Cuba Block 9 Valuation, page-6

LAF, i do give credit to your concerns around cash burn vs income (let's face it, it's all speculation for now as income is currently at $0 pa.) and hence why i allowed 25% dilution for future CR's. I used a super conservative approach (success based) to highlight the lowest case scenario and the current undervalued state of the SP....tried to approach it in much the same way a broker analyst would. I'm of the opinion though if....and it's a very big IF.....there is success at only one of the matured prospects, booked reserves will be significantly higher than 7mmboe (of which your above calcs would be based on) and hazarding a guess that AGMI are investing with much higher expectations than one successful well producing 1600bpd.....fingers crossed for a full field development of 5 x 10 that amount....minimum (35-70mmboe reserves). The current cash burn of $4mill p.a. should come down by 500k - 1mill now that all expenditure for block 9 and the intensive "person" hours have been negated?

The way this has been played down over the last year or so and inturn the negative sentiment it's created does back up your outlook imo, that's exactly how the market is viewing it, you're spot on there. However, I'm of the opinion the market currently has this wrong and will wake up to it in time. Over the next 12 - 24 months we'll see big oil come back in a big way, eg. Tullow have recently partnered with Karoon to drill unexplored territory offshore Peru in 2020, something we definitely wouldn't have seen happening during the last 4 -5 yrs.....green shoots are appearing, they've gotta play catch up because we're coming out of the most under invested period in oils history and once the full effects are realised it really is game on....Melbana are box seated for this step change imo and have a great portfolio of assets already starting to attract the attention of bigger players.