Melbana Energy is seeking to sell its non-core offshore Australian Exploration Permits AC/P50 and AC/P51.
Image: A map showing Melbana's Vulcan Sub-basin offshore blocks. Photo: courtesy of Melbana Energy Limited.
Melbana has executed binding agreements with Rouge Rock Pty Ltd (“Rouge Rock”) for the sale of its wholly owned subsidiary that holds the Permits, Vulcan Exploration Pty Ltd. Rouge Rock is a current joint venture participant in the Permits holding a 45% participating interest.
The forward work program for the current permit year includes geological and geophysical studies including interpretation and mapping of reprocessed inversion seismic data with an estimated aggregate cost of A$500,000 and the next permit year commencing 19 May 2019 includes an exploration well in each permit.
The agreements provide for Melbana retaining exposure to the upside outcomes of a subsequent sale or farmout of either of the Permits by Rouge Rock.
The agreements are structured such that if Rouge Rock enters into an arrangement in future for cash, Melbana earns 10% of the cash benefit received by Rouge Rock. If Rouge Rock enters into an arrangement in future that provides for a full or partial carry on a well, Melbana has the right to back-in for a 5% interest after the well is drilled, effectively providing a carried interest during the drilling process and avoiding costs associated with the drilling process.
As previously highlighted by Melbana divestment options for the AC Blocks were sought to allow for Melbana to focus its resources on its Cuban and other Australian assets.
Melbana Energy’s CEO, Robert Zammit, said:
“While we consider the AC permits to be prospective, we believe it’s in the interest of our shareholders that we focus our financial and human resources on leveraging our strategic position in the Cuban energy sector and our high impact Beehive Australian acreage. I am pleased that we have been able to maintain exposure to the upside in the event of a successful farmout or cash sale of the Permits by Rouge Rock.”
Source: Company Press Release