MELBOURNE, Sept. 12 (UPI) -- Selling off parts of its holdings in a potentially lucrative basin off the coast of Australia will help fund opportunities in Cuba, MEO Australia said.
Billing it as one of the largest hydrocarbon opportunities offshore Australia, the company said it was looking for financiers to help fund later drilling planned for its Beehive prospect. MEO said it's had four expressions of interest from companies looking at technical data for the basins and was looking to close out on any deal by the end of October.
Managing Director and CEO Peter Stickland said in a statement the deal was at least partially aimed at funding developments in Cuba.
"Doing so would not only secure an exciting drilling opportunity for MEO shareholders, but enable MEO to focus its resources on its Cuba opportunities where it is the only Australian-listed company with exposure to the Cuban oil and gas industry," he said.
Strickland said Cuba is the company's highest priority assets, drilling a number of wells already in so-called Block 9. Some have recovered oil and the company said it was highly optimistic because of the low operating costs and potential for strong profitability levels offshore Cuba.
Estimates from the U.S. Geological Survey last year found there were about 4.6 billion barrels of crude oil and 9.8 trillion cubic feet of natural gas in the form of undiscovered, technically recoverable, reserves in Cuba.
According to MEO, Cuba produces about 80,000 barrels of oil per day. Canada's Sherritt International, the only foreign company producing in Cuba, estimates operating costs of around $9 per barrel.
The Cuban government in 2014 enacted legislation offering corporate tax credits to encourage foreign investments. The U.S. government the same year started easing a 54-year trade embargo on Cuba and later reopened its embassy in Havana.