Focus on Cuban oil growing stronger

In an update on operations for the year to June 30, Melbana energy said it was focused intently so far on its Block 9 production sharing contract in Cuba, which the company estimated to hold 637 million barrels of recoverable oil.

The company said in June that a site visit revealed its Alameda and Zapato well sites were encouraging, accessible and on pace for drilling during the first half of next year. CEO Peter Stickland said that, with each new success, the focus on Cuba was becoming stronger.

"The focus on Cuba is leading Melbana to reconsider the best way forward with the other quality assets in its portfolio," he said in a statement. "As such Melbana is considering all alternatives for its highly prospective permits in Australia and New Zealand that would enable the company the flexibility to focus more on Cuba while retaining exposure to the upside of its non-Cuban projects for Melbana's shareholders."

The company estimated its drilling campaign for 2018 would cost about $30 million at the high end and it was now in the process of a detailed contractor evaluation. It had about $2.7 million in cash on hand as of March 31.

In New Zealand, the company said in a separate statement that drilling operations were delayed by the operator, TAG Oil, in order to complete access roads and drilling pads for the Pukatea-1 exploration well. Melbana said Pukatea has the potential to be a low-cost, highly-productive asset with an estimated 12.4 million barrels of oil equivalents in prospective reserves.

The company last week said a partner working offshore Australia exercised its option to acquire a greater stake in the relevant exploration permits.

"Melbana looks forward to keeping the market informed as it progresses Cuba and its other projects," Stickland said.

The company has personnel on the ground in Cuba working to engage consultant firms there on the future potential.