Energy

Melbana Energy on downhill run towards Cuban onshore oil target

Wed 29 Jun 22, 12:06pm (AEST)
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Key Points

  • Melbana Energy has 1000m left on its Cuban onshore oil well, Zapato-1
  • Company is seeking to identify the source of the historic Motembo oil field
  • Despite recent sell-offs since March, the company’s YTD performance is up 245%

Melbana Energy (ASX:MAY) has today announced the Zapato-1 oil exploration well oshore Cuba is over halfway towards target.

Downhole drilling has hit 1,600m, leaving 1000m left before it hits the Zapato structure, believed to contain high volumes of crude. 

Zapato is nearby Cuba’s historic Motembo oil field, Melbana’s geos are optimistic the structure is the source of hydrocarbons underpinning Motembo’s previous success. 

The company holds a 30% in the project, located in Cuba’s Block 9, with a best prospective resource estimate of 95m barrels of oil (MMbbl).

Technical difficulties no big problem for Melbana 

The company’s time in Cuba has been marked by an evolving drilling strategy marked at times by frustration. 

A number of hard rock formations underground have previously complicated drilling activities for the company. 

Company management today notes the company was expecting a slow run on Zapato-1, with those predictions proving true. 

Not going anywhere 

Drilling at Zapato-1 launched late last month, before which Melbana built a workers camp at the Block 9 acreage. 

Late May saw Melbana host a series of meetings in Havana with its operating partner. 

A number of permit acquisitions are on the cards which it needs to appraise three newly logged target areas.

Those targets are held by Melbana with a 100% share and are attached to a prospective resource of 119MMbbl. 

Melbana a quiet winner of the energy rally

Despite sell-offs, Melbana is having a fairly good year. 

In February, the price raised from 2.1c to 17.5c in March. 

The company has since receded to 7.6c today, however, performance indicators continue to attract investor interest. 

Year to date performance is up 245% and year-on-year performance is at 249% - compared to the ASX 200 on a one-year basis, it’s up 257%.

Melbana's six month charts show the dramatic movement in activity triggered in February. Performance compared to the ASX200 index (XJO)
Melbana's six month charts show the dramatic movement in activity triggered in February. Performance compared to the ASX200 index (XJO)

 

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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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