Melbana Energy Limited (MAY.AX) Earnings Call Transcript & Summary

But again, really appreciate your engagement on that level. You can also download a copy of the presentation by navigating to the handouts pane in the control panel. And I understand the presentation is also being launched on the ASX, so you can get that platform as well. Finally, a copy of the webinar will also be available on Melbana's website and associated platform slide today. But for now, I'm going to throw it over to Andrew to kick things off for us. Andrew, the floor is yours.

Much appreciate it. I've got a few slides that I thought might just provide a context for everybody. We're not going to spend a lot of time on this. I think the main reason for today's call is to give you all the opportunity to ask questions and for me to answer them, if I can. So without further ado, Alex, can you please take us through to the first page of the presentation, which will probably be Page 3, I think, the corporate overview. For those who haven't met me before, I'm the Executive Chairman of Melbana Energy. I'm supported by a very experienced team of oil industry professionals for many decades, particularly in the exploration sector. They've been of great assistance in not only identifying the opportunity in Cuba, but in also defining the targets for our exploration program that we're currently running. The company has enjoyed a good deal of recent success, as I'm sure many of you know, on the basis of what we've discovered in Cuba to increase our value quite considerably, and we're in a good position financially from the support we received from probably many of you, the capital raise we did in September of last year, but also from the sale of assets we undertook last year to put us into a funded position to give us a long runway to do the best we can with the projects that we have. Next slide, please. Alex. Summary pages. I'm just pointing to the projects that are most front of mind, I think, at the moment for all of you. In Cuba, we've got onshore 2 exploration wells in our Block 9 area. We started drilling the first well in September. We've had a number of exciting oil intervals we've encountered. And the well, first of all, is still proceeding. And we're into the bottom. We think we're into the bottom formation now. And it is also showing some very exciting characteristics in terms of oil and gas coming despite the heavy mud weight that we have in the well. But Cuba will be the main topic of the conversation today. I'll just quickly point out, we do have some interesting projects in Australia as well. Perhaps the main 1 that you should be aware of is the sale of our offshore permit in Australia 488-P to the American Fortune 500 for EOG Resources last year. They are going to drill a well into that formation. They're hoping to do so late this year, but I think the border closures in WA have caused some complications with that. They're still trying to early next year. That well is 1 in which we have a contingent cash and royalty interest. We have nothing to pay, nothing to contribute there. We just have an exposure to the success case. And I'll talk a little bit more about that in this presentation before we complete. Otherwise, we picked up a very interesting new offshore block just last month here in Australia, AC/P70, which gives us an opportunity to add another exciting exploration asset to our portfolio. Next slide, please, Alex. The Alameda-1 well, this is a cartoon of our interpretation of the subsurface that existed before we started drilling. We're going to soon put out an updated interpretation along with the independent resource assessment of this upper sheet. But just through a quick summary. This proposed Alameda well, these subsurface structures that we identified from the various geophysical techniques that we adopted. What happened when we started drilling Alameda, we wanted to test these 3 structures labeled here as U1, N and Alameda. And so we designed 1 well with a slight deviation to go through each of them. Once we started drilling Alameda back in September, you'll recall, we're almost immediately were into oil shows and what is this upper sheet. We weren't expecting to find anything there. And indeed, we ended up finding something quite substantial there, 600-meter gross interval, I think it was in the end with probably 40-odd meters of net pay and with the capacity to be more. This U1 structure then when we continued forward -- and this whole section there is subject to a bit of reinterpretation because we encountered another substantial oil column and what we're calling the end structure of some 500 meters as well, which we are doing work on at the moment. Very highly energized well, which is very encouraging for the potential for recovery of these hydrocarbons. And we then call TD on this section. And believe now that we have gone through into this bottom section, but here in this predrill estimate was called Alameda, we are encountering strong oil shows and high pressures again in this bottom section and we will have more information on that as drilling continues in the days ahead. Next slide, please, Alex. We will complete that Alameda-1 well, and then we are prepared to do some testing of those bottom structures. Won't be the full extensive testing that 1 would normally do in a perfect environment, we're going to want to keep that rig moving. So we will do a week testing based on each of those formations. This should give us a very good idea of what we have there. And then we'll move the rig immediately on to drill the Zapato well. It's about 20 kilometers away from Alameda. It unlike Alameda, didn't have any previous wells that -- well, they had some oil recoveries, but the real game at the Zapato well is this very large structure Zapato that we've identified using gravity, there's a historical oilfield called Motembo that has historically produced a very light crude oil at surface in this area. But the kitchen for that oilfield has never been found and that was what some of these previous wells, Bolanos, Guadal and Itabo, I guess we're looking for. But what we can see from our analysis is they probably didn't drill deep enough. And that's our objective then to drill a well straight down into the top of the Zapato structure. It's a 1 shot, it's a good candidate for being the source of that oil field. And that will be our second well, probably starting in about May is my best estimate at the moment given the testing we're going to do once we finish Alameda. And that will probably be May, June, and that will bring to a conclusion the 2-well drilling program as currently planned. On to the next slide, please, Alex. The Bonaparte Basin, 1 I'll touch on just to finish with, it is an isolated carbonate buildup. This is the 1 we've sold to the American company. It is a play type, not been tested in Australia before. But where it has been tested abroad and where it's worked, these play types tend to work very big when they do work. So although it's a very decent best case perspective resource estimate of 400-odd million barrels of oil equivalent, the high case is 1.4 billion barrels. And I think that probably gives you an indication why a Fortune 500 U.S. company would want to make a country entry to Australia to drill this well. It's of a scale if it works, it's meaningful to them. It certainly will be meaningful to us given the royalty interest that we have. So that's a very exciting add-on to have in the portfolio for later this year, early next year. Next slide, please, Alex. The recent pickup in the Ashmore & Cartier region is downtown prospectivity itself. It's got discoveries on the block, it's got plenty of oil and gas fields around it, sort of feel we can add a lot of value to with our technical expertise and see if there's something else there to be defined and chased. Next slide, please, Alex. I knocked this slide together last night for this call. I just thought it might be useful, particularly below the middle bar, which show the months and dates ahead. It just shows you the runway of activity that we have in Cuba over the rest of this year and the frequency of news events that I currently anticipate having -- going out to the market, where we're drilling, where we're logging, where we're flow testing. If we have a successful flow test, do we put something on production straight away? That decision will come soon. Then there's Zapato wells and then also the resource estimates of the N structure or the I structure. And then Zapato too, hopefully, we'll have more news flow and more resource out of that well. We're all hopeful of. So there's plenty of things to look forward to in Cuba over the course of the rest of 2022. And we have enjoyed delivering the news that we've been able to date, and we hope to have more news to be able to deliver to you in the near future. That's the end of the presentation I prepared for today. And I think we can probably now just go straight into the Q&A section, Alex.

Perfect, Andrew. We do have a lot of questions, Andrew, as you mentioned. So look, the first 1 we'll get stuck into. You mentioned Melbana sold WA-488-P, which can continue to be high prospects, which was estimated to have a high upside return. As you mentioned, there's the potential to receive USD 10 million per 25 million barrels of oil equivalent as further royalties from this sale. Is it Melbana's intent to sell its remaining 30% in Block 9 under a similar sale agreement? And if future payments from such royalties are received, do Melbana have any short- and medium-term plans in the next, say, 1 to 2 years to return some of these royalty payments back to shareholders as dividend payments?

We don't have any immediate plans as a Board to sell our royalty -- contingent royalty interest in 488. We sold 100% of that permit. We no longer have a 30% interest, but we do have a contingent royalty interest. And what our objective at this point is some was to buy that contingent royalty interest as a Board will always consider any offer that we receive. But our position here and now today is to have that well drilled and if it's successful, then it should result in a very good future cash stream for Melbana. And look, we're a company that is in the business of delivering returns to shareholders. And particularly given that we've got a historically very large tax loss position, if we were to get a good revenue stream as a result of this royalty, then monetizing that and offsetting it with our cash -- our tax losses and providing a capital return to our shareholders would be a great way to deliver something to our shareholders in terms of value creation. So that seems a very reasonable question and way forward in the success case.

Andrew, so approximately how long will it be after the completion of Alameda that oil can be processed and sold?

Well, it could be a successful flow test in the Alameda wells in whichever section, in N or the I section, we could choose to put that on to immediate production given the type of well we designed if the characteristics of the reservoir are supportive of that. So we could be producing and selling oil very quickly from Alameda.

So approximately how many days or weeks should it take for the MAYO options to be converted to fully paid shares?

Okay, the options expire in September, that can be exercised at any time before then. And once you give notice to the register, the forms are on our website, I believe that they're processing them once a week. You can have your shares the following week.

So Andrew, you've provided a bit of a time line broadly in the presentation. But could you provide an indicative time line for the completion of the drilling of the Alameda drilling program? And in that estimated timing, could you also include the analysis of the well tests for drilling completed to date in the regions you run in N? And also the completion of the test for the lower region of the well being Alameda?

Okay. I'll unpack that in several stages. The drilling of Alameda, we're in -- we believe we're into the final section, the final formation that we wanted to test, the main section we wanted to test. Now there's always a tension between the geologists who want to keep drilling as far as possible while we're having all shows and the engineers who are going to maintain the capabilities of the rig, get the depth we're at. And then the requirements of our partners and my Board who are looking at the spend. And those 3 things need to align to come up with a decision on when to call TD on this well. But at this point, we're targeting getting to 4,000 meters as we originally prognosed. And we're probably at just under 3,800 meters at the moment. So it's not far to go. We'll then make that decision called TD and come back and flow test the I structure first, where we are at the moment. and then back up and flow test the N structure. We haven't done any flow test yet. We've done logs on the upper sheet and on the N structure. That's different to flowing oil from the well. So the logs give us a lot of useful information about the characteristics of the formation and other indications of hydrocarbons and its porosity of formation and et cetera, but a flow test is what's now needed and that's going to give us the last -- we hope it will give us last bit of information we need on the well. I say I hope because there's always 1 more test that besides this one. But that's the next important bit for us to look forward to. I think I answered a little bit of that question, Alex, I'm not sure.

I think you touched on every aspect over, Andrew. So we'll move on. We can we have something to get through. As you mentioned in the presentation, the program moves on to the Zapato field after the completion of the current program at Alameda. Is it possible that additional drilling might be required back at Alameda in order to further examine that field? And I guess the reason for this question is, it appears that schematics sketch or the cross-section in the IEO presentation seems to be at the top of the end section? Or is it likely that the resource might be retrievable from the current drill hole?

Right. I don't read too much into the simple schematics that we share online. They're greatly simplified to make it easier to understand the big picture of what's going on subsurface. Yes, absolutely, we'll go back and want to drill more wells in -- around the Alameda structure. We are advanced in our planning to -- I think you've heard me talk on this call about flow testing the N and I structures at the bottom of this first well, but we have that upper sheet discovery. And I don't think -- the best way to test that upper sheet discovery is to put another well in it and not use this current well because that upper section, we drilled through that like a hot knife through butter. We bang, we went straight through that down to 1,500 meters almost in no time. So a really quick, easy, cheap well straight that upper structure design to maximize recovery of the oil in that upper structure and appraise it is a well we would like to do next, and we're advanced on the permitting and planning for that well. But then the Alameda structure generally, yes, we could turn the first well on into a production well if the reservoir's characteristics support that when we do a flow test, but that's not the main game. The main game is to -- these are massive structures, and we think there's a lot of oil there. So let's get in there and step out and do a field development plan and really start to produce material volumes of oil. That will be the main game.

So I guess to that, Andrew, is it likely that additional funds will be required from shareholders for additional drilling or resource development? Or will the existing funds that you have currently held be sufficient in the short term 1 to 2 years?

Yes. I think we're fine. We've got the funds we've got at the moment to do the 2-well drilling program. We've got the options expiring -- excuse me, we've got automatic light sensors here and as you say, in that make things look dark automatically. We've got the options expiring in September, which are well in the money at the moment. They are going to deliver to us to exercise another $20 million and we got another $10 million in another pocket that we got from the sale of the permit to EOG here in Australia. So we're very well resourced. And I think the objective is to get these oil columns that we've encountered understood, appraised, turned into reserves. And once you get to that point, a whole slew of other funding options become available to you, which mean equity -- raising equity becomes the least desirable thing for us to do, especially at current interest rates, prepayment agreements with trading firms wanting to offtake the oil, fund the field development that way. We have our partner, Sonangol, a very well-resourced company who wants us to continue as operator forward. And we'd be looking to leverage all of those sources of capital as -- at the most cost-effective way and less dilutive way to develop these fields.

You mentioned your partner Sonangol. Does the contracts include drilling and development costs? And is Melbana's contribution fixed at 15% for both components should the commercialization of the well or indeed multiple wells proceed?

The agreement with Sonangol is to -- they're 70% interest now in the production sharing contract, Melbana is 30%. That's across the whole block, not just these 2 wells. But the agreement we did with them is that they would fund 85% of the cost of the first 2 wells that we're currently drilling. But thereafter, we're going to be 30%, they're going to be 70%.

So is Sonangol's interest limited to Alameda and Zapato drills only? Or does it extend to 70% ownership and 85% funding across the remainder of Block 9?

Yes. No. They're 70% of the entire block, not just these 2 wells. And that's the -- participating and working interest are the same for both of us going forward, they're 70%, we're 30%.

Now we've had this question come through quite a bit, especially with recent events between Russia and Ukraine. Do you expect the conflict between Russia and Ukraine to have any significant impact on contract agreements or anything, I guess, any other backlash potentially given post contract agreements with the Cuban government given the strong political ties between Russia and Cuba? And I guess an extension of that is, do you see any potential hindrances going forward with regards to that conflict?

The production sharing agreement that we and Sonangol have with the Cuban national oil companies protected like Cuban's foreign investment law, is a very high level of protection of relative to a number of other countries I've operated in. And Cuba has got a very strong need for foreign investment and for more oil production. So I think we're very comfortable that the runway is unencumbered for us in developing and continuing to understand the oil we've encountered thus far.

Thanks, Andrew. So I'll ask this question in 2 parts. Firstly, can you just confirm that the San Anton field was produced from an upper sheet reservoir?

That's outside of Block 9, and there's not a lot of publicly available information on that field. But broadly, historically, there's been examples of production from very shallow depths in Cuba, such as the Motembo oil field I discussed a few moments ago, that produced 5 million barrels, we think, historically. So there's what we can infer, but we don't have specific information.

So could you just provide an indication of timing for the release of the upper sheet resources?

Very soon. We're just assessing it with the independent consultant now following some of the interpretation. I hope it have it by the end of this week, possibly. But maybe it will slip into early next week.

One for us to look forward to. From information released, there seems to be potentially 4 distinct reservoirs zones within the upper sheet, that being the shallow section fractured reservoir, a shallow section conventional reservoir, top section in M2. The Amistad/U1 reservoir and the 1,800 high pressures on reservoir. Can you just confirm if that is indeed the case?

May I ask to hold my answer to that question until we put out our updated interpretation of the subsurface based on the results we've obtained to date and the work done by our independent resource certifier. And I'll answer that question well. Give us a few days.

No worries. Look, so does Melbana have any preliminary revisions to what the recovery factors within the upper and lower sheets may be? I guess that would be based on data obtained so far, things like API, pressures, first pass porosity and permeability, et cetera?

No. We need to do the flow test to get a better handle on that, all of its conjecture at this point. And the logs can only tell us so much because the mud weight is so high to control as well that it's very difficult to extract confident data on those variables in a live well.

Can you just confirm that Rafael Tenreyro, and apologies for the pronunciation, is your country manager in Cuba?

He is indeed, a very important and valuable member of our team.

So given the success of Alameda and what we have learned from the well to date, does this acquired knowledge improve the chances of success at Zapato?

Well, we already knew we were in a proven fairway. And -- but Zapato is an independent structure. So geologically speaking, probably not above what we've learned from the drilling of Alameda-1, our first well in country. That's been very valuable. And I think will be a great contributor to our forward efficiency and understanding as we drill Zapato.

Can you just please elaborate more on the production sharing agreement and how it works, especially in terms of Melbana's entitlement to oil?

Well, production sharing agreements are a common form of agreements in many resource projects in many jurisdictions around the world. The exact terms are always commercial and confidence. But typically, they work in a way that a foreign investor comes in and they put up -- they get given a title to an area of land for usually a considerably long time and they put up all the money and do all the work and try and find something. And if they do, then they're entitled to first have the lion share of the earnings from that field to repay their previous effort, the expenditure and the cost of that previous effort. And then once they've repaid themselves, then the production is shared, there's a production sharing contract. And that is the probably about as much as I can share on the details of our agreement with the Cuban national oil company. But our share is between our Sonangol, they're 70%, we're 30%.

So if the well is classed as commercial, do you plan to be refining oil from Block 9 this year by trucking it out?

We won't refine the oil. We will truck it out, certainly. We will produce the crude and put it into tanks that are available for that purpose up in Varadero, which is about 40-minute drive away. And the fields around us, the San Anton field that someone questioned before, and the [ Majaguillar ] field nearby, that's update. They just truck the oil up to Varadero from where it goes to its ultimate buyer.

Andrew, will oil zones in Alameda be production tested before the rig moves to Zapato or after the drilling is finished at Zapato?

We've put time into the work schedule to test the N and I structures if warranted. In the I structure, it's still a bit early to say. It's looking promising. We will do short tests in each of those sections before we move the rig to Zapato.

So given the extent of the net and gross intervals intersected, the value nature of reservoir and pressure regime in the N discovery, where is the discovery likely place within the prospective resource figures, the P10, P50, P90 prospective resource figures? Or are these figures potentially exceeded?

I'd like again to defer answering that question until we put out the updated resource assessment and independent certifiers view in the next few days, week. I'll answer those questions more precisely than I could now in a quick forum such as this.

So light oil or heavy, which 1 are you more confident you've found in the N structure and also in the main elevator target?

Again, it's really hard to tell. When we're getting oil come out of the shakers, it's mixed with the very heavy mud we're using to drill with. And it's difficult to take that off and do an assessment on its API, it looks lighter. And especially when it flows over the shakers considerably, as happened recently, as we said in this morning's announcement, in I structure, would that influx into the wellbore, let's wait and see. But even a little bit lighter than what is typical in Cuba is a good thing, but light is better, of course.

Are you still drilling a head through the Alameda reservoir till that you reached the end of your gross oil column? And is it as big or bigger than you anticipated?

We're not drilling ahead at this very moment. We're building mud weight just to try and put this well back in its box a bit. It keeps coming at us. It's a very energetic section we found ourselves in again. But once the mud weight is built up to what we need, we will continue to drill ahead. And a bit early to say that it's bigger or otherwise to what we knows because we're still in it. And let's see what another week of drilling has to say to us and then I'll be in a better position to answer that question.

So in your view, how soon could it be before this well to be producing cash for Melbana?

As I think I already answered, it's possible if the reservoir performs suitably and we turn on -- turn it on and just leave it producing, that's well -- that's oil for our account immediately. Before it starts producing cash for us is perhaps a slightly different answer and that we have to determine when we want to declare commerciality on the field because that has implications for the exploration period of the PSC, but leaving that onside, it's for our account immediately.

So when do you expect to spud the next well?

Best guess at the moment is early May.

Andrew. Just how happy are you guys with the progress that you've made over the last couple of months? And I guess big picture, is Block 9 looking bigger than you anticipated?

Naturally, we're very happy. We've had a lot of exciting intercepts of oil and movable oil would appear to given the very high mud weights that we're drilling with. And with regards to the size of the respective price here, well, it's that upper sheet. Unexpected. Intercept alone means our pre-drilling resource assessment was probably light. There's now potential in a whole sheet of Block 9 that we previously didn't allow for. So yes, I think it is fair to say it's bigger than what we anticipated.

So if the current drilling is proven commercial, can production begin from the current well? Or do you need to drill another one?

I think we've probably answered that one. We can produce from the existing well, but you'll want more wells to produce fields of the potential size of the 1 we're looking at.

Given the location and importance to Cuba's touristic, are there any considerations that affect the well differently to any other?

No. We're far away from the prime tourist zones. I mean, those of you who know Cuba or have been to Cuba, I mean you've got oil wells right near the beach on -- in the tourist zones and they're well disguised and they're back a bit. And they're ones that right next to the tourist zone, we're at good 40-minute drive away into the countryside.

So, Andrew, why is the historical extraction level of the existing fields so low?

It's heavy. The oil is heavy, typically from where it's been produced from in Cuba is in these upper sheets. And it's shallow, it's heavy, and it is less energized. So then those factors together means the 5% recovery factor, which has been typical of Cuban production to date, which is why that number is being applied to the oil in place that we have in our block.

Now I understand you may have covered this in the presentation, but it might be worth revisiting again for those of us who are [indiscernible] or who are still getting our head around the whole production aspect. Can you just explain in layman's terms what you're looking at and how different -- how it has differed from your expectations and estimations?

Well, in layman's terms, we always -- we're encouraged by entry into this block by the previous oil discovery. So we knew we were in a fair way of interest. We knew that there was hydrocarbons there. We wanted to go and test the deeper structures after analyzing the seismic data and the other data that existed like the gravity and so forth, because our thesis was that all these previous wells recovered lighter oil at depth. And we understood why probably after doing the analysis that we did, that if things are deeper, they're better protected from bugs that like the light chains of the hydrocarbons and create these heavier oil. So our thesis seems to have certainly been right. And that there is oil continuing on this strike from that Northern coastline of Cuba from Havana to Varadero is prolific hydrocarbon zone. So it's got a lot of discoveries. It's got a lot of oil production. But there's a whole island, and we're the very next cab off the rank after that existing production zone. So we're on strike and that it's an encouraging set of results we've got from this first well and at the depth we're getting them. And the pressure that we're getting them alone, the pressure is encouraging even if we had the same heavy oil, which would seem unusual at this depth. But even if we had the same heavy oil, a better pressurized system would assist with a higher recovery too. So there's a lot still to learn. But at this stage, we're very encouraged by what we're finding out. And I hope that answers it in layman's quite satisfactory.

No, I think you've done a pretty good job there, Andrew. Now just changing slightly, to get oil to the refinery will you need to use a pipeline? And if so, how long a time frame would it take to construct this? Or do you have existing infrastructure already?

There isn't existing infrastructure, there is an existing pipeline nearby, but it's -- I don't think it's probably -- I think it has seen same better days. And so we're not relying on that in the short term. We will truck it out to the tanks, as I mentioned initially, as others around us do. And -- but that's got a long-term solution. For a field this size proves to be as commercial as we hope, you will want a better delivery set of infrastructure. And a pipeline would be 1 such sensible solution. It's not that far. I mean compared to the pipelines I've been involved in building in Australia. This is nothing. It's just up the road. And the easy thing for pipelines is -- the hard thing, I should say, for pipelines is getting the initial [ right of way ] for a pipeline of grid as you go to people's properties and parks, initial parks or whatever. If you've already got a pipeline, that's all been done. So it's much easier just going to put some new pipe and weld it and they have to go through all those steps. But that's for the future.

So what does the development scenario currently look like based on the findings of the Alameda-1 well so far?

Yes. No, too soon. We're working up strawman, of course. Forgive me, but they are too soon. No, we need to do these flow results, and then we're going to have options A through F rollout depending on what we find there as to what the sensible next thing to do is, as we discuss it with our partners and what they think we should do. But we're certainly working up strawman.

Finally, I think we've touched on this previously. But again, given the success that you've had recently, it's probably worth restating. Are the findings of Alameda-1 so far in line with expectations? Or has the well exceeded expectations in your view?

Well, the expectations, ambitions, they're probably the same thing when you're drilling an exploration well. You can't expect things, but you can prognose and you can hope. So we're happy -- we're very happy to have encountered what we've encountered. There's a number of very experienced people supporting me but -- on the geology side here in Australia on the operations, drilling teams on the ground in Cuba. This is a significant finding in a lot of their experiences in their entire careers. So a great deal of excitement for the potential of what we have. We just need to keep doing the good work we're doing and getting the data in that we have and doing the test we still need to do to be able to properly explain what we think we have and then may I explain to the market what we think we have.

Over the field and further east in Block 9?

Well, certainly, that would be what your geologists would have this do next. Yes, there's the seismic that we do have, there's several different vintages of it, but it's not great quality. It's been -- given the results they've delivered and the accuracy with which they've told us we did encounter what in the subsurface, I think that's quite good enough for them. But no, they would like to see more seismic shop. But that's one of the pathways that we may go down, simply faster, quicker production from this upper sheet is more attractive one to me in the short term and let this field development fund itself rather than taking more expensive scientific studies at this point. But I'll have my say and our partners will have their say and our geos have their say and we'll come up with the best plan given our resources and our ambition might have turn this into a meaningful production system as fast as possible.

So Andrew, how is the financial cost model holding up? Do you envisage raising more capital anytime soon?

No. As I said before, we've got sufficient funds to complete the drilling program in Cuba. We've got the options coming down the road in September. There's money in Australia from the sale of the permit. But there's always -- if an attractive offer is provided to us to just top up the coffers to a very small extent, at the current price or near the current price in the market to allow us to do other work streams in parallel that now becoming more interesting to consider doing, given the results we have, that we've been originally budgeted for, that would be considered. But my Board and I are very committed to letting this share price have its head and learning the market's enthusiasm for our story continue. So any top-up we might do would be very small, if we did it.

Has there been any investigation to bring other drill rig assets in conjunction with the field development plan that's been -- that's under investigation at the moment?

Discussion certainly. These things all take a while to enact. And as I said, we've got options A through F that we're starting to model up our strawman how we do field development story. So all of these options are being considered. Yes, but nothing is firm.

So has the drill depth changed? And how deep could you go?

Drilling, that hasn't changed. Our geos have been spot on the money with what we -- what they said, we would encounter where plus or minus a few hundred meters in the case of where the pressure ramp started. And we're down to almost 4,000 meters now, and that's where we anticipated the [ BTD ]. How far could we go is we could probably go a fair way yet. We designed a very robust well with contingencies to allow us to achieve this depth and so we could do more. Is it sensible to do so? That's probably the better question. Obviously, you want to keep going while you're in a potential reservoir. But the deeper you get, the more challenging it gets and we've got stuff we want to test. And so there are discussions going on about this every day. But I think my best guess at this point is you'll get to the originally advertised TV or a bit thereafter and called TD on this well. And hopefully by the end of this month.

So the findings of this will upgrade the lower sheet prospectivity of the portfolio? And will there be an overall update on prospectivity of Block 9?

Yes. Yes, there will be continuous updates or prospectivity on Block 9, in the first of which on the upper sheet. As I said, I hope to have out to the market by the end of this week or within a week. That will be followed by a similar updated assessments based on the logging and analysis done of the N structure and the I structure. So a lot of information ahead.

We've only got a couple more questions to go. I just preface that I can being in our data with questions. So we might not be able to get to all of them. I think we probably have time for maybe 3 or 4 quick more questions. Andrew, what is the API of the oil across the shakers?

Yes. Hard to say, again, for the reasons I gave. It's coming out of the well or with the mud. So it's difficult to separate and test. We've done so and reported those results previously and the oil was lighter than the Cuban average. But we need to get a uncontaminated sample from with flow test to get that number done properly.

Has there been any analysis done for butane and LPG content?

No compositional analysis work has been done yet either for the same reason. The hydrocarbons are coming out all at once, all together, all jumbled. So we need to get some uncontaminated samples to do that work.

And sort of what's your forward drill plan moving forward?

Finish Alameda by the end of the month. Test log the I structure, test the I structure. We want to test the N structure, [ de-mud ], drill Zapato. That's the current work plan to the end of the 2-well program as currently planned.

Fantastic. We'll probably have time for just a couple more questions. Mindful that we are sort of coming towards the end of our allotted time here. You mentioned the upper sheet well is being committed. Do you have any idea on when will you drill?

I'd like to think we are in a position to have that well drilled immediately after we finish Zapato. So planning to finish Zapato by the end of June. I think the rig will probably need a week or 2 for a bit of maintenance by them and a week or 2 for moving it. So August potentially, we might be ready to start drilling that appraisal well into the upper sheet.

And before we leave you, Andrew, could you just provide us with a bit of a comment on your plans for the offshore interests?

The Australian offshore interest, well, the main 1 is looking forward to that well that EOG are going to drill into Beehive. That could be a transformative discovery for Australia and financially very reiterated through us at Melbana. And we look forward to adding to the similar such opportunities for the portfolio either from the adjacent permit areas we have to Beehive up there or from this new permit was just been awarded up in the Ashmore Cartier in the middle of a very prospective zone, which we've begun work on.

And we've just had a couple of questions as well come through, and this is sort of a bit of a same with about 4 or 5 people ask the same thing. Can you just repeat for those who maybe -- may have missed it. Can you just repeat the date of when you'll begin flow testing Alameda?

Our data is always difficult, but everything going as I anticipate it to go and almost nothing ever does go as I anticipate it to go. That's drilling exploration wells for you. But perhaps another 2 weeks of drilling Alameda, calling total depth, not my decision on my own, but calling total depths in 2 weeks. Then logging the section that we've just drilled, which is another week, that's 3 weeks. And then if warranted, it certainly looks like it might be warranted, flow testing the I structure in about 4 weeks from now. And then that will take a better week and then flow testing the N structure immediately after that. So 4 to 5 weeks from now flow testing those bottom 2 primary target structures.

Fantastic. We'll now probably wrap it up for us today, Andrew. I think by my account, we've got through almost 50 questions, which is a fantastic effort on your part. So that's all the time we have today. I like to make special mention for everyone who has joined us today, I think we topped out at nearly 450 people on the call, which is fantastic. So thank you all for joining me. I'd also like to thank Andrew for presenting and take the time to answer quite a few questions, as we mentioned. Now a recording of the webinar will be on Melbana's website and associated platforms later today. Andrew, before I let you go. Can you just -- do you have any final comments that you want to leave with us?

Thank you for all your time, and thank you for your support of our company, and I'm very pleased that many of you have been able to enjoy the success you deserved given the long years, some of you have been supporting our efforts.

Fantastic. Well, look, Andrew, again, really appreciate you taking the time to take us through the presentation, asking some questions. I want to make special mention as well, the level of questions that we're receiving from the shareholders, I think you'd agree, Andrew, have been fantastic. So again, really appreciate your high level of engagement. That wraps it up for us here. So thank you, everyone. Have a great day, and we'll see you shortly. Thank you.

Thank you.