The first of two appraisal wells (designated Alameda-2), the objective of which was to test the shallowest (Amistad) of the three oil bearing formations encountered by Alameda-1, commenced drilling shortly before the end of the reporting period. Cuba - Santa Cruz (Melbana 100%, subject to receiving final regulatory approvals) No material progress was made during the reporting period towards the receipt of final regulatory approval for the binding contract Melbana has entered into for the Santa Cruz oil field given the activities occurring in Block 9. The Santa Cruz oil field has produced at least 7.4 million barrels from 18 wells since its discovery in 2004. The Company notes that Cuba is subject to various sanctions imposed on it unilaterally by the United States of America (US). Although these sanctions are intended to only apply to US citizens and corporations, their indirect scope is effectively larger thereby requiring the Company to allow for their impact on operations in Cuba. Australian Operations WA-488-P (Melbana contingent cash and royalty interest) The Company sold its 100% interest in permit area WA-488-P to the Australian subsidiary of US oil major EOG Resources, Inc. in November 2021. The purchaser is making a country entry to drill the giant Beehive Prospect located within the permit area. The Company has no exposure to the cost of this exploration well. Figure 3 – The location of WA-488-P relative to the Company’s other licence areas in the Joseph Bonaparte Gulf The Beehive Prospect was independently estimated to contain a Prospective Resource1 of 388 million barrels of oil equivalent (Best Estimate, 100% basis)2 and a high estimate of 1.6 billion boe. Melbana revised these estimates3 to a Prospective Resource1 of 416 million boe (Best Estimate, 100% basis) with a high estimate of 1.4 billion boe following its assessment of the 3D seismic data acquired across the prospect in 20184. The timing of the exploration well into the Beehive Prospect is subject to receipt of the necessary permits. The purchaser has indicated that it expects the drilling program to be undertaken between January 2024 and December 2025. Under the terms of the sale and purchase agreement, the Company is entitled to receive contingent future payments of USD5.0 million (subject to the purchaser making certain future elections with regards to the permit) and USD10.0 million for each 25 million barrels of oil equivalent in the event oil is produced from the permit area should the exploration well be a commercial success. Directors’ Report continued 2 See ASX announcement dated 7 August 2018 3 See ASX announcement dated 24 August 2020 4 See ASX announcement dated 14 August 2018 14 Melbana Energy Limited Annual Report 2023
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