Cuban oil work moves toward exploration phase

Oct. 11 (UPI) -- Geological surveys of an inland oil basin in Cuba are completed and work will now continue toward exploration drilling, an Australian energy company 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. The company said it completed a work program for its Block 9 basin in Cuba, which involved geological surveys of the area, and was ready to move on to an exploratory phase.

"Melbana is pleased to provide formal notification to the Cuban regulator of our ongoing commitment to Block 9 based on its world-class exploration potential and we are well placed having already commenced preparatory engineering, permitting, and procurement activities to support the work program and our ambition to drill up to two exploration wells in Block 9 commencing mid 2018," CEO Peter Stickland said in a statement.

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. By August, the company already had local contractors working with its personnel to get a proposed well location ready for future operations.

A drilling campaign set for next year could cost the company about $30 million at the high end and an effort by Melbana to generate capital this year fell short of its goal. Cost obligations moved lower in August, 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 in early September before turning north for its run up Florida's western coast. Melbana gave no indication that its license areas on the northern shores of Cuba were damaged by the storm.