Summary of Melbana (MAY)

Melbana Energy Ltd - MAY.ASXMC: $50m
Cash: $10.6m
Debt: Non
SOI: 2.3B (current cap raise underway which will dilute SOI to 2.6b)

Melbana (MAY) is an upstream oil and gas exploration company with projects located in both Cuba and Australia. The company is just 1 month away from spudding the highly anticipated Alameda prospect in their world-class exploration PSC, Block 9 in Cuba.

Block 9 - 30% Ownership

Block 9 is a large onshore PSC acreage (2.1% of Cuba's total area) located on the north coast of Cuba, 140 km east of Havana. Block 9 has an already proven hydrocarbon system with previous historic exploration wells indicating the presence of hydrocarbons. The block is also supported by being along the trend line with the multi-billion barrel Varadero oil field, located just 35km away. A key feature of the Varadero field is the major fold and thrust belt structures that fracture and fold carbonate units, which is interpreted to extend into Block 9.

Block 9 has been independently assessed to house 15.7 billion barrels of oil (nearly a trillion dollars worth) with prospective resources of 718 million barrels. These estimates are based upon pre-existing seismic, gravity, magnetic and surface data sets. There is the potential for Melbana to expand its resource estimates as the company is expected to shoot new seismic lines on the additional 19 structural leads identified.

Block 9 consists largely of low-lying farm land with sealed roads that connect Block 9 all the way to Havana. Extensive oil and gas infrastructure surrounds Block 9, with a deep-water port housing an oil terminal located 75km away and the second largest international airport within 40km.

Block 9 Agreements

In 2019, Melbana entered into a farm-out agreement with Sonangol, Africa’s second largest oil producer, for Sonangol to acquire a 70% interest in Block 9. In the agreement, Sonangol will fund 85% of the two well drilling programs. Melbana will remain the operator until the completion of both drills.

Melbana has additionally signed an offtake agreement with CUPET, Cuba’s national oil company, that allows CUPET to purchase discovered oil at international prices. The agreement also allows Melbana to sell the oil on the international markets. Cuba has multiple modern land drilling rigs currently operating in Cuba and Melbana has selected Sherritt International as the drilling contractor.

Alameda Prospect

The Alameda Prospect being drilled in September contains three targets, U1, N and Amistad, Alameda can be tapped from just one slightly deviated well. The most exciting prospect is the lower sheet target, Alameda, which is in a similar structural setting as the Veradero fields.


The three targets are independently assessed to contain a prospective resource of 141 million barrels of oil. The Alameda-1 well is estimated to take around 80 days to drill, placing completion around the end of November.

The chance of success for the 3 prospects is estimated to be 32% (high by industry standards) due to the supportive data from the previous exploration wells, Marti-2 and Marti-5. The Marti-5 well, drilled nearly 30 years ago, recovered 44bbl of 24° API oil (high value light oil) and had numerous oil shows extending over a 850m Lower Sheet section (where the Alameda prospect is located). The U1 target is the structure that has been identified as the updip of the tested oil recoveries in the Marti-2 well.

Zapato Prospect

The Zapato prospect is being drilled straight after the Alameda prospect with the spudding event expected at the end of December. Construction of the well-pad is currently underway. The Zapato structural feature has a crest at approx 2,000m with a vertical relief of 1,000m.

The prospect is independently assessed to contain 95 million barrels of oil. Drilling is expected to conclude mid-way through March 2021.

The chance of success is 23%. The Zapato field is believed to be the source of the highly productive Motembo oil field, which historically produced high-quality light oil. Studies have indicated there is a strong gravity and magnetic alignment of the structure which is further supported by seismic and surface data. Carbonate duplex structures such as Zapato are being targeted due to their potential to contain Varadero style oil accumulations.

Timelines