Sonangol executes farm-in for contract onshore Cuba

Angola's state-owned Sonangol has executed a farm-in agreement with Melbana Energy Ltd. for interest in the Block 9 production sharing contract (PSC), onshore Cuba (OGJ Online, Oct. 5, 2016).

Sonangol confirmed it has completed its Confirmatory Due Diligence. The sole remaining outstanding condition is the receipt of Cuban regulatory approvals which have been received and are in the process of being formally documented, Melbana said in a release May 27.

Under the agreement, Sonangol will fund 85% of all costs associated with completion of drilling Melbana’s two highest ranked and high impact targets (Alameda and Zapato) for a 70% participating interest. For related expenditure to date, Sonangol will pay Melbana $5 million.

Melbana, as operator with 30% participating interest, has been working with drilling contractors and service providers to generate updated proposals to support the drilling of the wells. Necessary permitting is either in place, in the process of being renewed or extended, or need only be sought once all agreements for rigs and services are in place and drilling is ready to commence, the company said. 

Drilling operations are currently expected to begin in this year’s fourth quarter to test over 236 million bbl of prospective resource (best estimate), Melbana said. Scheduling is subject to movement restrictions due to COVID-19 management practices.