Melbana Energy Announces Significant Oil Reservoir at Alameda-1

Melbana Energy Limited (ASX: MAY) announced today a significant oil reservoir at Alameda-1 Block 9, onshore Cuba. This is in addition to the earlier news release of interpreted net pay in the shallower Amistad structure.

Once drilling is finished at Alameda-1 in approximately two weeks, the company will further understand the characteristics of the discovery.

Highlights of the Melbana Energy press release:

• Approximately 100 mMD (88 mTVD)1 of net hydrocarbon pay in aggregate interpreted on logs across a gross reservoir interval of approximately 560 mMD (495 mTVD) in the N Structure
• Logging shows extensive natural fracturing, an important production characteristic for a limestone reservoir of this type and one that could lead to an upgrade of the net pay estimate as the characteristics of the reservoir become better understood – High down hole pressures encountered lend confidence to reservoir being adequately charged to support unassisted oil recovery
• Results of flow testing (expected to begin about mid-March) an important data point for determining the reservoir’s production characteristics.
• Drilling of the remaining and largest primary target, the Alameda structure, is on track to begin by week’s end. The following factors raise expectations for the commercial recovery of the oil encountered in the N Structure to date:

1. Alameda-1 is on trend with the nearby Varadero oil field, reported to contain 11 billion barrels of oil in place and responsible for tens of million of barrels of oil production since its discovery in the 1970s;
2. biostratigraphic analysis of samples taken in the N interval indicate a reservoir of similar age to the most productive sections of the Varadero field;
3. 1 mMD = metres, measure depth mTVD = metres, true vertical depth
4. formation pressures encountered whilst drilling the N interval are significantly higher than that which exists in Varadero; and,
5. logs of the N interval have revealed pervasive natural fracturing, an important characteristic in carbonate reservoirs for assisting the natural flow of oil into the well bore. As an example, Figure 1 shows a resistivity image of the well bore (generated by the FMI logging) covering a small but representative part of the prospective N objective which demonstrates the presence of conductive fractures.

Preparations continue to flow test sections of this reservoir interval immediately following the drilling and logging of the remaining deeper Alameda primary objective (which may also be part of the testing program, depending on what the drill-bit encounters there). Field operations have now successfully installed the packers isolating the zones of the N Structure that will be flow tested and drilling ahead through the cement plug is expected to take place by week’s end, subject to satisfactory results from pressure testing the liner top.

Melbana Energy’s Executive Chairman, Andrew Purcell, commented on the Company’s news:

“The N Structure is significantly larger, and is interpreted to have more net pay, than what we initially prognosed and with many of the characteristics one would expect to see in a productive reservoir. We now need to flow test this section in the next few weeks to get more data on how to optimally produce from this reservoir, which we are looking forward to doing once total depth has been called on the drilling of the Alameda structure – the largest target of this first well—which our team is expected to commence drilling in the next few days.”

“Encountering an interval as significant as the one we’ve found in the N Structure, particularly well down dip from the top of the structure, is very encouraging with respect to the resource potential of what we might have found here. An updated resource assessment will be undertaken and released once the current operations, including testing, are completed.”

The Block 9 PSC covers 2,344 km² of the north coast of Cuba, in a proven hydrocarbon system in proximity to the multi-billion barrel Varadero oil field. McDaniel & Associates Consultants, an independent Expert estimated the Block 9 Oil in Place at 15.7 billion barrels with a prospective resource of 676 million barrels (best estimates).

Melbana Energy, (formerly) known as MEO Australia Limited, is an early mover in the Cuban oil and gas sector. In September 2015, the Company pre-qualified as an onshore and shallow water operator with 100% participating interest in Block 9 after the signing of a PSC with Unión Cuba-Petróleo (CUPET), the national oil company.

CUPET manages oil and gas operations (upstream and downstream) in Cuba and establishes partnerships with foreign companies.

In May 2020, Melbana transferred 70% interest in Block 9 to Sonangol (Angola) in exchange for funding 85% of the two wells. Melbana, as Operator, has a 30% interest in the 236 million barrels of prospective resources in the drilling program. Drilling at the Alameda-1 site began in September 2021. It would explore four separate targets with a combined 235 million barrels of prospective resource.

Melbana requested a trading halt of securities until the commencement of normal trading on February 25, pending the release of an announcement to the market.