Melbana Energy Limited (ASX:MAY) Executive Chairman Andrew Purcell provides an overview of the company and its projects.
Thanks very much, Clive, good to be here today. We put together a short presentation to give you an overview of the company and its projects, but there will be a focus on what's happening in Cuba, or that's getting to be interesting point for a lot of our shareholders.
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There's a disclaimer, which I should also take as read. Company overview, we've been around over 20 years listed on the Australian Securities Exchange. The team has been in a number of important roles in oil and gas companies from ExxonMobil, BP, and has got particular expertise and types of geology that allows us to look for opportunities and identify them early, prove them up, and then look to bring in larger partners to help us prosecute the exploration thesis. Our business is heavily invested in by the board and management, as we have great faith in our ability and in the projects that we have.
And I think leaving aside the rather shocking share price performance of many companies back in about March this year, the run up in the share price since then is probably a bit of recovery from what was an overreaction in hindsight. But also reflects the fact that what we have just ahead of us now, some very interesting drilling opportunities that should be the test of what are some world-class projects.
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We have projects in a number of places, as Clive mentioned we are in Cuba, and have indirect interests in the Gulf of Mexico as well. But in Australia, we have some off shore projects near in offshore Northern Territory, Western Australia. These projects are all at different stages of development and permitting. They're all exploration at this stage. And as the Cuban project, which is the one that has taken us a long time, to get to the point of testing, but which really provides an extraordinary opportunity for our shareholders.
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Cuba's the one that is takes a lot of people by surprise, when we talk about it, but it's in the Gulf of Mexico. It's a prolific hydrocarbon zone in the Gulf of Mexico. And Cuba has had some interesting, unique political problems shall we say, over the past decades, which has made the development of its indigenous oil and gas reserves more complicated. Apart from those economic constraints, it has a very well-established oil industry. It produces over 45,000 million barrels a day. It has good laws, it has good infrastructure. It has educated people. It has competitive fiscal terms for people wishing to operate there.
And the ability for a company like us, to have acquired the acreages that we have, really wouldn't exist, but for the trade embargoes and complications that I mentioned earlier.
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And I'll give you a little bit more of an overview of what really Cuba is. On the left-hand side of that upper diagram you can see the City of Havana, the capital of Cuba. Note along that Northern coastline, there are many developed and discovered oil and gas fields. The Varadero field on the right side of that upper diagram is estimated to have over 11 billion barrels of oil in place. It's a large field by anybody's measure. And this is speaking to the prolificacy that I mentioned earlier.
And on the bottom diagram, you can see in the white box, our area just to the East of that, of that oil zone, that's in the upper diagram, but the discovered oil fields extend all the way through our block nine all the way down the middle of the island. As you can see from these blue, red and yellow dots. And Sherritt International as a Canadian company, that's been operating in Cuba for over 25 years.
Well, they initially went into Cuba, they're a nickel company looking for nickel, but almost every time they put a drill bit in the ground, they'd come up with hydrocarbons on it. That statistic there, that 86% of the wells they've drilled since 92, have intercepted oil. It shows you just how prolific this place is.
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When we went into Cuba back a long time ago now, it suited our geological expertise and ranked well, in terms of other metrics we apply when looking off shore. Fiscal terms as I mentioned, a black little law, anti-corruption practices, et cetera. Cuba scored very highly on all of those things.
And there were a number of fields that were drilled and discovered oil that floated hydrocarbons to surface that were never pursued for lack of capital. The Alameda prospect. The one that I'm showing on this slide at the moment. When we took those previous well results and we overlaid it, with the seismic data that was available, number of different series, gravitational studies. Our technical team put it all together and could identify reasons why oil was discovered where it was.
And it's a great thing being able to go back in and drill next to a previous discovery, with the additional confidence of all this other data showing what the structures look like and where the well should exist. So, we've got a drilling program that begins with this Alameda prospect. It's a well that we'll go down and test three different targets on the way to the principal target, which is the Alameda one, which is the deepest one. Which on those previous results float a significantly higher quality crude than is typical in Cuba. So, we have great expectations for this well, as do a number of our shareholders, as do the Cuban themselves.
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Second well, we're going to drill, we're doing two in succession. Alameda being the first, Zapato the second, what you have in block nine on that diagram and the top left, the yellow is our acreage. Right in the middle, there's an existing oil field called them the Motembo oil field. Discovered 150 years ago, and has been there for most of that time. But when we studied the geology and looked in the area of this Motembo oil field, underneath it, there is a volcanic rock an oil field-like, which is not a source for hydrocarbons, that's underneath the opiate lights, we can see a very large carbonate structure. And that is a good opportunity to test while we're there as the source of that oil field.
Now, the other interesting thing, I mean, it's a two kilometre gate, vertical relief in that structure, these things are massive. And the oil that was recovered in the Motembo, was even lighter again, as you can see, 50 to 65 API, which is a very light crude, which is extraordinary for this part of the world.
So, these two wells together, are testing a number of different structures.
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Which are giving us an opportunity to look for 230 odd million barrels, best estimate, of oil, across four different targets at two wells testing four targets at different success estimates. But this for an onshore block for a company of our size is a massive opportunity for oil of this volume. Now that's all good in theory,
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But you have to drill these things and they're not cheap wells. So, the other thing you have to solve, as well as the technical question is, how do you fund it?
Now, our companies had a good track record over the years, bringing in partners, to pursue the theories and exploration opportunities we've defined. Cuba is no exception last year, late last year, mostly over the course of this year, we have entered into an agreement with the national oil company of Angola called Sonangol. Not a familiar name to many people in Australian markets, but Sonangol is in Angola, the second largest oil producer in Africa. So, it's a very substantial company. It also has historical ties with Cuba, which was one of the reasons we approached them initially.
So, very sophisticated firm, very well-funded firm, very familiar with oil and gas, lots of international partnerships. So knows how the oil industry should operate, and how to do things properly. But the great advantage I think apart from bringing in a partner of this calibre, is that they have asked us to remain as the operator for these two well program, which I think is a great thing for us, because not only do we get the cash to drill these wells, but we get to run them like a small company.
The one risk you have when you partner up with a national oil company as a junior, is they do things much more gold-plated. And can outspend you and do things that you wouldn't necessarily want to do. But here we're in charge, we're running the drill bit. We're running this little program that gives us a great opportunity to keep costs under control and deliver things on time.
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We started civil works now. So this is happening this year has been one of preparation, and planning, and studies, but now we've gone last month into the field with our contractors. And we're starting to improve roads, drainage, starting to create the well pad for the first drilling site Alameda. And based on what's happening and the right way we're going at the moment, then we expect we will be drilling by the end of first quarter next year.
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That then puts Cuba to one side and the most exciting thing happening for our company and our shareholders. We do have these other projects however, I will touch on briefly in the remaining time that I have. In Australia off the North Coast, we have what we call the Beehive prospect. Down on the bottom, right you see that we defined and indeed all of the numbers in this presentation are not our numbers, but they are numbers that have been independently assessed and verified by experts outside of our own company.
So here we have a 416 million of oil equivalent, prospective resource previously with Cuba, it's all we had 236 million barrels in our drilling program. There, everything we're targeting, it's all elephant hunting. And this is a very exciting project, shallow water, off shore, Northern Australia, but very close to infrastructure and existing fields. We were successful in attracting the French super major Total, and Australia's Santos into this block. And they funded a 3D acquisition that completed a couple of years ago. That was to have led to the drilling of a well about now, about this year, but it's been a funny whole year and that has not taken place. We now have 100 the center of that block.
Again, there are interested parties in the data room. This may be something very important in our future, the Cuban role next year. But at this point, which all the work has been done that needs to be done and funded. Now, it's just a matter of finding a new partner to come in and help us drill that well.
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Similarly, off the North Coast of Australia, we have a project that's quite dear to our hearts, but one that's taken a while to grasp you on the spot where it got to a few years ago. And that there are a number of discovered gas fields off the North Coast Australia, that haven't been developed. And a lot of them have been vying for the opportunity to be developed, to fill the LNG plant in Darwin. It is a facility that has traditionally been supplied by a gas field called, Bayu-Undan, which is probably running dry as is forecast and a couple of years.
So a number of these gas fields have been looking to be selected to replace Bayu-Undan. In the last year Santos who's a major shareholder in the LNG plants and also in a number of these gas fields as selected the Barossa fields to go into feed, to look at supplying the LNG plants. So, these remaining gas fields, are now looking for a commercial development solution. We have a commercial development solution, our Tassie Shoal Methanol Plant, an LNG plant, our engineering designs that are not floating platforms. They are platforms built on to an offshore Shoal the Tassie Shoal near to these gas fields, which can take the high CO2 gas from these fields, and turn it into methanol. A very important, industrial feedstock.
Our investment in Metgasco has an indirect interest for us in a project in the Queensland Cooper/Eromanga Basin. They are a 25% participant with Bridgeport Energy and Vintage Energy in a gas discovery made there earlier in the year. We understand that that is going through commercial appraisal and reserve certification, and is an indirect interest that our shareholders can enjoy, were that to be commercially successful. Otherwise, they have in the Perth Basin a commitment to participate in the drilling of some wells down there to earn an interest in the Cervantes prospect. That was projected to happen in the first half of 2021.
That is all we have for you today as a summary of the projects of Melbana Energy and our interests. Thank you very much for your time and your interest in our company. If you need any further information or would like to discuss anything that has been presented here today, please don’t hesitate to contact me at the details provided on the slide before you.