Page 20 - LatAmOil Week 39

LatAmOil NEWS IN BRIEF LatAmOil

Melbana’s first well, Alameda-1, is positioned place in Cuba (and in other relevant countries) $2.56mn (June 30, 2019: $4,407mn), with no
close to where these previous wells were drilled so this is not expected to have a material impact debt.
in order to test a number of the structures iden- on the forecast timing of deliveries. “Tough economic conditions have prevailed
tified by its analysis of the seismic and grav- Melbana Energy’s Executive Chairman, throughout the first part of the year, and in
itational data as the possible source of these Andrew Purcell, said: “We are pleased to have response to this we have made additional cut-
hydrocarbons. commenced field works as it puts us firmly on backs to the 2020 budget. The Company has
The targets of Melbana’s Alameda-1 well have the path to testing the exciting potential that always maintained a low overhead, outsourcing
been independently assessed to have a total Pro- Block 9 offers our shareholders. We are deeply many of its non-core disciplines. But further
spective Resource of 141mn barrels of oil (Best engaged in planning and preparations and will savings have been made, including staff salaries.
Estimate). continue to update the market as significant Executive directors have taken a 50% reduction
The second well Melbana proposes to drill is milestones are passed. Cuba has a prolific hydro- in salary since 2019. Our objective has been to
Zapato-1. Its objective is the source of the his- carbon zone and we have invested considerable preserve cash during this industry downturn.
toric Motembo oil field – Cuba’s oldest oil field time and money into better understand the “The low oil price, currently around $40 per
that reportedly contained a very light oil (50-64.5 opportunity offered by Block 9. Success would barrel, has resulted in a dramatic fall in explora-
degrees API) present at surface. be transformative for our company, almost tion and appraisal activity within the industry,
The structure Melbana is targeting with Zap- regardless of the oil price given Cuba’s histori- along with a decrease in capital expenditure
ato-1 was identified by studying pre-existing cally low cost of production, and development on new developments. In this setting we have
gravity and magnetic data sets along with the of any discovery would be greatly simplified by continued our farm-out pursuit. Our endeav-
results of a gravity and magnetic study Melbana proximate access to good and existing oil sector ours have been far reaching, not only having
commissioned over the Zapato prospect. These infrastructure.” discussions with other oil companies, but also
data indicated a strong gravity and magnetic Melbana Energy, September 25 2020 exploring potential collaborations with service
alignment with a structural interpretation made and engineering companies. We continue to
by Melbana’s technical team derived from seis- investigate all options.
mic and surface data. PERFORMANCE “Undoubtedly, within the current climate we
Our assessment is that the large Zapato struc- face a significant challenge, like so many com-
ture (with nearly 1,000 metres of vertical relief) Falklands: Borders & panies our size. This year, our industry has faced
may be the primary structure, and thus the an oil supply surplus coupled with a decrease in
source of oil, for the shallow Motembo oil field Southern announces demand due to the COVID-19 global pandemic,
discovered in the late 19th Century. There are no at a time when the world is starting to transition
previous wells that have drilled deep enough to unaudited results towards renewable energy. Many commentators
intercept the Zapato structure. believe that hydrocarbons will continue to play
Zapato-1 has been independently assessed to AIM-listed Borders & Southern Petroleum has a very important role during the transition, but
have a total Prospective Resource of 95mn bar- announced its unaudited interim financial state- we will potentially see a high-grading of new
rels of oil (Best Estimate). ments for the six months to June 30, 2020. The developments, based on quality of reservoir,
Together, Melbana’s two exploration wells accounts contained within this report represent break-even oil price and environmental foot-
in Block 9 will test four separate targets with a the consolidation of Borders & Southern Petro- print. We believe that Darwin stands out on this
total Prospective Resource of 236mn barrels of leum and its subsidiary, Borders & Southern basis, with its break-even oil price of less than
oil (Best Estimate). Falkland Islands. $35 per barrel, quick payback, excellent reservoir
Site Preparations: The drilling locations for CEO’s Statement: “The Company reports and a relatively small environmental footprint.
both wells are in flat, open country with nearby a loss from operations of $579,000 for the six- We therefore remain optimistic that progress
access to good, all-weather roads. month period ending June 30, 2020. This com- towards appraisal and development will be
An independent Cuban consultant is cur- pares to $820,000 for the corresponding period achieved.”
rently making a written and photographic last year. The cash balance at June 30, 2020 was Borders & Southern, September 24 2020
record of the condition of the well sites, which
Melbana has voluntarily commissioned in addi-
tion to the baseline environment study another
independent consultant previously completed as
part of the permitting process. Civils contractors
are currently on site preparing an area for the
installation of camp facilities, following which
surveyors are due to arrive on site to peg out the
location of the well pads and establish other data
points of interest to the construction crew.
Project Timeline: An estimate of the pro-
jected workflow will be provided once contracts
have been signed with the drilling contractor and
the supplier of the casings, etc. needed for this
drilling programme, the latter being the long-
est lead item and therefore on the critical path.
Indicatively, though, shipments of supplies and
equipment to Cuba are reasonably unaffected
by COVID management protocols currently in

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