Melbana is one of the few Western companies, and the only one listed on Australia's stock exchange, with an established footprint in Cuba. A drilling campaign set for next year could cost the company about $30 million at the high end and the company raised about $1.8 million through the recent placement of shares. To the period ending June 30, the company had about $2.7 million in cash on hand.
On Monday, the company said Petro Australis Ltd. exercised a right to move into its Cuban acreage by taking on a 40 percent participating interest in the so-called Block 9 production sharing contract. Through the arrangement, Petrol Australis assumes 40 percent of the costs associated with future operations.
"With Petro Australis exercising its back-in right, Melbana's funding obligations will be significantly reduced whilst still retaining a very large exposure to this world-class oil exploration opportunity," Melbana CEO Peter Stickland said in a statement.
Melbana last week announced it started the preliminary work necessary to get the proposed Alameda-1 well location ready for future operations. Up to two wells in Block 9 are anticipated for next year and the company said its Cuban portfolio contains an estimated 637 million barrels of prospective recoverable reserves.
Melbana pursued its stake in Cuba in 2012 in coordination with Petro Australis, which maintained a right to secure up to 40 percent. That agreement would've expired Sept. 2.
Petro Australis had no public comment on the move.
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