In addition to the placement and to enable all Melbana shareholders to participate, the company is undertaking a 1 for 2 pro-rata entitlement offer of shares to raise up to circa $4.8 million.
Proceeds from the capital raising will allow Melbana to undertake the necessary initial preparations for the planned Cuba drilling program in 2018 at its fully-owned Block 9 PSC (production sharing contract).
Cuba block 9 PSC has an exploration potential of circa 12.5 billion barrels of oil-in-place with recoverable prospective resources of 637 million barrels of oil.
The two highest priority drill targets, Alameda-1 and Zapato, have a combined exploration potential of 200 million barrels.
Significantly, Alameda-1 alone presents an opportunity to drill three objectives with a combined exploration potential of over 2.5 billion barrels oil-in-place and 130 million barrels of recoverable oil.
The work Melbana has undertaken on its Cuba onshore Block 9 PSC during the past 18 months has demonstrated that it is a world class exploration opportunity with enormous exploration potential.
Given this potential, the company is aiming to drill up to two wells in Cuba in mid-2018 within the current highest priority prospects, Alameda-1 and Zapata.
However, there is a significant amount of preparatory work that needs to occur to get Melbana into a position to drill and the funds raised from the capital raising will be primarily used for this purpose.