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Melbana Energy finalises long-term contract for Santa Cruz oil field production sharing

The contract will provide Melbana an accelerated path to potentially becoming an oil producer.
Melbana Energy finalises long-term contract for Santa Cruz oil field production sharing
The Santa Cruz oil field is about 45 kilometres from Havana

Melbana Energy Ltd (ASX:MAY) has finalised a binding contract with CubaPetroleo that provides Melbana a long-term right to share in any enhanced production from the Santa Cruz oil field.

The contract comes after Melbana completed an initial assessment which yielded several promising opportunities to enhance production from the area.

Melbana had previously secured exclusive rights to conduct the assessment and also to negotiate the binding incremental oil recovery (IOR) production sharing contract from CubaPetroleo, the national oil company of Cuba.

 

Melbana chief executive officer Robert Zammit said securing the Santa Cruz IOR opportunity was a key plank in the company’s strategy to become a producer in the near-term.

“I am pleased that we have identified potential opportunities to enhance production at Santa Cruz and that we have had CubaPetroleo’s support to complete our commercial negotiations promptly and lock in the opportunity.

“Our ability to identify the enhanced oil opportunities in Santa Cruz was greatly accelerated given our learnings from Block 9.

“During our marketing activities for Block 9, we noted strong investor and industry interest for Santa Cruz, given its size and existing production.

“In due course, Melbana will likely seek to fund the field work required to increase oil production from Santa Cruz at the asset level.”

READ: Melbana Energy signs farmout deal with Chinese firm for its Cuban oil asset

The Santa Cruz IOR production sharing contract is split into multiple phases, with an initial study period of desk-based technical work followed by an implementation phase.

The initial study period will last a maximum of 8 months at which point Melbana may elect to proceed to the next implementation phase.

This will include a minimum program of two side-track wells from existing well bores to new geological targets.

To accelerate the oil production enhancing opportunities Melbana has engaged a Canadian consultant with extensive Cuban IOR experience to identify possibly debottlenecking opportunities.

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Melbana Energy Ltd Timeline

Newswire
August 17 2016

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