Shares in Melbana Energy Ltd (ASX: MAY) have crumbled today and now trade deep in the red. The company also released its quarterly update today as well.
At the time of writing, the Melbana Energy share price is fetching 9.7 cents apiece, 14% down from yesterday's close.
Melbana advances oil programs last quarter
Key takeouts from the company's release today include:
- Called total depth on its Alameda-1 well – the first of two exploration wells
- Three significant and highly energised oil intervals encountered, each containing moveable hydrocarbons
- AC/P70 permit in the Ashmore and Cartier Islands awarded to Melbana for an initial term of 6 years
- $15 million gross raised for Block 9 Cuba exploration well where Melbana is 30% operator
- $32.095 million in cash and equivalents at the end of the period
What else happend this period for Melbana?
During the three months, the Alameda-1 well encountered three independent intervals of energised moveable hydrocarbons.
The first interval is reported to have at least 48 metres of potential oil and gas pay, per the company.
"During the quarter, the company announced that an independent expert assessed the [interval] to have 2.5 billion barrels of oil in place and prospective resources," Melbana noted.
Whereas the second interval was found to contain "a net hydrocarbon pay of approximately 100 metres measured depth (mMD)/88 metres total vertical depth (mTVD)."
Melbana was also awarded a petroleum exploration permit AC/P70 during the quarter. It is located on the Ashmore and Cartier Islands and was awarded for a period of 6 years.
Apparently, the AC/P70 permit contains the "undeveloped Vesta-1 oil discovery" previously drilled back in 2005. Whereas the 'Vesta-2 appraisal well' – drilled in 2007 – identified a gas cap at the site.
Management commentary
On a separate announcement also released today, regarding the Zapato-1 exploration well, Melbana Energy's Executive Chairman, Andrew Purcell said:
Our Alameda-1 exploration well has delivered results considerably greater than our predrill expectations. Having found three significant and highly energised intervals of net hydrocarbon pay we were naturally keen to try and get some data on the oil's composition and the likely performance of the reservoirs as soon as possible, but this will now have to wait for the formal testing program given that management of the high formation pressures made it complicated to repurpose our exploration well into a testing environment.
We'll all have to be a little more patient, therefore, but gladly accept that the reasons for the challenges we faced in drilling Alameda-1 give us good reason to be optimistic about our future in Cuba. We are now revising our plans for testing in Alameda-1 whilst also preparing for the start of drilling at Zapato-1.
What's next for Melbana?
The company noted it is updating the predrill resource assessment for two of its discovered intervals. It will release findings once they are received from the independent reserves certifier.
Furthermore, Zapato-1, the company's second exploration well, is expected to commence drilling in the second half of May 2022.
Melabana Energy share price snapshot
In the last 12 months, the Melbana Energy share price has jumped almost 358% and has surged more than 331% higher this year to date.
Zooming in a bit closer, it has slipped 39% into the red during this past month and is down another 30% in the past week.
