Funding possible for Cuban and New Zealand drilling programs

For a 12.5 percent discount to the last traded price, the company said it was offering 150 million shares to a small number of private investors at 1.4 cents (AUD), hoping to generate capital for work onshore Cuba and New Zealand.

"Melbana is now well positioned to proceed with its portfolio of high impact exploration projects, commencing next month with the exciting drilling opportunity at Pukatea-1 onshore New Zealand, and with the preparatory activities for its planned drilling program of up to two wells in Cuba commencing mid 2018," CEO and Managing Director Peter Stickland said in a statement.

The share placement came three days after Melbana said Australian energy company Santos and French supermajor Total may be on board with funding the Beehive prospect off the northern shores of Australia. Melbana said its counterparts have the option to take an 80 percent participating interest in a permit it says may be a "multi-billion barrel" prospect.

Melbana estimates its Pukatea prospect in New Zealand has, at its best estimate, 12.4 million barrels of oil equivalent, though the range extends to as much as 40 million barrels.

The company aims to tap the Alameda-1 prospect near the northern coast of Cuba, an area that has more than 630 million recoverable barrels of oil at the high end. Melbana is one of the few foreign energy companies with an established footprint in Cuba, and the only one listed on the Australian stock exchange.

The company estimates it would cost at least $10 million to drill two wells in Cuba. Its partnership agreement with Petro Australis Ltd. fell apart because of the lack of approval from regulatory authorities, leaving Melbana with a 100 percent stake in Cuban operations and without a partner that would carry 40 percent of the drilling costs.