Melbana Energy Limited has advised that the Cuba Block 9 Production Sharing Contract (Block 9 PSC) farminee Anhui Modestinner Energy Co., Ltd. (AMEC), a wholly owned and guaranteed subsidiary of Anhui Guangda Mining Investment Co. Ltd. (AGMI), has not satisfied the Conditions Precedent in the Farmout Agreement within the time allocated.
As a result of AMEC’s failure to satisfy the Conditions Precedent within the required timelines, Melbana has terminated the Farmout Agreement to enable it to progress discussions with other potential farminees interested in gaining exposure to the company’s portfolio of exploration and development opportunities in Cuba.
Melbana has indicated to AGMI that they would welcome the opportunity to re-examine a partnership with them in Cuba in the future if the circumstances that precluded them from satisfying the Conditions Precedent change, given their experience drilling and operating oilfields.
With respect to the Block 9 guarantee obligation, CubaPetroleo has previously provided a waiver of the obligation until 30 April 2019. A further extension of the waiver has been sought from CubaPetroleo.
Melbana Energy’s CEO, Robert Zammit said Melbana elected to terminate the Farm-in Agreement as there was insufficient progress in the required timeframe and that they wished to progress discussions with other parties that were previously interested in partnering with them as well as some new parties.
“We remain open to working with AGMI again in the future should their circumstances change,” Mr Zammit detailed.
“We are maintaining an ongoing dialogue with CubaPetroleo to seek to find a mutually acceptable way forward for Block 9 that will allow us to test the significant potential of this block.”
Block 9 PSC covers 2,380 square kilometres onshore on the north coast of Cuba, 140 kilometres east of Havana in a proven hydrocarbon system and along trend with the multi-billion barrel Varadero oil field.
In June 2018, independent expert, McDaniel & Associates Consultants estimated Block 9 Oil in Place as approximately 15.7 billion barrels (best estimate) with recoverable prospective resource of 718 million barrels (best estimate).