Melbana Energy says the operator of its New Zealand oil and gas site has finished infrastructure works, but from now it’ll be looking for ways to cut costs in the country.

The Australian energy company wants to focus on its Cuban asset, an onshore permit area which it says may contain 12.5 billion barrels of oil. At this stage it is uncertain how much of the oil is recoverable.

But Melbana (ASX:MAY) is still positive the Pukatea prospect in New Zealand is a low-cost winner.

The best estimate for the Taranaki play is a possible 12.4 million barrels of oil equivalent from three proposed wells, with peak production of 6,000 to 10,600 barrels of oil per day over four years.

The New Zealand government says oil and gas are its fourth largest export, worth $NZ3 billion ($2.7 billion) a year.

Melbana owns 30 per cent of the prospect, while operator TAG Oil owns the other 70 per cent.

The Australian business owns 100 per cent of its Cuban prospect, where it’s still one of the few Western energy companies to be working in that country.

Perth-based Petro Australis, which funds oil and gas investments in Latin America, has exercised a right to acquire 40 per cent of the Cuban project.

Melbana is working with the Cuban national oil company and expects to start drilling its Block 9 prospect by mid-2018.

Melbana shares were up 20 per cent to 1.2c in lunchtime trade on Thursday.

Featured Companies

You might be interested in