Melbana secures farmout for Cuba Block 9
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Melbana Energy Limited (ASX:MAY) has signed a binding Heads of Agreement (HOA) with Sonangol E.P. — the National Oil Company of Angola — for the acquisition of 70% Participating Interest in the onshore Cuba Block 9 Production Sharing Contract (Block 9 PSC).
The deal includes a firm commitment from Sonangol to drilling two exploration wells in Block 9.
Following the execution of a farmout agreement, satisfactory completion of confirmatory due diligence and receipt of all necessary regulatory approvals Sonangol will fund 85% of all costs associated with the completion of the drilling of Melbana’s two highest ranked and high impact targets (Alameda and Zapato) to earn a 70% participating interest in Block 9 PSC. The first well is expected to commence drilling in Q3 2020.
Sonangol will pay Melbana approximately A$5.0 million to cover its expenditure to date related to Block 9; and has the the option to assume operatorship of Block 9 PSC at the conclusion of this two well drilling program.
In order to maintain a 30% participating interest and remain as operator of the Block 9 PSC until it is concluded, Melbana will contribute 15% of the costs of the two well drilling program.
Last year Melbana conducted an international tender for rigs and services for this two wells program and has now begun the process of refreshing these tenders. Permits that have been previously awarded, including land access and environmental permits, have been kept in good standing and are in the process of being extended.
Preliminary findings from these activities have identified potentially suitable rigs and crews available for this drilling campaign next year and relevant service providers have expressed their interest and capacity.
Melbana Energy’s Chairman, Andrew Purcell, said, “As the National Oil Company for one of Africa’s largest producers, Sonangol has significant experience operating on and offshore and in the upstream, midstream and downstream sectors of the oil and gas business. Moreover, Sonangol is already qualified to enter into contracts with CUPET. This will assist with the timely receipt of the necessary regulatory approvals. We appreciate the opportunity to be the operator of this two well drilling program as this will allow us to monitor costs and seek to drive the agenda.
“Maintaining a 30% interest in this very prospective area is a great result for our company as it will give our shareholders a significant interest in any discovery that may be made. We are pleased with the increasing momentum building towards drilling several high impact exploration wells in Australia and Cuba. Together they are targeting over 600 million barrels of oil equivalent (prospective resource, best estimate), which is the scale of opportunity we have been working to deliver to our shareholders.”
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.