The Melbana Energy Ltd (ASX: MAY) share price rocketed as much as 16% higher today after receiving a tick of approval for petroleum exploration at an undeveloped site.
At time of writing, the Melbana share price is settled at 7 cents, up 6% on yesterday's closing price.
So what does today's news mean for the miner? Let's take a deeper look…
Image source: Getty Images
Petroleum permit granted
This morning, the energy company announced it had received a petroleum exploration permit from the National Offshore Petroleum Titles Administrator.
The site, located in the Territory of Ashmore and Cartier Island off the Western Australian coast, was described by the miner as "an attractive opportunity" and home to an "undeveloped Vesta-1 discovery".
This permit will allow Melbana to conduct operations at the site for an initial six-year period. The miner is already proposing a three-year working plan for the site.
The company estimates its eventual drill one exploration well, completed by year six, will cost around $30 million.
Comment from management
Executive chair Andrew Purcell said:
Our experience in this sub-basin coupled with the previous discoveries and multiple data sets and play types offered in this permit area affords a good opportunity for a technically strong and motivated junior like Melbana to try and identify its next substantial exploration prospect in Australian waters.
Our track record gives us some insights into what the market is looking for and we believe demand for more such opportunities will likely remain buoyant, especially if the current oil price is maintained.
Melbana share price snapshot
For most of last year, the Melbana share price sat at around 2 cents. It saw a small climb to 3 cents in September, before gaining serious traction in January.
Last week, the miner's shares saw a 24% jump to 4.6 cents each on the back of a 'significant' oil find at its site in Cuba. They jumped to a 52-week-high of 8 cents apiece on Monday.
The miner has a market capitalisation of around $190 million.
