In February 2016, LGC made a strategic investment in Cuban oil explorer Melbana Energy Limited a company incorporated under the laws of Australia and listed on the Australian Securities Exchange (ASX), as a result of which LGC became the single largest shareholder of MEO, with a 15.8% interest.
Melbana Energy is pre-qualified as a foreign onshore and shallow water operator in Cuba and in September 2015 was awarded a 100% interest in the 2,380 km2 onshore oil block, Block 9 Production Sharing Contract (“Block 9 PSC”), located on the north coast of Cuba, 140 km east of Havana and along trend with the multi-billion barrel Varadero oil field. As LGC also holds a 15.14% interest in Petro Australis, which holds a conditional 40% back-in option to Block 9 PSC, the investment by LGC in MEO significantly increased LGC’s underlying interest in Block 9 PSC.
In July 2016, Melbana Energy reported on the significant potential of Block 9 PSC for Cuba: “The first of three identified oil plays on Block 9 has been assessed by Melbana Energy to contain 8.183 billion barrels of Oil-in-Place with a Prospective (Recoverable) Resource of 395 million barrels (Best Estimate, 100% basis) of potentially high quality light oil. Further work on the other, shallower oil plays, which also have significant oil potential, is continuing and will be reported on as available.”