Cuban oil drilling one step closer to reality

Melbana is one of the few foreign companies, and the only one listed on the Australian stock exchange, working on the ground in Cuba. The company said Wednesday it was granted a certificate the confirms it met local and community regulations on the potential environmental and land use impacts of its proposed drilling program.

"Achieving this milestone further reduces the risk of permitting constraints on our drilling program schedule and ensures we remain on track to undertake our planned Block 9 drilling program in 2018," CEO Robert Zammit said in a statement.

Melbana's Alameda-1 prospect near the northern coast of Cuba is targeting a reservoir with more than 2.5 billion barrels of oil in place. The company estimates it would cost at least $20 million to drill two wells in Cuba, higher than previous estimates.

The company in a share placement over the last quarter generated about $2.1 million in capital to use to fund operations in Cuba, as well as those closer to home at its Beehive prospect in New Zealand. Melbana lost a drilling partner in Cuba last year and is now looking for a new relationship. French major Total and Australian energy company Santos are on board with operations in New Zealand.

For Cuba, the company said it's moving forward with the second phase of the permitting process, which includes getting the environmental licenses necessary to start the installation of drilling equipment.

Former Managing Director Peter Stickland stepped down in mid-Janary, citing health reasons. Directing the company through a Cuban oil program that saw an about face in ties with Havana in Washington, Stickland stays on as a consultant and non-executive director of the board.

Zammit, an Exxon Mobil veteran, stepped up from executive manager to steer the company.