Melbana Energy (ASX:MAY) has failed to rouse investor excitement even after it declares its fresh pending drill run hunting for oil in the niche jurisdiction of Cuba.
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Shares were down -9% in the afternoon session, albeit on fairly low volumes (at least compared to the intrigue Melbana used to solicit) with shares down to 2cps and one-week returns -4.8%, as at 1.30pm today.
The culprit here could be a few things, just leafing through everything.
Melbana has 3.4B shares on issue, and it’s suffering from a confidence crisis of sorts as protracted delays continue to hit its Block 9 PSC project – with a fresh round of delays noted by management on Thursday.
“It’s been an impatient few months for everyone invested in the success of our Cuban operations,” Melbana chief Andrew Purcell said, in what could turn out be an understatement by some yardsticks.
“The delays to our work program, which have not been within our control, are now behind us and field activity is recommencing,” Mr Purcell added.
The thing is, this isn’t the first time Melbana has been hit with delays. Myriad obstacles appear to be the norm for the company, which probably has a lot to do with the fact that the company is in Cuba, a country not doing too well lately, seeing as its population continues to bail wholesale.
Since 2023, some 335,000 citizens have left the country, according to a recent writeup by the Havana Times. Of course, the Havana Times need to tow a certain line given government oversight of the country’s press.
Other reports paint a worse picture, with at least one study floating around stating that Cuba’s lost 24% of its population in recent years. Given the relative opacity surrounding Cuba (from a Western perspective), that’s hard to determine one way or another.
At any rate, it’s clear the Cuban economy is struggling, and Melbana’s positive messaging around Cuba’s operating environment stands in contrast to a lot of media coverage, which may or may not fairly be called Western propaganda, but there’s enough smoke to indicate fire.
But the problem is really that delays and obstacles have long been true for Melbana, which, in its defence, also had to grapple with COVID on top of a risky jurisdiction.
There’s also the issue that Trump decided to re-declare Cuba a terrorist state earlier this year, which may or may not be why Melbana in February started talking about RISC-approved resource classifications for WA’s North West Shelf, where Melbana has quietly held blocks for a while.
(A corporate presentation released by Melbana at around 1.20pm on Thursday dedicated a few slides to its Aussie assets but didn’t generate any immediate action.)
Then there’s the fact that while Melbana is technically an oil producer now, it’s still unclear who exactly oil is being sold to. News that Melbana has some 30Kbbl in inventory apparently wasn’t enough to prompt bullishness, either.
MAY last traded at 2cps.
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