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Melbana Energy (ASX:MAY) – long suffering mishap after mishap at its oil acreage in the exotic jurisdiction of Cuba – is soon to become an oil producer, according to its announcement on Wednesday.
Shares in Melbana were up +47% to 2.8cps in late morning trades on Wednesday.
The news comes on the back of an approval for development at Melbana’s well-known ‘Block 9’ area of interest from the Cuban government. The development of the Unit 1B wellpad allowing production is on track for Q1 of CY2025 – where works typically begin ‘towards the end of November’ coinciding with a wind-down of the wet season.
The first initial oil cargo export is set to leave in late 2024.
Melbana noted on Wednesday “oil trucks [and] tankers have arrived in country” and that all export approvals are on Melbana’s desk. As for offtake, terms are being finalised with “an international oil trader” – who, exactly, isn’t yet known.
(One of the most interesting aspects of Melbana’s storied history in Cuba is who, exactly, the company will end up selling to. It’s Cuba, after all. A US partner is unlikely.)
“It’s been a busy few months getting everything organised to meet our goal of exporting our first trial cargo of oil by the end of this year,” Melbana exec Chair Andrew Purcell said.
“Production from the existing completion in Unit 1B from the Alameda-2 well was recently brought back online to further refine our logistics, storage and processing arrangements as well as to build some more inventory.”
Melbana expects to return the well to an initial production rate of 1,235 barrels of oil per day. The plans for two additional production wells have also been approved by Cuban regulators, Purcell added.
HotCopper users – an investing community which has been in aggregate closely watching Melbana for years now – were nearly uniformly pleased.
“[Melbana] was clearly oversold,” user Cummins6 wrote, before turning to the kind of robust but jocular infighting the forums are celebrated for.
User Ratdog1031 put forward their views “the non-believers are buying back in again,” which is maybe unfair on rational investors who erred on the side of caution with regards to an Australian oil explorer based in Cuba well-known to have experienced geotechnical issues.
At any rate – the thread clearly reflects at least one community risk-on and bullish for what comes next.
MAY last traded at 2.8cps.
