Why Did Melbana Energy's Alameda-2 Flow Test Generate Excitement?

SYDNEY, AUSTRALIA - In a significant development for Melbana Energy Limited (ASX: MAY), the company has successfully completed a flow test of lighter oil to the surface in its Alameda-2 appraisal well. This test yielded promising results that have excited industry experts and investors alike. Here's a breakdown of the highlights from the flow test:

Peak Flow Rate and Oil Characteristics

During the flow test, Unit 1B of the Amistad Formation produced a peak flow rate of 1,903 barrels of oil per day. On average, the stabilised flow rate was measured at 1,235 barrels of oil per day. What makes this oil even more promising is its significantly lighter nature, with an API gravity of 19°, and lower viscosity, measured at 30 centipoise (cP). This distinguishes it from the heavier oil typically found in other units of the Amistad Formation.

Production and Water Observations

The flow test also showcased great potential for production, as over 1,000 barrels of oil were produced and transported for further analysis.

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Additionally, no formation water was observed either during the flow test or from the logs, reinforcing the viability of the project.

Implications for Resource Estimates

Melbana Energy's Executive Chairman, Andrew Purcell, expressed delight at the successful appraisal well. He pointed out that the higher quality of oil found in Unit 1B has tremendous implications for the value of the produced oil and the potential for higher recovery rates. These results were achieved by perforating less than 20% of the total Net Pay for Unit 1B, showcasing the immense productivity potential of the oilfield.

A Success Across Multiple Units and Future Plans

To recap, the Alameda-2 appraisal well has proven the existence of moveable oil in Unit 3, achieved high flow rates of superior quality crude in Unit 1B, and confirmed a significant increase in the logged Net Pay to 615 meters TVD (with fractures) for the Amistad sheet as a whole. This success opens up more production options for Melbana Energy as it finalizes its field development plan.

In light of these positive results, the company is now considering the possibility of not abandoning Alameda-1, as had been previously planned. Instead, Melbana Energy is reassessing its field development strategy and weighing the value of continued operations in Alameda-1.

This update comes as Melbana Energy remains a 30% interest holder in and the operator of Block 9 PSC onshore Cuba. The company's achievements in the Alameda-2 appraisal well demonstrate the tremendous potential and value waiting to be unlocked in this oilfield.

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