Farmout Agreement Signed for Cuba Block 9 PSC

Source Press Release
Company Melbana Energy LimitedSonangol 
Tags Asset Deals, Deals, Upstream Activities
Date December 23, 2019


• Melbana Energy has signed a binding heads of agreement (HOA) with Sonangol, the National Oil Company of Angola, for it to acquire a 70% Participating Interest in the onshore Cuba Block 9 Production Sharing Contract.

• This HOA provides that, subject to satisfactory completion of confirmatory due diligence, entry into a formal farm-in agreement and receipt of necessary regulatory approvals:

- Two high impact exploration wells (Alameda and Zapato) to be drilled in Block 9;

Sonangol to fund 85% of all costs associated with the completion of this two well drilling campaign to earn 70% participating interest in Block 9;

- Melbana to fund 15% and retain a 30% participating interest in Block 9;

- After the completion of these two wells, Sonangol and Melbana shall bear their own costs and expenses in proportion to each of their participating interests;

Sonangol to immediately pay Melbana’s past costs of approximately $5.0 million, largely covering Melbana’s forecast funding commitment to these wells; and

- Melbana to remain operator, until the completion of the two well drilling campaign, thus maintaining responsibility for operations and management of costs.

• All permits, environmental approvals and land access agreements are already in place and are being extended, as necessary. Tenders for rigs and services are being refreshed.

• Block 9 is independently assessed to have 14.8 billion barrels of oil in place (best estimate) and Prospective Resources of 676 million barrels.

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