Ann: Cuba, Block 9 PSC Update on Alameda 2 appraisal well, page-302

G'morning all.

From my understanding, it is the same rig used for Zapato-1. It is Sherritt's Rig No.1. The company expects it will be decommissioned at its current drill in late March. From what I can make out, it is currently nearby in Block-10, so the logistics are not overly complicated but we should allow at least one week for decommissioning and movement. Assuming no problems, it should arrive at Alameda / Block-9 sometime in early April. Setting of cellar and installation of matting needs to take place prior to installation. From looking at the 2021 operations, I would allow 3-4 weeks from the time the rig arrives to the time of spud (even though the pad has been "prepared"). Maybe 2 weeks if everything goes perfectly, but more likely 3-4 (based on Melbana's own experience and experience with similar rigs, such as MIN's own experience etc.). Assuming that is right, we won't have a spud until around the last week of April or even into early/mid May. Being a sceptic, I am guessing sometime in the first half of May. Remember, then, that A-1 spudded on 13th September 2021, but didn't intersect 670m oil shows until the 4th October. That is, about 3 weeks later.

So. Based on all this, I think the likely scenario is:

1. Rig movement to site - early April.
2. Spud - early May
3. Intersect oil shows - early June.
(or thereabouts).

Note that Zapato-1 spudded on 23rd May 2022 and did not reach the 2,150 metres mark until 16th August 2022. That's 3 months. So thinking it is as simple at sticking a hole in the ground and connecting a pump is a really silly thing to think.

Note also that the language changed slightly yesterday also. The "surety" of production was downgraded, somewhat, to "production if warranted". AP has certainly dialed-back his enthusiasm somewhat, presumably to keep a sense of reality to this whole thing. This is not a bad thing (it would be an idiot or town fool to claim otherwise!) as he needs to promise less and deliver more if he is going to deliver longer-term gains to shareholders.

These are just my thoughts. I am confident that some tool will call me a downramper for this, as it does not match the overly-bullish "production in March" calls.

With all this in mind, I think the SP will "drift" (range trade) between now and the third week of March. Nobody on planet earth knows that range. Nobody. Yes, it could break higher, but equally, some traders may take their money elsewhere for a few weeks, and come back to the MAY table in four weeks time. So for me, it is a range trade (probably from a long position - i.e. buy the dips and then sell the spikes - as opposed to a short position).

All a guess. All IMO etc.

Enjoy your friday

Kit.