Although no uncontaminated oil samples were obtained in either the Marti or Alameda reservoirs, oil samples were recovered on reverse circulation of the DST string in the Marti reservoir and were analysed to have API of 19° with 2.3% sulphur. The inability of the well to flow did not fit with previous observations and expectations; wireline and FMI over both intervals indicated substantial fracturing in the Marti reservoir interval and good quality conventional (i.e. not fracture dependent) pay in the Alameda reservoir interval. The well was suspended, the DST string removed and pressure gauges extracted with the rig demobilised from site to reduce costs. The Company continues to study these results and all available data and analogous wells, including the Company’s Alameda-2 well, which could contribute to a potential future well workover plan if the issue is considered most likely due to a treatable reservoir formation damage mechanism. International and local expert knowledge is being drawn upon to analyse samples and data, and to ensure critical lessons learned are captured for incorporation in future activities. 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 a US oil major in November 2021. The purchaser became the Operator and made a country entry to drill the giant Beehive Prospect located within the WA-488-P exploration permit. The Beehive Prospect was independently estimated to contain a Prospective Resource12 of 388 million barrels of oil equivalent (boe) (Best Estimate, 100% basis)13 and a high estimate of 1.6 billion boe. Melbana revised these estimates14 to a Prospective Resource12 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 201815. 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. Beehive received environmental approval for its drilling program during the period and the new Operator has a permit to drill within the next 12-18 months, subject to rig availability. The Company has no exposure to the cost of this exploration well. Beehive will test a large Carbonate Platform Prospect similar to that defined by the Company in the adjacent exploration permits NT/P87 and WA-544-P. 12 This estimate should be read with reference to the footnote “Notes regarding Contingent and Prospective resource estimates” on page 36. 13 See ASX announcement dated 7 August 2018. 14 See ASX announcement dated 24 August 2020. 15 See ASX announcement dated 14 August 2018. 17 Melbana Energy Limited Annual Report 2024
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