However it should be noted that the estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Future exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. All quoted volumes taken from Independent Expert McDaniel & Associates Competent Persons Report 30 June 2018. Gas to Oil Factor: based on Mcf to BOE energy equivalence conversion of 6 to 1.
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