Melbana Starts Drilling New Cuban Production Well

Melbana Energy Ltd on Thursday began drilling the Amistad-2 production well onshore Cuba after delays.

The campaign eyes a total measured depth of 1,125 meters (3,690.94 feet), the Sydney, Australia-based oil and gas company said in a statement on its website. Melbana previously said it would take about three weeks to reach the target depth.

“The Unit 1A formation will be logged, but not tested, en route. A 650-metre MD section of the Unit 1B formation will be drilled to intersect a series of natural fracture systems interpreted from seismic”, the statement said.

Melbana finally mobilized the rig last month after delays. “Several logistical challenges have been encountered in recent months in Cuba, in part due to hurricane damage impacting port operations, but these are now largely resolved and the scheduling impact absorbed into the new schedule”, it said in a stock filing August 21.

“The widely reported power outages in Cuba are also impacting local communities and industry. As a result, Melbana’s preferred drilling rig was once again redirected to drill a gas well to provide fuel for additional electricity generation, thereby resulting in a delay to the scheduled spud date for Amistad-2”.

Melbana plans to trial crude exports from Cuba by the end of the year, after stalling the trial earlier this year due to port issues.

“More than 30,000 barrels of oil are now in storage”, it said in the filing last month. “Additional production from Amistad-2 would accelerate the rate of build in crude inventory, allowing for bigger cargoes more frequently”.

“The impact of conflicts in other parts of the world on shipping rates also made the shipment of a relatively small cargo potentially uneconomic, which outweighed the advantages of testing the company’s operational and transactional plans for exporting oil and receiving payment”, Melbana added.

“These conditions have now largely normalized and work has resumed towards an initial trial export before the end of the year when there is a sufficient volume of oil in storage to fill a larger vessel, which is expected to deliver improved unit economics”.

Melbana is in the “advanced” stage of the permitting process for the drilling of additional shallow production wells next year, according to last month’s announcement.

“Each drill pad is initially permitted for at least two wells targeting interpreted favorable geological settings for Unit 1B in the upper Amistad structure”, Melbana said.

“A dedicated production test of the shallower Unit 1A is also under consideration, given its shallower depth, favorable appraisal results and similar quality oil.

“Using the existing 2D seismic, a further 15 drill pad locations have been identified, also to be permitted with at least two wells per pad, based on the current geologic interpretation and multi-disciplinary development planning activities.

“Prioritization of these additional locations is underway and rolling permitting will continue in sequence as necessary to ensure a continuous runway of available drilling sites to support the pace of the field development program”.

The current campaign, Amistad-2, sits approximately 850 meters southwest of and 200 meters up-dip to the already producing Alameda-2, both in Block 9, according to Melbana.

Block 9 spans 2,344 square kilometers (905.02 square miles) on the north coast of Cuba, 140 kilometers (86.99 miles) east of Havana and in trend with the multi-billion-barrel Varadero oilfield, according to Melbana.

Melbana operates the block with a 30 percent stake. Sociedade Nacional de Combustiveis de Angola EP owns 70 percent.

A 2018 assessment by McDaniel & Associates declared 15.7 billion barrels best-estimate oil in place and 676 million barrels best-estimate prospective resource, according to Melbana. Last year Melbana announced a prospective resource of 90 million barrels based on results from an appraisal well.

To contact the author, email jov.onsat@rigzone.com