In addition to holding a variety of interests in Cuba based businesses, LGC has substantial ownership in two energy exploration companies, one of which has issued a news release under the banner headline of “50% Upgrade to Exploration Potential in Melbana’s Cuba Acreage”.
LGC has a 13.76% interest in Australian listed Melbana Energy (MAY), which announced results of a new assessment of the oil and gas exploration potential of the conventional onshore play known as Block 9.
In its news release, Melbana included this first bullet point to catch the reader’s attention: “Exploration potential of Block 9 upgraded by more than 50% to ~12 billion barrels of Oil-in-Place with Prospective Resources of 612 million barrels (unrisked Best Estimate, 100% basis)”.
Admittedly, high potential plays of this size take a considerable amount of time and money to develop. However, Melbana is looking to finalize well proposals by the end of this quarter and possibly be drilling within a year or so. The first target area is called Alameda.
“The Alameda Prospect (formerly I Lead) is currently the highest ranked exploration target in Block 9 PSC. Alameda is a large structure located in the western part of Block 9 and is in a similar structural position to the Varadero field, the largest oil field in Cuba, approximately 35km away. Alameda has an estimated chance of discovery of 32% and recoverable volumes ranging from 3 – 214 million barrels, with a best estimate of 65 million barrels recoverable.”
Block 9 is certainly not virgin territory as it is surrounded by prolific producing areas.
“Covering 2,380km2 onshore the north coast of Cuba, is in a proven hydrocarbon system with multiple producing fields within close proximity, including and the Majaguillar and San Anton fields immediately adjacent to Block 9 and the multi-billion barrel Varadero oil field. Block 9 contains the Motembo field, the first oil field discovered in Cuba.”
The bonus for LGC is that not only is it the single biggest shareholder in Melbana, but owns 15.4% of Petro Australis (private).
“Melbana is prequalified as an onshore and shallow water operator in Cuba and was awarded a 100% interest in the Block 9 PSC on 3rd September 2015. Melbana has secured a 100% interest in Block 9, subject to a conditional 40% back-in option to be exercised no later than September 2017 held by Petro Australis Limited.”