Melbana Energy Limited Annual Report 2022

2 Melbana Energy Limited Annual Report 2022 Chairman’s Letter Andrew Purcell | Chairman “ I am pleased to present to you the 2022 Annual Report for Melbana Energy. By any measure it has been an exciting and successful year for your Company.” The two-well exploration program that we commenced in our Block 9 contract area of onshore Cuba in the first quarter of the reporting period quickly validated our exploration thesis when the first well, Alameda-1, encountered an extensive interval of oil shows less than two weeks after drilling commenced. This became a recurring theme with numerous extensive intervals of highly pressured moveable hydrocarbons encountered in several geologically independent sections. These intercepts were later independently estimated to represent a total volume of 6.4 billion barrels of oil in place with a Prospective Resource of 362 million barrels of oil1. It marked an extraordinary and welcome result from one exploration well and forces us to rethink our original estimate of 14.8 billion barrels of oil in place in Block 9 as a whole. The other interesting feature of the oil encountered during the drilling of Alameda-1 was how highly pressured the reservoirs could be. This is desirable, of course, as it is often correlated with good reservoir production characteristics, but the extent of the pressures Alameda-1 encountered in certain sections was considerably higher than what was prognosed from data available from prior offset wells. This presented the drilling teamwith challenges that they were commendably and safely able to overcome, but the result was that our opportunistic desire to repurpose our exploration well to conduct quality and flow tests on the reservoirs encountered proved unviable. As such, we are looking forward to returning to the Alameda-1 pad to commence appraisal work, using amended well designs appropriate to the conditions we now know exist there. Following the completion of Alameda-1, we transferred the rig and supporting services to the next well pad to commence drilling the Zapato-1 exploration well in the fourth quarter of the reporting period. This well is aiming to test an expected carbonate structure below volcanics, independently estimated to contain 114 million barrels of Prospective Resource1. Your Company’s future in Cuba has been assured for at least the medium term – as evidenced by the amount of future work required to appraise and then (if warranted) produce the oil encountered during the drilling of the Alameda-1 well. Your Company is well positioned and financed to undertake this work, particularly given the expertise of our partner – the national oil company of Angola – whose financial support and technical advice has been of paramount importance to our achieving the results we have to date in Cuba. We similarly appreciate the counsel and support of the national oil company of Cuba, CUPET, who on numerous occasions acts more like a partner than a regulator in helping us to meet our goals. 1 100% unrisked mean estimate independent assessment by McDaniels & Associates