Melbana Energy Limited ABN 43 066 447 952 Annual Report 2026
About Melbana Energy Melbana Energy is an Australian ASX listed, independent oil and gas company that has a portfolio of attractive exploration, appraisal and development stage opportunities in Cuba and Australia. Our mission is to create a world class E&P company by using the skills of our people to identify and successfully develop attractive oil and gas exploration and development opportunities.
02 Chairman’s Letter 04 Highlights 06 Operating Review 10 Board of Directors 12 Directors’ Report 36 Governance and Risk 45 Auditors’ Independence Declaration 46 Consolidated Statement of Profit or Loss and Other Comprehensive Income 47 Consolidated Statement of Financial Position 48 Consolidated Statement of Changes in Equity 49 Consolidated Statement of Cash Flows 50 Notes to the Consolidated Financial Statements 78 Consolidated Entity Disclosure Statement 79 Directors’ Declaration 80 Independent Auditor’s Report 85 Shareholder Information 88 Glossary of Key Terms 89 Corporate Directory Contents 01 Melbana Energy Limited Annual Report 2026
2026 was a challenging year for Melbana and its shareholders, but it was also a year in which our understanding of the Block 9 resource advanced significantly. Chairman’s Letter 02 Melbana Energy Limited Annual Report 2026
The principal achievement of the year was the advancement of our understanding of Block 9. Results from Amistad-2, together with new 2D seismic and LiDAR data, significantly improved our geological model and informed a revised view of where future drilling should be focused. While that technical progress was encouraging, the year was ultimately defined by two events outside the Company’s control: the failure of our joint operation partner to meet its funding commitments and the subsequent U.S. designation of CUPET, our contractual counterparty in Cuba. Together, these events resulted in the Block 9 project being placed on care and maintenance. Although Amistad-2 did not recover oil on flow test, the well substantially improved our understanding of the reservoir and the broader field. It intersected 169 metres of highly porous net reservoir and provided critical subsurface data that enabled us to develop a more refined geological model. Our revised interpretation suggests that the well encountered a breached forelimb structure from which hydrocarbons had migrated, explaining the absence of oil production despite excellent reservoir quality. Importantly, the low-cost seismic acquisition techniques developed by the Company proved highly effective and will play a central role in future well planning. Encouragingly, Amistad-1 again flowed oil naturally to surface when reopened, reinforcing the attractiveness of a future production well from Pad 1. Our joint operation partner’s failure to meet its funding obligations required us to demobilise personnel and equipment to preserve our remaining cash. When the partner did not cure the default within the permitted period they were deemed to have withdrawn from the joint operation, resulting in their 70% participating interest being scheduled for assignment to Melbana, subject to regulatory approval. After the reporting period ended, we received $14.5 million from our former partner. This amount was substantially less than the sum owed and was accounted for in accordance with the joint operating agreement. The balance remains an obligation of our former partner, and we intend to continue pursuing its recovery in full. In June 2026, the U.S. designated CUPET pursuant to an earlier Executive Order of the U.S. President. Neither Melbana nor any of its subsidiaries was designated. This development created immediate operational and commercial challenges for the Company. We therefore suspended direct financial, technical and administrative support relating to our contractual obligations to CUPET. Our focus since that time has been to understand the implications of the designation and identify pathways that may allow development activities to resume while remaining fully compliant with applicable laws and regulations. The Company recorded a loss for the year of $50.2 million, including an impairment charge of $35.7 million against the carrying value of Block 9 and a $10.7 million write-down of inventory. These accounting adjustments do not alter our technical assessment of the hydrocarbons discovered at Block 9 or the long-term potential of the project. Cash on hand at 30 June 2026 was $0.47 million, subsequently supplemented by the $14.5 million noted above. Although Block 9 remained our primary focus, we continued to preserve value across our Australian portfolio through a disciplined capital management approach. Our strategy remains to progress these assets through partnerships and other structures that minimise capital demands on Melbana while retaining exposure to future upside. Finally, I would like to recognise the professionalism and commitment of our employees during a year of considerable uncertainty. The circumstances we faced required difficult decisions, including a reduction in the size of our workforce. Those decisions were not taken lightly, and I remain grateful for the dedication shown by everyone who contributed to the Company during this period. I would also like to acknowledge our team in Cuba, who have navigated particularly challenging circumstances with resilience and professionalism. To our shareholders, 2026 was unquestionably disappointing. However, while circumstances beyond our control interrupted the progress of Block 9, they did not diminish the technical significance of the oil discovery we have made or the value of the knowledge gained during the year. Our priority remains to preserve and ultimately realise that value. We thank you for your continued patience and support as we work towards that objective. Andrew Purcell Executive Chairman 03 Melbana Energy Limited Annual Report 2026
04 Melbana Energy Limited Annual Report 2026 Highlights Cuba Block 9 Cuba Cuba Block 9 Production Sharing Contract (Melbana 30%; overall interest in the block is being restructured with potential to assign the remaining 70% fully to Melbana). Block 9 activity centred on Amistad-2 and preparation for Amistad-11 before the joint operation partner’s funding default and CUPET’s designation led to care and maintenance. AMISTAD-2 DEVELOPMENT WELL › Amistad-2 was spudded on 18 September 2025 from Pad 9, targeting Unit 1B up-dip of Alameda-2. › The primary target interval had been eroded; drilling continued to 2,000 metres and intersected 169 metres of highly porous net reservoir. › Flow testing confirmed high permeability but recovered no oil; the results informed the subsequent structural reinterpretation. › New 2D seismic and LiDAR supported a revised structural model and basis for future well targeting; the planned 3D survey was deferred when funding ceased. AMISTAD-1 › Amistad-1 flowed oil unassisted after being reopened, indicating reservoir recharge and supporting the proposed new production well from Pad 1. JOINT OPERATION DEFAULT AND PROPOSED ASSIGNMENT › The joint operation partner ceased funding in November 2025; Amistad-11 was deferred and personnel and equipment were demobilised. › The default cure period expired in April 2026 without remedy. › The partner was notified that it was deemed to have withdrawn and that its 70% interest is to be assigned to Melbana, subject to Cuban regulatory approval. Amounts remain owed and Melbana is pursuing recovery.
05 Melbana Energy Limited Annual Report 2026 The Australian portfolio was preserved at low cost: Melbana retains contingent interests in WA-488-P, continued farm-out marketing for WA-544-P, NT/P87 and AC/P70, and retained WA-552-P and the Tassie Shoal approvals. Australia UNITED STATES SANCTIONS AND CARE AND MAINTENANCE › On 11 June 2026, under Executive Order 14404, the United States designated CUPET, Melbana’s counterparty under the Block 9 PSC, as a Specially Designated National. › Neither Melbana nor any of its subsidiaries has been designated; however, CUPET’s designation materially constrained banking, procurement, insurance and counterparty willingness. › Direct support of the PSC was suspended pending review, Block 9 was placed on care and maintenance. Tassie Shoal Methanol LNG Projects AC/P70 WA-488-P NT/P87 WA-544-P Australia WA-552-P
Operating Review Amistad-2 did not deliver a commercial result, but the data acquired materially improved our understanding of Block 9. The immediate constraint is regulatory certainty. 06 Melbana Energy Limited Annual Report 2026
Cuba Block 9 (Melbana 30%) Block 9 lies on Cuba’s northern coast, within a proven oil province and along trend from the Varadero field. The year’s events materially constrained the Company’s ability to fund the work program and deal with its contractual counterparty. Figure 1 – Newly acquired seismic data showing the missed primary objective. AMISTAD-2 DEVELOPMENT WELL Amistad-2 was the first purpose designed development well on Block 9. It was spudded on 18 September 2025 from Pad 9, approximately 850 metres southwest of Alameda-2, to test Unit 1B about 200 metres up dip of the interval that averaged 1,235 barrels of oil per day on drill stem test in Alameda-2. The well used a simplified target trajectory, open hole completion and Melbana purpose formulated RDF reservoir drilling fluid. The pre-drill structural shape was confirmed, but the primary hanging wall target interval had been eroded and replaced with sediment. Limestone was encountered in the footwall and approximately 600 metres below prognosis. With drilling conditions remaining good, the well was extended from 1,125 metres to 2,000 metres measured depth, intercepting 169 metres of highly porous net reservoir. (See Figure 1) Well logs indicated good reservoir quality and reasonable oil saturation. Flow testing confirmed high permeability but recovered no oil. The well data informed the subsequent seismic and structural reinterpretation. SEISMIC AND STRUCTURAL REINTERPRETATION Melbana completed low cost 2D seismic and LiDAR surveys over the field. Preliminary processing indicated that the new seismic could materially improve on the legacy data used for well targeting. Integrating those surveys with Amistad-2 drilling data produced a revised structural model of greater Alameda anticlinorium. The interpretation places Amistad-2 in a breached forelimb from which hydrocarbons had migrated, explaining the absence of recovered oil despite reservoir quality and permeability. This work improves the basis for selecting future well locations but does not remove the need for further appraisal, funding and regulatory certainty. (See Figure 2) Figure 2 – New subsurface model for the upper (Amistad) sheet. The planned 2026 3D seismic program was deferred when the joint operating partner was declared to be in default. AMISTAD-1 RETURNED TO FLOW Production from Amistad-1 was paused ahead of the proposed Amistad-11 well. When reopened to relieve wellhead pressure, Amistad-1 flowed oil to surface unassisted, indicating recharge during the shut-in period and supporting the new proposed Amistad-11 production well. JOINT OPERATION DEFAULT AND PROPOSED ASSIGNMENT In November 2025, Sonangol Pesquisa e Produção S.A. (Sonangol) advised that it could not meet its Block 9 funding obligations and requested that Amistad-11 be deferred to its 2026 budget. Melbana demobilised personnel and released or stood down equipment and contractors, announcing the deferral on 5 December 2025. The failure to meet cash call obligation under approved work programs in the required timeframes, constituted a default under the Joint Operating Agreement. When the default remained unremedied in April 2026, the partner 2 Figure 1 – Newly acquired seismic data showing the missed primary objective Figure 2 – New subsurface model for the upper (Amistad) sheet 2 Figure 1 – Newly acquired seismic data showing the missed primary objective Figure 2 – New subsurface model for the upper (Amistad) sheet 07 Melbana Energy Limited Annual Report 2026
Operating Review continued was notified that it was deemed to have withdrawn and that its 70% interest is to be assigned to Melbana, subject to regulatory approval. Amounts owed remain an obligation of the former partner, and Melbana is pursuing recovery. A partial payment has since been received in September 2026 but falls significantly short of resolving the full outstanding amount. UNITED STATES SANCTIONS On 11 June 2026, following Executive Order 14404 signed on 1 May 2026, the United States designated CUPET as a Specially Designated National. CUPET is Melbana’s counterparty under the Block 9 PSC The designation generally prohibits United States persons from dealing with CUPET and creates potential secondary sanction risk for non-United States parties. Neither Melbana nor any of its subsidiaries has been designated. Australia does not maintain sanctions against Cuba, and Melbana is not a United States person. Nevertheless, the designation materially constrained the Company’s ability to operate due to increased reluctance from other nonUnited States parties to continue supporting any Cuba related activities regardless of their sanctions status. Given the designation, Melbana suspended direct financial, technical and administrative support of the PSC while it obtained advice and assessed its position. CUPET was informed. Trading in the company’s securities was halted and then voluntarily suspended while the Board sought guidance and clearer direction in relation to the sanctions. The Company’s securities resumed trading on 18 June 2026. CARE AND MAINTENANCE By year end, Block 9 was on care and maintenance. Alameda-2 was shut-in, Amistad-11 and the 3D seismic program were deferred, expatriate personnel were withdrawn, and contractor and equipment commitments were released. Site activity was limited to maintaining well integrity, securing the site crude inventory, and preserving the Company’s position under the PSC. These measures preserve the asset pending any resumption of operations. A restart would require funding, a regulatory position that permits operations, remobilisation of the team, and secure supplies of fuel and consumables. 08 Melbana Energy Limited Annual Report 2026
RESOURCES In 2024, McDaniel assessed a gross (100%) 2C Contingent Resource of 46 MMbbl with a Sub-Categorisation of Development Pending (80% Chance of Development) for Amistad Unit 1B in the Eastern part of the structure. McDaniel also assessed a gross (P50) best estimate Prospective Resource of 90MMbbl (with a Chance of Discovery of 70% if an appraisal well is drilled) for Amistad Unit 1B in the western part of the structure. McDaniel also assessed a gross (100%) P50 – Best Estimate-prospective Resource of 32 MMbbl for Amistad Unit 1A (with a Chance of Discovery of 70%) that could be similarly derisked by drilling an additional appraisal well and testing on pump in that area. The Company has retained the resource estimates for the Amistad structure as independently assessed by McDaniel in 2024. While regulatory uncertainty remains, management considers this to be a temporary factor affecting project timing rather than the resource base itself. Management continues to consider the underlying geological model sound. Trial seismic data acquired during the reporting period have informed a revised structural interpretation of Amistad. Additional seismic coverage of comparable quality is required to reassess the structure fully and determine the implication for the associated contingent and prospective resource estimates. Based on the currently available information, management considers the existing estimates to remain the Company’s best estimates of recoverable volumes, subject to revision following that reassessment. Melbana continued to advance and preserve the value of its Australian exploration portfolio while maintaining a disciplined expenditure approach. The Company retains contingent cash and royalty interests in the WA-488-P Beehive Prospect following its 2021 divestment, providing potential future upside without exposure to drilling costs. Across its wholly owned permits, Melbana focused on progressing the highly prospective WA-544-P and NT/ P87 acreage, which contains the Hudson Prospect and existing discoveries with potential access to established gas infrastructure, while seeking farm-in partners to fund future appraisal and development activities. Farm-out efforts also continued for AC/P70, which hosts substantial prospective and contingent oil and gas resources associated with the Vesta and Swan discoveries. During the year, Melbana strengthened its Australian acreage position through the grant of WA-552-P, where early-stage technical work is assessing the potential of identified leads and discoveries. In addition, the Company maintained its strategic Tassie Shoal development option, retaining longterm environmental approvals for large-scale methanol and LNG projects, although progress remains dependent on securing a suitable gas supply on commercial terms. Australia 09 Melbana Energy Limited Annual Report 2026
10 Melbana Energy Limited Annual Report 2026 Andrew Purcell Executive Chairman Andrew Purcell founded the Lawndale Group (formerly Teknix Capital) in Hong Kong over 20 years ago, a company specialising in the development and management of projects in emerging markets across heavy engineering, petrochemical, resources and infrastructure sectors. Prior to this, Mr Purcell spent 12 years working in investment banking across the region for Macquarie Bank and then for Credit Suisse. Mr Purcell also has significant experience as a public company director, both in Australia and across Asia. Peter Stickland Non-Executive Director Peter Stickland has over 30 years’ global experience in oil and gas exploration. Mr Stickland was CEO and subsequently Managing Director of the Company from 2014 until January 2018 and then became a Non-Executive Director. Previously, Mr Stickland was CEO and subsequently Managing Director of Tap Oil Limited (ASX: TAP) from 2008 until late 2010 during which time he oversaw the evolution of the company into a Southeast Asia/Australia focused E&P company. Prior to joining Tap Oil, Mr Stickland had a successful career with BHP Petroleum (now part of Woodside) including a range of technical and management roles. Mr Stickland is also a life member of the Australian Energy Producers Limited (AEP). Michael Sandy Non-Executive Director Michael Sandy is a geologist with over 40 years’ experience in the resources industry – mostly focused on oil and gas. In the early 1990s he was Technical Manager of Oil Search Limited, based in PNG. He was involved in establishing Novus Petroleum Ltd and preparing that company for its $186 million IPO in April 1995 and over 10 years, he held various senior management roles with the Company. Subsequently Mr Sandy has been the principal of energy consultancy company Sandy Associates P/L, has set up and taken companies to IPO and has built extensive experience on the boards of listed and unlisted companies, including Tap Oil, Burleson Energy and Hot Rock. Board of Directors See pages 24 to 25 for further information.
12 Directors’ Report 36 Governance and Risk 45 Auditors’ Independence Declaration 46 C onsolidated Statement of Profit or Loss and Other Comprehensive Income 47 Consolidated Statement of Financial Position 48 Consolidated Statement of Changes in Equity 49 Consolidated Statement of Cash Flows 50 Notes to the Consolidated Financial Statements 78 Consolidated Entity Disclosure Statement 79 Directors’ Declaration 80 Independent Auditor’s Report 11 Melbana Energy Limited Annual Report 2026 Financial Report
Directors’ Report The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Consolidated Entity’) consisting of Melbana Energy Limited (referred to hereafter as ‘Melbana’, the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2026. Directors The following persons were Directors of Melbana Energy Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Andrew Purcell (Executive Chairman) Michael Sandy (Non-Executive Director) Peter Stickland (Non-Executive Director) Principal activities The principal activities of the Consolidated Entity during the year were oil and gas exploration in Cuba and Australia together with development concepts for the Tassie Shoal Methanol and LNG Project. Dividends There were no dividends paid or declared during the current or previous financial year. 12 Melbana Energy Limited Annual Report 2026
Review of operations International Operations Cuba - Block 9 (Melbana 30%) During the reporting period, the Company was focussed on delivering value for shareholders by advancing the appraisal and development of the Alameda discovery. The well was spud on 18 September 2025. The well was originally planned to take about three weeks to drill to a programmed total depth (TD) of 1,125 metres measured depth (m.MD). Drilling results showed that the upper portion of the target structure had been eroded and replaced with sediment and that this has happened prior to the most recent phase of structuring. The top of limestone was therefore encountered in the low-side (footwall) of the structure, approximately 600 m.MD deep to prognosis, so the decision was made to continue drilling past the original TD. Given the good hole conditions and whilst still in the reservoir formation, it was decided to stop drilling at 2,000 m.MD, incurring only about one week of additional drilling time. The well was drilled at a lower mud weight than Amistad-1 and with the proprietary reservoir drilling fluid, designed using the learnings of the previous wells drilled in Block 9, which performed very well and allowed the removal of barite from the drilling fluid in the lower portion of the well. The lower mud weight also assisted with the well drilling at a higher rate of penetration than expected. An extensive logging program was conducted and provided positive indications of extensive porosity and oil saturation within the 8-1/2” hole. Subsequent preliminary petrophysical analysis interpreted a total 169 m.MD, or 146 metres of true vertical depth (TVD), net reservoir based on a conventional cutoff of 9% porosity. The reservoir in Amistad-2 is comprised of three primary sections: the upper-most section is highly porous and correlated to the Unit 1A observed in Alameda-2; the second unit is separated from shallower Unit 1A by a tight limestone interval and appears to be consistent with the Unit 1B Lower interval previously observed by Alameda-2; and, the third appears to be a repeat section of Unit 1B, but in a rotated and steeply dipping position. An acid-soak was spotted across the entire reservoir interval before being circulated out without incident. Tubing and a pump were then run in hole and Amistad-2 was opened for testing. Initial flow confirmed a highly permeable reservoir averaging 550 bbl/d with minimal pressure drawdown in the first 24 hours. The pump rate continued to be increased, with a final average rate of 1,220 bbl/d of water with minimal pressure drawdown. Cumulative water produced during testing was approximately 1,840 bbl, around twice the total combined wellbore and volume of drilling, acid and completion brine/water lost during operations. Pressure data from the well indicates that the reservoirs at the Amistad-2 location are not in communication with those at the Alameda-2 location. Figure 3 – Trajectory and target of Amistad-11 Partner approval and all permits to drill Amistad-11 were acquired and the rig mobilised to location completed on 22 November 2025. The Amistad-11 well spud was awaiting receipt of outstanding payment amounts due from Sonangol. Sonangol advised they would not be able to remit further monies in the 2025 calendar year and requested the drilling of Amistad-11 be deferred till 2026. As such, the Company issued instructions to demobilise the contractor personnel and equipment and issued a Notice of Default to Sonangol, pursuant to the Joint Operating Agreement that governs the parties’ relationship in Block 9 for non-payment of cash calls. Failure to cure the default in the sixty days provided may result in the defaulting party being required to assign its interest in Block 9 to the non-defaulting party. AUSTRALIA: AC/P70 (Melbana 100%) During the period, Melbana updated the Prospective Resource* estimates relating to the undeveloped Vesta Deep (Plover) gas and Hadrosaurus (Jurassic) prospects located within AC/P70, offshore Figure 4 – “Thumper” weight-drop system in action Figure 5 – Completed 2025 2D seismic acquisition program Figure 3 – Trajectory and target of Amistad-11. Figure 4 – Completed 2025 2D seismic acquisition program. 13 Melbana Energy Limited Annual Report 2026
Civil construction was completed for the contingent Amistad-3 well. However, following the result of Amistad-2, it was decided to drill Amistad-11 instead of Amistad-3. Amistad-11 is a planned twin well to Alameda-2, which had originally produced at a stabilised 1,2351 BOPD prior to being damaged whilst shut-in post the original completion. The Amistad-11 well plan is to drill up-dip of Alameda-2, kicking off at a shallower depth to achieve the desired separation at optimum reservoir depth then to drill on to a total depth of 1,000 m.MD in the lower section of Unit 1B (See Figure 3). The well is planned to have an open hole completion, but with the capability of running a slotted production liner, if required. The reservoir drilling fluid Melbana has developed in response to its experience managing this formation previously will once again be used, given the good drilling rate of penetration and high productivity completion observed at Amistad-2. Drainage interference from the selected well position and trajectory is also estimated to be minimal, given the small volume produced to date relative to likely total recoverable volume estimated from prior testing and location outside the communication area of Alameda-2. Partner approval and all permits to drill Amistad-11 were acquired and the rig mobilised to location completed on 22 November 2025. The Amistad-11 well spud was awaiting receipt of outstanding payment amounts due from Sonangol. Sonangol advised they would not be able to remit further monies in the 2025 calendar year and requested the drilling of Amistad-11 be deferred till 2026. As such, the Company issued instructions to demobilise the contractor personnel and equipment and issued a Notice of Default to Sonangol, pursuant to the Joint Operating Agreement that governs the parties’ relationship in Block 9 for nonpayment of cash calls. Failure to cure the default in the sixty days provided may result in the defaulting party being required to assign its interest in Block 9 to the non-defaulting party. Sonangol did not cure the default within the sixty-day period and, accordingly, its entire participating interest in Block 9 was deemed to be transferred to Melbana. During the period, Melbana acquired 18 km of low-cost 2D seismic data using a highly mobile hydraulic weight-drop system and associated geophone receivers. The Company conducted the acquisition of these data, primarily along existing roads to tie existing and proposed well locations and aid in the identification of potential shallow drilling hazards. Preliminary processing indicates good data quality and the potential for the acquired data to supplement, and potentially replace, the vintage seismic data which has been utilised to date for shallow well targeting (See Figure 4). Given the success of the low-cost 2D survey, plans are being advanced to conduct a small-scale 3D seismic survey along the Alameda-2 anticline trend to tie the existing wells and support future shallow well development planning. During the period, a total of 13,824 barrels of crude was produced from Alameda-2 and delivered to storage, bringing the closing inventory to 36,687 barrels. Alameda-2 was shut-in on 2 November, with the aim of drilling a twin (Amistad-11) immediately adjacent to avoid the formation damage issues, which had demonstrably impacted Alameda-2 production performance. In 2024, McDaniel assessed a gross (100%) 2C Contingent Resource of 46 MMbbl with a Sub-Categorisation of Development Pending (80% Chance of Development) for Amistad Unit 1B in the Eastern part of the structure. McDaniel also assessed a gross (P50) best estimate Prospective Resource of 90MMbbl (with a Chance of Discovery of 70% if an appraisal well is drilled) for Amistad Unit 1B in the western part of the structure. McDaniel also assessed a gross (100%) P50 –Best Estimate-prospective Resource of 32 MMbbl for Amistad Unit 1A (with a Chance of Discovery of 70%) that could be similarly derisked by drilling an additional appraisal well and testing on pump in that area. The Company has retained the resource estimates for the Amistad structure as independently assessed by McDaniel in 2024. While regulatory uncertainty remains, management considers this to be a temporary factor affecting project timing rather than the resource base itself. Management continues to consider the underlying geological model sound. Trial seismic data and the resulting structural reinterpretation have highlighted the need for additional seismic coverage of comparable quality to reassess the Amistad structure. Based on the currently available information, management considers the existing estimates to remain the Company’s best estimates of recoverable volumes, subject to revision following that reassessment. 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 20212. The purchaser became the Operator and made a country entry to drill the giant Beehive Prospect located within the WA-488-P exploration permit (See Figure 5). Directors’ Report continued 1 See ASX announcement dated 28 August 2023. 2 See ASX announcement dated 23 April 2021. 14 Melbana Energy Limited Annual Report 2026
The Beehive Prospect was independently estimated to contain a Prospective Resource of 388 million barrels of oil equivalent (Best Estimate, 100% basis)3 and a high estimate of 1.6 billion boe. Melbana revised these estimates4 to a Prospective Resource 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 2018. Under the terms of the sale and purchase agreement, the Company is entitled to receive contingent future payments of USD5 million (subject to the purchaser making certain future elections with regards to the permit) and USD10 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. The titleholder has received all the approvals it needs to drill up to three wells, exploration and/or appraisal, into the Beehive structure within a defined activity area approximately 45 square kilometres in size. The wells could be drilled at any time within a 5-year window under this EP, commencing no earlier than 1 January 2025 and to be completed no later than 31 December 20295. The titleholder also applied for suspension and extension of the Permit Year 3 work program obligation to drill one well during the reporting period. The Company has no exposure to any future costs associated with this permit, including to the cost of drilling the 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. Figure 5 – The location of WA-488-P relative to the Company’s other licence areas in the Joseph Bonaparte Gulf. 3 See ASX announcement dated 14 August 2018. 4 See ASX announcement dated 24 August 2020. 5 See NOPSEMA website for more information: https://info.nopsema.gov.au/environment_plans/678/show_public. 15 Melbana Energy Limited Annual Report 2026
Directors’ Report continued WA-544-P and NT/P87 (Melbana 100%) These permit areas, containing the undeveloped Turtle and Barnett oil discoveries, were granted to the Company in 2020 under the Australian Government’s 2019 Offshore Petroleum Exploration Acreage Release. They are in shallow water (20 to 40 metres deep) and located about 300 kilometres southwest of Darwin, Australia. The Blacktip gas field lies to the northwest, and its pipeline transects the Northern boundary of NT/P87, allowing potential access to the Darwin LNG facility and/or the east coast gas market. The exploration permits host Carbonate Platform opportunities with similar resource potential as the adjacent WA-488-P exploration permit, which contains the Beehive Drilling Prospect (See Figure 6). During the period, the National Offshore Petroleum Titles Administrator approved a variation of the minimum work requirements for Permit Year 4 of petroleum exploration permits WA-544-P and NT/P87 (Permits). The approved variation removed the requirement to acquire 3D seismic in the permits and added geological and geophysical studies and well planning. The Permits are in the Joseph Bonaparte Gulf, offshore northern Australia. Melbana now has until 23 May 2027 to complete geological and geotechnical studies, including well and operational planning, before deciding whether to progress to drill one exploration well by 23 May 2028. Melbana is seeking parties interested in funding an exploration well to further derisk the prospect in return for receiving an interest in the Permits. A copy of the technical presentation Melbana is using during the farmout process is available on the Company’s website. The permits include a Prospective Resource of over 466 BCF of gas or 90 million barrels of oil (unrisked best estimate, 100%) called the Hudson Prospect. Figure 6 – The location of the Company’s Exploration Permits WA-544-P and NT/P87 relative to WA-488-P. AC/P70 (Melbana 100%) On 16 February 2022, the Company announced that it had been granted petroleum exploration permit AC/P70, located in the Territory of Ashmore and Cartier Islands, for an initial period of six years. Melbana made an application for this permit under the Australian Government’s 2020 Offshore Petroleum Exploration Acreage Release (See Figure 7). Since being awarded the permit, the Company has licensed various datasets and undertaken considerable work to better understand what exploration opportunities might exist there. The undeveloped Vesta-1 oil discovery (drilled in 2005) lies within the permit area and an appraisal well drilled in 2007 identified a gas cap. 16 Melbana Energy Limited Annual Report 2026
In 2025, the Company completed interpretation of the reprocessed 500km2 legacy Pantheon 3D seismic survey. The reprocessing substantially enhanced the seismic data quality enabling the identification and mapping of significantly larger exploration targets within and adjacent to the working petroleum systems of the greater Swan and Vesta discoveries. Some of these areas are updip to the old discovery wells, further increasing the chance of success. The combined unrisked gross best estimate Prospective Resource for the permit is 2,754 Bcf and 43 MMbbl. During the period, Melbana updated the Prospective Resource estimates relating to the undeveloped Vesta Deep (Plover) gas and Hadrosaurus (Jurassic) prospects located within AC/P70, offshore Northwestern Australia. Advanced geophysical studies resulted in a 3.7% increase in Prospective Gas Resource6 to 2,857 Bcf (unrisked gross best estimate) and an 81% increase in Prospective Oil Resource to 78 MMbbl (unrisked gross best estimate) and maturation of the Hadrosaurus lead to Prospect status. Estimates were made using probabilistic methods with arithmetic aggregation of totals. AC/P70 contains the undeveloped Swan gas field, discovered by Arco in 1973 while exploring for oil and which was further appraised by an additional two wells by BHP in 1991. Wireline pressure data and recovered gas samples from several sands of the Cretaceous Puffin sandstone confirmed a common pressure regime and the presence of mobile gas. The Vesta oil and gas field was discovered by ENI in 2005, also whilst exploring for oil, and was appraised by a second well. Three DST confirmed the presence of producible oil and gas from the Jurassic “Spec Di” reservoir but the field has not been developed. Significant and relatively high probability-of-geologic success (Pg) prospective resources are interpreted within untested compartments up-dip of the discovery wells. In 2025, the Company assessed the combined best estimate (2C) Contingent Resource volume for the Swan and Vesta fields was 276 Bcf and 34 MMbbl.The permit is adjacent to existing production and facilities offering a clear pathway to commercialisation of any significant discovery. Melbana is looking to farm out some of its 100% interest in the permit to a suitably qualified partner in return for an upfront cash contribution to back costs and funding the forward technical work programme, which includes one exploration well. The permit contains the undeveloped Swan gas field, discovered by Arco in 1973 while e oil and which was further appraised by an additional two wells by BHP in 1991. Wireline pr and recovered gas samples from several sands of the Cretaceous Puffin sandstone c common pressure regime and the presence of mobile dry gas. The Vesta oil and gas field was discovered by ENI in 2005, also whilst exploring for o appraised by a second well. Three drill stem tests (DST) confirmed the presence of pr and gas from the Jurassic reservoir, but the field has not been developed. Significant an high probability of geologic success prospective resources are interpreted within compartments up-dip of the discovery wells. During 2024, in fulfilment of its work commitments, 500km2 of the publicly available Pa seismic survey data was reprocessed. Interpretation of the reprocessed data indicated a previously interpreted closure at Swan in the deeper Jurassic and Plover sections. The holds the potential for large, un-tested, Triassic and Permian structural closures. The permit is adjacent to existing production and facilities offering a clear p commercialisation of any significant discovery. Melbana has engaged an advisor to assist it with farming out some of its 100% interest in to a suitably qualified partner in return for an upfront cash contribution to back costs and forward technical work programme, which includes one exploration well. Figure 6 - AC/P70 permit prospect and lead location Figure 7 – Location of AC/P70 and reprocessed 3D seismic volume outline. 6 See ASX announcements dated 10 October 2025. 17 Melbana Energy Limited Annual Report 2026
Directors’ Report continued 7 See ASX announcement dated 19 September 2024. WA-552-P (Melbana 100%) In 2024, the Company was granted petroleum permit WA-552-P7, located offshore Western Australia in the Dampier Sub-basin of the northern Carnarvon basin (See Figure 8). The permit was applied for under the Australian Government’s 2022 Offshore Petroleum Exploration Acreage Release and Melbana was one of only five companies to be awarded a new permit, with the other four all being major oil and gas companies. The permit was granted for an initial six-year period, with the primary term (first three years) work commitments comprising only desktop studies. Progressing beyond the primary term is at Melbana’s election. The permit area contains several small oil discoveries including Tusk, Okapi, Brocket, Oryx and Chamois and is immediately to the west of the Stag oil field, which has been producing oil since 1998. Melbana’s exploration thesis is that the Dampier Sub-basin may share a similar geological history to the Canning Basin, Petrel and Vulcan Sub-basins by way of salt seal deposition and carbonate reservoir architecture. The Company has been actively pursuing such plays in association with salt tectonics in its other exploration permits, WA-544-P and NT/P87. WA-552-P contains several small oil discoveries but Melbana’s concept for the block is a new deeper, carbonate play. NORTHERN CARNARVON BASIN | DAMPIER SUB-BASIN W22-5 industry.gov.au/2022-acr OFFSHORE PETROLEUM EXPLORATION ACREAGE RELEASE | AUSTRALIA 2022 Figure 8 – Location of WA-552-P (formerly W22-5). 18 Melbana Energy Limited Annual Report 2026
Tassie Shoal (Melbana 100%) The Company has Australian Government environmental approvals to construct, install and operate two stand-alone world scale 1.75 Mtpa methanol plants - collectively referred to as the Tassie Shoal Methanol Project - and a single 3 Mtpa LNG plant - known as the Tassie Shoal LNG Project - on Tassie Shoal, an area of shallow water in the Australian waters of the Timor Sea approximately 275 km northwest of Darwin, Australia (See Figure 9). These environmental approvals are valid until 2052. These projects uniquely provide a development option for discovered but undeveloped gas resources in the region. Progress for these projects is dependent on securing access to proximate gas supply on suitable commercial terms. No material progress was made in this regard during the reporting period. Figure 9 – Location of the Tassie Shoal Projects. 19 Melbana Energy Limited Annual Report 2026
Directors’ Report continued 20 Melbana Energy Limited Annual Report 2026
Results for the year The Consolidated Entity recorded a net loss after tax of $50,220,823 for the financial year ended 30 June 2026 (2025: net loss after tax of $4,151,446). The result primarily reflects the costs associated with maintaining Melbana’s corporate operations, together with significant non-cash charges recognised during the year. The principal drivers of the loss were the write-down of Block 9 inventory of $10,765,842 and the impairment of the Block 9 exploration and evaluation asset of $35,739,556. Excluding these items, the underlying net loss for the year was $3,715,425, which included approximately $210,000 of redundancy costs. The underlying result reflects the reduced cost base of the Group and is expected to result in a materially lower annual expenditure run rate going forward. During the year, the Consolidated Entity recorded net operating cash outflows of $3,987,479 (2025: $3,623,620), with the increase from the prior year primarily attributable to lower recoveries of project costs following the suspension of Block 9 operations part way through the year. Net investing cash outflows were $6,765,015 (2025: $3,796,677), reflecting lower cash receipts from Sonangol due to delays in the recovery of amounts funded by the Company on behalf of its joint venture partner. Net financing cash inflows were $6,535,580 (2025: nil), reflecting the net proceeds of the August 2025 placement. The successful exploration, appraisal and commercialisation of hydrocarbon resources within the Consolidated Entity’s Cuban and Australian permits, together with the development, commercialisation or sale of its methanol and LNG projects, has the potential to generate significant value for shareholders through either the establishment of profitable operations or the realisation of value through asset divestments. As the Consolidated Entity continues to advance its exploration and appraisal activities in its Cuban and Australian acreage, and progress development opportunities across its broader project portfolio, funding requirements are expected to be met through a combination of asset sales, equity capital raisings, farm-out transactions, joint development arrangements and other strategic partnering opportunities. Review of financial position The Consolidated Enitity’s net assets decreased to $11,751,654 at 30 June 2026 (30 June 2025: 55,926,331). The decrease was primarily attributable to the net loss after tax of $50,220,823 for the year (2025: $4,151,446), which was driven by the impairment of Block 9 exploration and evaluation asset of $35,739,556 and the write -down of associated Block 9 inventories of $10,765,842, comprising drilling supplies, materials and crude oil inventory. Excluding non-cash charges, the underlying result primarily reflects the corporate and administrative costs of maintaining the Group’s operations. The impairment charges reduced both carrying value of the Group’s asset base and its net asset position at year end. The Consolidated Entity’s net current assets position at 30 June 2026 was $7,824,820 (30 June 2025: $6,726,659), representing an excess of current assets over current liabilities. Cash balances at 30 June 2026 were $472,504 (2025: 5,115,674). Corporate The Consolidated Entity’s strategy is to maximise shareholder value from its existing portfolio while continuing to assess quality exploration, development and producing opportunities, value accretive projects and potential corporate transactions. At balance date, the Consolidated Entity did not have sufficient cash reserves to fund its forecast corporate costs or any future exploration and development activities. As discussed in Note 2, this position, together with the Consolidated Entity’s dependence on securing further funding, give rise to a material uncertainty that may cast significant doubt on its ability to continue as a going concern. Subsequent to the balance date, the Consolidated entity received $14.5 million in partial settlement of outstanding amounts due to it. This receipt strengthened it liquidity position and provided funding for its near-term corporate requirements; however, additional funding will be required before it can commit to future exploration or development expenditure. Regulatory uncertainty also remains elevated due to the continuing breadth and evolving application of United States sanctions relating to Cuba, including the designation of CUPET, the Consolidated Entity’s contractual counterparty under the Block 9 Production Sharing Contract, as a Specially Designated National. This designation may restrict or delay access to banking and payment channels and affect the willingness of financiers, suppliers, contractors and other counterparties to support the Consolidated Entity’s activities. The Consolidated Entity continues to monitor developments and obtain appropriate legal advice; however, the ultimate effect on its ability and timing to resume operations and undertake further investment cannot presently be determined. The Consolidated Entity had discussions with the United States Department of the Treasury’s Office of Foreign Assets Control for the Cuban project. Discussions with potential external financiers remain ongoing, and the Consolidated entity continues to evaluate a range of funding and transaction structures. However, there can be no certainty that sufficient funding will be secured within the required timeframe or acceptable terms. If sufficient funding cannot be secured, the Consolidated Entity may need to defer or reduce its planned activities, pursue asset sales or other corporate transactions, or consider the surrender of permits. 21 Melbana Energy Limited Annual Report 2026
Significant changes in the state of affairs During the financial year ended 30 June 2026, a number of events occurred that changed the state of affairs of the Consolidated Entity: On 21 August 2025, the Company announced that it had received binding firm commitments to raise approximately $7 million before costs via a placement. The placement involves issuance of 411,764,706 new Fully Paid Ordinary shares at $0.017 per share (Placement Shares), representing a 22.7% discount to the Company’s last closing share price on 18 August 2025. Each Placement Share is accompanied by one Attaching Option exercisable at $0.02 and expiring one year from the date of issue. Additionally, for every two Attaching Options exercised, the Option holder will receive one Bonus Option exercisable at $0.03 and expiring three years from the date of issue. Proceeds from the Placement will be applied towards the Company’s share of drilling costs for the Amistad-2 production well and for general corporate purposes. On 26 September 2025, the Company announced that the Amistad-2 surface hole had been drilled to a measured depth of 327 metres. During drilling of this non-reservoir section, oil impregnation was observed in the recovered samples, and an oil sheen was detected on the shale shakers. The surface casing was subsequently run and cemented in place, and the initial wellhead section, including the BOP stack, was installed and successfully pressure tested. On 10 October 2025, the Company announced the updated Prospective Resource estimates for the undeveloped Vesta Deep (Plover) gas prospect and the Hadrosaurus (Jurassic) prospect within Permit AC/P70 (Melbana Energy 100%), offshore Northwestern Australia. Advanced geophysical analyses resulted in 3.7% increase in estimated prospective resources, with unrisked gross best estimate prospective gas resources increasing from 2,754 Bcf to 2,857 Bcf and unrisked gross best estimate prospective oil resources increasing from 43 MMbbl to 78 MMbbl. The reassessment also resulted in the maturation of the Hadrosaurus lead to prospect status. Contingent Resources associated with the undeveloped Vesta and Swan oil and gas fields remained unchanged at an unrisked gross best estimate of 276 Bcf of gas and 34 MMbbl of oil. On 5 November 2025, the Company announced that the flow testing results of Amistad-2 in Block 9 and confirmed the presence of a highly permeable reservoir; however, no oil was recovered. The well was drilled to a total depth of 2,000 metres and intersected a total of 169 metres of highly porous net reservoir. Following evaluation of the results, plug and abandonment operations commenced. The Company also advised that acquisition of a low-cost 2D seismic survey was nearing completion. On 17 November 2025, the Company announced the commencement of mobilisation activities for the Amistad-11 well in Block 9 with drilling expected to commence and be completed following the formal receipt of all necessary permits and approvals. Amistad-11 was designed as an up-dip twin of the Alameda-28 discovery well and incorporated the latest well design and formation management techniques developed from learnings gained during previous drilling campaigns. On 5 December 2025, the Company announced that drilling of the Amistad-11 well in Block 9 had been deferred pending receipt of outstanding payments due from Sonangol Pesquisa e Produção S.A. (Sonangol), the 70% operator of the Block 9 Production Sharing Contract (PSC). The outstanding amounts related to agreed activities undertaken during 2025, and the Company elected to defer commencement of drilling operations until these payments had been received. On 3 January 2026, the United States intervened in Venezuela, removing President Nicolás Maduro. This has disrupted Venezuela-Cuba oil supply arrangements, potentially affecting the Company’s operations. Management has reviewed its operations planning and continues to monitor the situation and its potential implications. On 12 January 2026, the Company issued 436,764,704 listed options with the ASX stock code MAYOA (the “Options”). The Options were issued with an exercise price of $0.02 per share. The Options were issued in fulfilment of the attaching options to the fully paid ordinary shares issued by the Company on 27 August 2025. On 22 January 2026, the Company announced an operational update regarding the Block 9 Production Sharing Contract (PSC) onshore Cuba for the drilling of Amistad-11. The update confirmed that all equipment and contractors remain available to commence drilling the next well. A rescheduled spud date is now dependent on the Company’s joint-operation partner providing its share of the funds required for this activity. The Production from Amistad-1(which had ceased ahead of the planned commencement of Amistad-11 last year) was briefly resumed recently to alleviate wellhead pressure buildup. On 20 April 2026, the Company provided an operational update highlighting that the integration of newly acquired seismic data and the results from the Amistad-2 well had significantly improved its understanding of the Block 9 oilfield, further derisking future production drilling. The Company further advised that Sonangol Pesquisa e Produção S.A. (Sonangol) had failed to remedy its contractual defaults under the Block 9 Production Sharing Contract (PSC). As a result, Melbana initiated the process to resume 100% ownership of the PSC, subject to regulatory approval. The Company also confirmed that it was evaluating options to recover the USD23.5 million owed by Sonangol in relation to Block 9 activities. On 18 June 2026, the Company announced that the U.S. Department of State had designated Cuba’s state-owned oil and gas company, Unión Cuba-Petróleo (CUPET), as a Specially Designated National (SDN)9 pursuant to Executive Order 14404 issued by the President of the United States on 1 May 202610. CUPET is the Company’s contractual counterparty under the Directors’ Report continued 8 also sometimes referred to as Amistad-1 9 https://www.state.gov/releases/office-of-the-spokesperson/2026/06/sanctioning-cubas-state-owned-oil-and gas-company-union-cubapetroleo/ 10 https://www.whitehouse.gov/presidential-actions/2026/05/imposing-sanctions-on-those-responsible-for repression-in-cuba-and-forthreats-to-united-states-national-security-and-foreign-policy/ 22 Melbana Energy Limited Annual Report 2026
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