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Predominantly Cuban-based oil and gas explorer Melbana Energy (ASX:MAY) has boosted its estimates for oil and gas reserves at its separate digs offshore northwestern Australia on the back of geophys analyses, with the company now reporting up to 2.8Bcf of gas and up to 78MMbbl of oil.
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Shareholder reaction, however, has been muted.
While the company has been a long time coming to production of oil from its project in Cuba, from where oil sales it shares with the Cuban government are now underway – buyers not yet known – it could be the case that with the company pivoting its interest to Australia, investors may feel they’re looking at another long path to revenues.
The company first began focusing (more) on its Western Australia assets earlier this year. That may be because the company’s efforts to kick off a producing oil project in Cuba (which has long interested this finance journalist and others when it comes to how an Australian company ends up there at all) appear to have been, all in all, not as promising as many shareholders, at one time, thought.
Melbana was at one time a bonafide HotCopper darling with a lot of liquidity, volume, and chatter. But years of delays and continuous problems with hardware on-site marred that progress; so too endless raisings, which now sees MAY with over 3B SOI.
There’s also the fact it may have been cursed by bad timing: As it now finally begins producing oil (alongside a Cuban gov’t buckling under U.S. sanctions), Cuban citizens are leaving the country in droves; blackouts remain an issue as old energy infrastructure ages out and then you’ve got the fact the company is, despite being picturesque, technically a dictatorship with a heavily controlled press.
For its WA operations – which would also be far more expensive than those in Cuba – MAY is hopeful for a farmout partner. Make of that what you will.
MAY last traded at 1.7cps.
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