Ann: Alameda 3 Drilling Update, page-117

They have proven that they can produce (from the upper layers), albeit at lower flow than optimal and with a heavy API (circa 19, but still in line with other Cuban oils). Add to that, they have provided a field development plan that clearly outlines their ambitions, and have stated - currently - that artificial lifts or horizontals can be considered to increase flow if deemed necessary. At present, thought, "flow" to buyers is not needed as they are still negotiating sales (our first A2 yield is still sitting in storage) and transport logistics are still at planning stage. There is work to be done, and they are doing it.

To me, the fact that AP and the crew have been conservative (by keeping A2 shut in as a precautionary measure until A3 is completed) is not a bad thing. A1 was perceived as "rushed" and the problems they had in the lower sheets could be attributed to lack of knowledge and experience, failure to plan, and haste. Damned if they do, fanned if they don't" it seems: caution is being exercised and suddenly we all freak out.

A3 is not a wildcat. There is oil in Marti but there are also questions (how much, what pressure, and what API, amongst others). The company is confident that their geos have this right, and the outcome will be good quality oil (at a guess, above an API of 30), and with good flow. The "punt" you take with Melbana is that nothing will go wrong, and there are no cost / time blow outs.

Patience is required. Simple as that.

Kit