Sept. 11 (UPI) -- An effort to raise up to $4.8 million to help fund drilling operations at a reservoir in Cuba fell well short of its goal, Melbana Energy Ltd. said.
Melbana is one of the few Western companies, and the only one listed on Australia's stock exchange, with an established footprint in Cuba. It initiated a push last month to raise capital for its preliminary efforts and said that through the placement of shares alone, it received $1.8 million that it would use to fund drilling preparations in Cuba and cover general corporate costs.
On Monday, the company said an entitlement offer to raise $4.8 million fell short of the goal, raising $1.5 million. All told, the company said it was expecting to raise up to $6 million through placement and entitlement.
"On behalf of the board of directors, I would like to thank shareholders for their continued support in the company, as we look to progress Cuba Block 9 pre-drilling activities," Managing Director and CEO Peter Stickland said in a statement.
Melbana started the preliminary work necessary to get the proposed Alameda-1 well location ready for future operations. Up to two wells in Block 9 are anticipated for next year and the company said its Cuban portfolio contains an estimated 637 million barrels of prospective recoverable reserves.
A drilling campaign set for next year could cost the company about $30 million at the high end. To the period ending June 30, the company had about $2.7 million in cash on hand.
Melbana's cost obligations moved lower last month, however, when Petro Australis Ltd. exercised a right to move into its Cuban acreage by taking on a 40 percent participating interest in the Block 9 production sharing contract. Through the arrangement, Petrol Australis assumed 40 percent of the costs associated with future operations.
Hurricane Irma battered the north of Cuba as a Category 3 storm on Saturday before it began to turn north for its run up Florida's western coast. Melbana had no public comment on whether its license areas on the northern shores of Cuba were damaged by the storm.