3 Melbana Energy Limited Annual Report 2022 During the second quarter of the reporting period, Melbana also completed the sale of its permit WA-488-P to the Australian subsidiary of a US oil company which is entering Australia to drill the exciting Beehive prospect contained in that permit area. Your Company received an initial payment of US$7.5 million in consideration for the sale and is entitled to further payments totalling US$5.0million, subject to the purchaser making certain future elections with respect to the permit. In addition, we are entitled to receive a payment of US$10million for each 25 million barrels of oil (or equivalent) that may be produced and sold from this permit area. The Beehive prospect has been independently assessed to possibly contain a Prospective Resource of as much as 1.4 billion barrels of oil equivalent2, so a successful exploration well there could be very material for your Company. We have no exposure to the cost of the drilling of this well, which is required to occur before August 2023. The identification then technical support for the validity of the Beehive exploration thesis is testament to the quality of our geoscientists, who identified and championed this new play type in Australia for many years and were rewarded for their perseverance and vision by having a large international player make a country entry to drill it. In a similar vein, we were awarded the AC/P70 permit located offshore north-western Australia during the third quarter of the reporting period. This is a valuable addition to our portfolio of exploration permits, given it contains the undeveloped Vesta-1 oil discovery that was subsequently appraised to contain a gas cap. The complex nature of the project gives a technically competent junior explorer like Melbana the opportunity to identify new play types, then use its track record to attract large, well-funded, partners to test its exploration theses. I must also make special mention of the efforts of our people, both in Australia and Cuba, whose commitment to our drilling operations in Cuba have been instrumental to the success we have had there. We have a lot of highquality staff, for whom the many technical and operational challenges found in any drilling operation (often in the middle of the night for one side of the world or the other) – are dealt with calmly and professionally until the best possible outcome is achieved. Finally, I wish to thank my fellow directors for their constant availability for advice. Their experience and perspective is always greatly appreciated, particularly whenever we get too close to an issue and become in danger of losing sight of the wood for the trees. I am proud of the teamwe have built and look forward to building on the experience gained by the group to commercialise the incredible opportunity we have demonstrated to exist in Cuba for the benefit of all of our stakeholders. Andrew Purcell Chairman 10Oct 2022 2 100% unrisked high estimate independent assessment by McDaniel & Associates
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