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Melbana strikes oil before main targets

ASX-listed Melbana Energy (MAY) has made significant progress at its onshore oil exploration campaign in Cuba, and has already encountered surprise hydrocarbons at its first well, Alameda-1.

Melbana’s two-well campaign is perhaps one of the most exciting to be drilled by a company listed on the local bourse this year.

The Alameda-1 well has already hit oil and gas, well before its main targets. It was spud in early September and quickly encountered strong pressure and oil shows.

“Almost as soon as we started drilling, we entered an oil interval that continued for over 600 metres in an area that wasn’t one of our prospects,” Melbana executive chairman Andrew Purcell told Energy News.

“This is a bonus, and we are very excited to see what this means.”

There are three different areas of interest Alameda-1 is targeting: Amistad (the shallowest target), N Structure, and Alameda.

In total, the three structures are estimated to contain a resource of 141 million barrels of oil.

It is preparing to drill ahead at Alameda-1 this week and if the results to date are anything to go by, we can expect more exciting news around the new year.

Zapato-1 is the second well in the campaign and is targeting a similarly massive resource of 95 million barrels of oil. It will be drilled directly after Alameda-1 using the same rig from Sherrit International.

While many ASX listed explorers chase small to mid-sized prospects domestically, Melbana’s mantra is, go big, or go home.


An underexplored PSC:

Melbana’s tenement is called Block 9 and covers a massive 2344 square kilometres on the northern coast of the island nation.

It is about 140km east of Havana and sits on an extensive hydrocarbon system which has historically seen major discoveries such as the Varadero oil field.

Varadero was an 11-billion-barrel crude discovery and quickly became Cuba’s most important oil field supplying the domestic electricity market.

Notably, Cuba generates over 90% of its domestic electricity from hydrocarbons, namely oil.

As operator, alongside Angolan state-owned oiler Sonangol, Melbana holds a 30% interest in the block.

“Our partner is writing most of the cheques, which we are very appreciative for, but we are the operator,” Purcell said.

While it is somewhat early days for Melbana, the company is charging ahead and if it hits the mammoth payload it hopes to, has two options to market.

The domestic energy market sorely needs new investment and new development to meet increasing electricity demand.

Melbana will sell any oil produced to the domestic market, at the same price it would to international markets.

Infrastructure is already available with pipelines and storage to the north.

At current benchmark oil prices, if the wells come up productive, Melbana Energy will move from being an explorer to a producer of scale.

IT is the largest untapped gas play on the planet – the onshore Beetaloo and broader McArthur basins.

Two companies – Armour Energy and Tamboran Resources – hold vast acreage positions which once developed could solve an impending energy crisis in Australia.

It comes as the world grapples with the challenge of the energy transition, which can only be accomplished with gas.

Furthermore, as the world recovers from the COVID-19 pandemic, gas will play a vital role in providing energy security across Australia. The Top End is well positioned to take advantage of soaring demand in decades to come.

Tamboran, founded in 2009, was a first mover in the onshore region and farmed out a stake in its project to Santos. The ASX-listed company is currently working with Sanots to de-risk its premium acreage footprint, with a view to supply natural gas to LNG hubs for export and pipe gas to the east coast domestic market.

Armour Energy is also listed on the local bourse and is already a gas producer. It is working to spin off its acreage into a new company called McArthur Oil & Gas.

In this special edition feature discussion for the annual Northern Territory Resources Week and SEAOCC, Energy News senior journalist Paul Hunt is joined by Tamboran CEO Joel Riddle, Armour Energy/McArthur Oil & Gas chief Brad Lingo, and the head of the NT Gas Taskforce Alister Trier, to discuss the opportunities and challenges that lie ahead.

Australia is currently battling high electricity prices after gas demand from both domestic and international markets tightened drastically over the last 12 months.

The Gippsland Basin – which has powered the east coast for decades is running out of gas – renewables currently cannot keep up. Does Empire Energy and its assets in the Beetaloo hold the answer over the next decade?

According to the latest Australian Energy Market Operator (AEMO) report, without new production along with gas import terminals, Australia could grapple with an energy emergency.

The AEMO Gas Statement of Opportunities – the leading report providing a realistic gas outlook in Australia – the country needs urgent gas supply.

AEMO has singled out the Beetaloo Basin as the potential source for this gas.

Australia is in a mining boom where miners are happy to secure gas at all-time highs to power projects which underwrite Australia’s economy.

During this quarter, energy prices hit new highs in Queensland. Prices across the rest of the nation are still high too.

This is not just a problem Australia is facing. In Europe energy prices recently hit all-time highs. This was because there, put quite simply, wasn’t enough wind or sun to power renewable based generation.

Data from the Office of the Chief Economist warns of global gas shortfalls. While the US and Qatar will play an important part in meeting this demand, Australia remains the biggest producer and exporter of LNG to international markets.

At the same time, international trading partners – from China to Japan – are buying up cargos of LNG, which is keeping pressure on the market. The latest data showed Chinese LNG demand is outpacing Japan's and will continue to grow. Australian exports of LNG are near record highs.

This demand for gas, both domestically and internationally, is not expected to let up any time soon. Not for decades.

So, is the Beetaloo Basin the answer? Well, yes.
Even with Santos’ massive Narrabri coal seam gas project in New South Wales.

In fact, there’s talk of importing LNG from Queensland and Western Australia to feed electricity demand in NSW and Vic.

However, this will cost more than piping gas.

The Beetaloo Basin of the Northern Territory could be a more affordable option for domestic consumers, while allowing LNG exports (the second biggest export in Australia) to continue providing economic benefits for the nation.

In this special feature interview, Energy News senior journalist Paul Hunt discusses the game-changing project operated by Empire Energy, and the future of energy security in Australia.

He was joined by Empire Energy managing director Alex Underwood.

SATURN Oil & Gas is listed is on the Toronto Stock Exchange Venture (TSXV: SOIL) and the Frankfurt Stock Exchange (FSE: SMK).

While 2020-2021 was a challenging time for the oil and gas industry generally, Saturn Oil turned lemons into… well... oil.

It made a game changing acquisition this year, buying a massive parcel of land dubbed the Oxbow project in the southeast region of Saskatchewan, Canada.

Saskatchewan is of course one of the two biggest oil producing provinces in Canada and feeds hungry domestic and international markets with light crude produced onshore.

The deal saw Saturn Oil buy thousands of producing or soon-to-be-producing wells. In fact, now the deal is sealed, it will deliver approximately 6700 barrels of oil equivalent per day into the company’s balance sheet.

This is a 2000% increase on its current production rate. Something you cannot laugh at all.

At international benchmark prices, this is nothing but a windfall for the company which was only recently called a junior.

Saturn Oil has now officially become one of the leading independent oil producers in the country, almost overnight, thanks to this acquisition.

The Oxbow project is expected to generate between US$65 million to US$70 million in net revenue over the next 12 months alone.

Saturn Oil already had a track record of developing land other companies had overlooked, or just not invested in.

It’s this strategy which brings Saturn Oil into the sights of investors internationally, and one of the reasons why we’re covering this company in detail.

“We’ve created value where others have missed it,” Saturn chief executive John Jeffery told Energy News Au.

“Prior to Oxbow we’d never purchased land without a reserve booked on it, however. This acquisition gives us a major production base and serves as a cash cow for future projects.”

The proof is certainly in the pudding, by our book.

“Not only does Oxbow have significant upside… but at current oil prices, we’ll be able to pay off all debt in the next three years.

The acquisition was well-received by investors when first announced.

Saturn Oil went to market with a market cap of under $50 million. It raised $130 million in capital to buy Oxbow, which shows how bullish investors are.

With steady cash flow, the company is now looking to invest in future production. This will involve both workovers and new wells.

SATURN Oil & Gas is listed is on the Toronto Stock Exchange Venture (TSXV: SOIL) and the Frankfurt Stock Exchange (FSE: SMK).

While 2020-2021 was a challenging time for the oil and gas industry generally, Saturn Oil turned lemons into… well... oil.

It made a game changing acquisition this year, buying a massive parcel of land dubbed the Oxbow project in the southeast region of Saskatchewan, Canada.

Saskatchewan is of course one of the two biggest oil producing provinces in Canada and feeds hungry domestic and international markets with light crude produced onshore.

The deal saw Saturn Oil buy thousands of producing or soon-to-be-producing wells. In fact, now the deal is sealed, it will deliver approximately 6700 barrels of oil equivalent per day into the company’s balance sheet.

This is a 2000% increase on its current production rate. Something you cannot laugh at all.

At international benchmark prices, this is nothing but a windfall for the company which was only recently called a junior.

Saturn Oil has now officially become one of the leading independent oil producers in the country, almost overnight, thanks to this acquisition.

The Oxbow project is expected to generate between US$65 million to US$70 million in net revenue over the next 12 months alone.

Saturn Oil already had a track record of developing land other companies had overlooked, or just not invested in.

It’s this strategy which brings Saturn Oil into the sights of investors internationally, and one of the reasons why we’re covering this company in detail.

“We’ve created value where others have missed it,” Saturn chief executive John Jeffery told Energy News Au.

“Prior to Oxbow we’d never purchased land without a reserve booked on it, however. This acquisition gives us a major production base and serves as a cash cow for future projects.”

The proof is certainly in the pudding, by our book.

“Not only does Oxbow have significant upside… but at current oil prices, we’ll be able to pay off all debt in the next three years.

The acquisition was well-received by investors when first announced.

Saturn Oil went to market with a market cap of under $50 million. It raised $130 million in capital to buy Oxbow, which shows how bullish investors are.

With steady cash flow, the company is now looking to invest in future production. This will involve both workovers and new wells.

SATURN Oil & Gas is listed is on the Toronto Stock Exchange Venture (TSXV: SOIL) and the Frankfurt Stock Exchange (FSE: SMK).

While 2020-2021 was a challenging time for the oil and gas industry generally, Saturn Oil turned lemons into… well... oil.

It made a game changing acquisition this year, buying a massive parcel of land dubbed the Oxbow project in the southeast region of Saskatchewan, Canada.

Saskatchewan is of course one of the two biggest oil producing provinces in Canada and feeds hungry domestic and international markets with light crude produced onshore.

The deal saw Saturn Oil buy thousands of producing or soon-to-be-producing wells. In fact, now the deal is sealed, it will deliver approximately 6700 barrels of oil equivalent per day into the company’s balance sheet.

This is a 2000% increase on its current production rate. Something you cannot laugh at all.

At international benchmark prices, this is nothing but a windfall for the company which was only recently called a junior.

Saturn Oil has now officially become one of the leading independent oil producers in the country, almost overnight, thanks to this acquisition.

The Oxbow project is expected to generate between US$65 million to US$70 million in net revenue over the next 12 months alone.

Saturn Oil already had a track record of developing land other companies had overlooked, or just not invested in.

It’s this strategy which brings Saturn Oil into the sights of investors internationally, and one of the reasons why we’re covering this company in detail.

“We’ve created value where others have missed it,” Saturn chief executive John Jeffery told Energy News Au.

“Prior to Oxbow we’d never purchased land without a reserve booked on it, however. This acquisition gives us a major production base and serves as a cash cow for future projects.”

The proof is certainly in the pudding, by our book.

“Not only does Oxbow have significant upside… but at current oil prices, we’ll be able to pay off all debt in the next three years.

The acquisition was well-received by investors when first announced.

Saturn Oil went to market with a market cap of under $50 million. It raised $130 million in capital to buy Oxbow, which shows how bullish investors are.

With steady cash flow, the company is now looking to invest in future production. This will involve both workovers and new wells.