Melbana Energy releases update on Cuban & Australian projects
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Melbana Energy Limited (ASX:MAY) has today provided an operational update on its energy projects, as well as an update on its corporate activities.
Key to the company’s current plans are its two Cuba-based plays, the Block 9 oil project and the Santa Cruz oil project.
MAY’s Cuba-based team has undertaken a number of site visits and community liaison sessions to support potential civil works.
Permitting and drilling rig preparatory work is continuing at MAY’s Block 9 project in Cuba, in readiness for the planned drilling program. Intermediate approvals are currently obtained for both the Alameda and Zapato exploration wells, as part of the company’s progress towards submissions for the final Approval to Drill permits.
Civil works contract scope definition has also progressed and the civil works tender evaluation for the Alameda1 drilling pad was completed with a preferred contractor identified. Discussions are now ongoing with the preferred drilling rig provider, which is an established local entity, with a drilling rig being identified and a drilling window nominated as notionally commencing in December 2018.
The proposed rig is currently planned to be refurbished and upgraded for maintenance and operational purposes in late Q3 2018.
The company advised that the final decision on drilling contractor, drilling target and timing will be influenced by a number of factors, including any incoming party into Block 9 and their plans, their preferred drilling targets and confirmation of drilling rig availability.
Block 9 Farm-Out activities continue, with multiple interested multinational parties currently engaged in assessing the prospectivity of the block.
MAY’s project work continues on the evaluation of the Santa Cruz Incremental Oil Recovery (IOR) opportunity.
It’s worth noting that this is an early stage play and investors should seek professional financial advice if considering this company for their portfolio.
Australian ‘Beehive’ project
WA-488-P (100% owned by MAY) is located in the Petrel Sub-basin in the Joseph Bonaparte Gulf between the producing Blacktip gas field and the undeveloped Turtle and Barnett oil discoveries and has an area of 4,074 km2.
The Polarcus Naila — a modern 14 streamer 3D/4D seismic vessel, used for research and surveys — is expected to commence acquisition of the Beehive 3D Seismic Survey in July and be completed before the end of August 2018. The survey will take a maximum of 30 days.
The large Beehive Prospect is one of the biggest undrilled hydrocarbon structures in Australia.
French major Total (Euronext:FP, NYSE:TOT) and Australia's Santos (ASX:STO) have agreed to fully fund a 3D seismic survey over the Beehive prospect, in return for a further option to acquire an 80% participating interest in the permit by fully funding the Beehive-1 exploration well.
A short video on Beehive is available on the Melbana website (melbana.com) under News and Broadcasts / Broadcasts and Videos.
Tassie Shoal projects
According to MAY, recent reports that the Barossa Joint Venture has entered FEED (front end engineering and design) to replace declining Bayu Undan gas availability for the Darwin LNG plant “highlights that there remains a number of discovered gas fields in the region of Tassie Shoal that are undeveloped and stranded”.
As such, the Tassie Shoal LNG and/or Methanol Projects, with long term environmental approvals in place, remain potential development paths for stranded resources, including Evans Shoal gas.
MAY stated that the Tassie Shoal LNG Project’s “shallow water platform fixed to seabed design” remains a low cost development option for LNG production “should a means of disposing of the high CO2 content in Evans Shoal gas be economically achieved”.
Alternatively, the Tassie Shoal Methanol Project, with its ability to receive and process raw gas at the field with up to a 30% CO2 content, remains an alternative development path should the titleholders prefer to proceed with an achievable low-cost development plan for high CO2 gas.
The company is considering a number of corporate business development initiatives.
A potential dual listing on the UK’s Alternative Investment Market (AIM) is being considered by MAY, following recent marketing initiatives in the region which demonstrated a strong UK investor interest in Cuba as an investment destination and in particular, MAY’s portfolio.
The company intends to hold a General Meeting to provide the necessary constitutional changes required to enable an AIM listing. These proposed constitutional changes will provide flexibility but have no effect unless the Board determines to proceed with an AIM listing.
In looking at ramping up its business development activities, MAY has engaged McDaniel & Associate Consultants, an independent expert with substantial Cuban experience, to assess the prospective resources available in Block 9. The company expects their assessment report to be available in the third quarter.