According to Melbana, the transaction proves the high quality and considerable petroleum prospectivity of the Cuba Block 9 Production Sharing Contract (Block 9 PSC).
The acquisition by Petro Australis in Block 9 PSC will be subject to receipt of mandatory Cuban regulatory approvals.
Once approved, the Block 9 PSC Joint Venture will be owned by Melbana as the operator with 60% stake and Petro Australis with a stake of 40% stake.
In accordance with its stake, Petro Australis will cover 40% of certain back costs and 40% of costs incurred on developing the Cuban block in the future.
The partners will move ahead with the already started farm-out process. They will also execute the plans of Melbana to drill up to two wells on Block 9 next year.
Melbana Energy MD and CEO Peter Stickland said: “With Petro Australis exercising its back-in right, Melbana’s funding obligations will be significantly reduced whilst still retaining a very large exposure to this world-class oil exploration opportunity.
“In addition, we are looking forward to leveraging off the Petro Australis teams long history of working in Cuba and their deep relationships in country which will be extremely beneficial to any future joint venture between the companies.”
In case, Petro Australis fails to get the mandatory regulatory approvals then Melbana will stick to its current plans of developing Block 9 PSC based on its100% participating stake.
Originally, Melbana had pursued the Cuban onshore block in partnership with Petro Australis through an agreement signed in 2012. As per the agreement, Petro Australis was given a conditional option to increase its participating stake in Block 9 PSC to up to 40% before 2 September 2017.
