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Melbana Energy raising up to $6.6 million for oil drilling program in Cuba

Cuba block 9 PSC is a world class exploration opportunity.
Funds raised from the capital raising will be primarily used for preparatory work

Melbana Energy Ltd (ASX:MAY) is getting ready to drill for oil in Cuba after accepting commitments from investors to raise up to circa $1.8 million via a placement of shares, at $0.01 each.

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).

READ: Melbana Energy eyes world-class oil exploration block in Cuba

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.

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Melbana Energy Ltd Timeline

August 17 2016

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