26 Nov

AGM 2021 Presentation

2021 Annual General Meeting 26 November 2021 2 Disclaimer Summary of information: This presentation contains general and background information about Melbana Energy’s activities current as at the date of the presentation and should not be considered to be comprehensive or to comprise all the information that an investor should consider when making an investment decision. The information is provided in summary form, and should not be considered to be comprehensive or complete. Not financial product advice: This presentation is not financial product, investment advice or a recommendation to acquire securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. Disclaimer: Melbana Energy and its related bodies corporate and each of their respective directors, agents, officers, employees and advisers expressly disclaim, to the maximum extent permitted by law, all liabilities (however caused, including negligence) in respect of, make no representations regarding, and take no responsibility for, any part of this presentation and make no representation or warranty as to the currency, accuracy, reliability or completeness of any information, statements, opinions, conclusions or representations contained in this presentation. In particular, this presentation does not constitute, and shall not be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of Melbana Energy. Future performance: This presentation contains certain forward-looking statements and opinion. The forward-looking statements, opinion and estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements, including projections, forecasts and estimates, are provided as a general guide only and should not be relied on as an indication or guarantee of future performance and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of Melbana Energy. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward looking statements or other forecast. Risks: An investment in Melbana Energy is subject to investment and other known and unknown risks, some of which are beyond the control of Melbana Energy. Not an offer: This presentation is not, and should not be considered as, an offer or an invitation to acquire securities in Melbana Energy or any other financial products and neither this document nor any of its contents will form the basis of any contract or commitment. This presentation is not a prospectus. Offers of securities in Melbana Energy will only be made in places in which, or to persons to whom it would be lawful to make such offers. This presentation must not be disclosed to any other party and does not carry any right of publication. Neither this presentation nor any of its contents may be reproduced or used for any other purpose without the prior written consent of Melbana Energy. No Distribution in the US: This presentation is not an offer of securities for sale in the United States. Any securities to be issued by Melbana Energy have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act. No public offer of the securities is being made in the United States and the information contained herein does not constitute an offer of securities for sale in the United States. This presentation is not for distribution directly or indirectly in or into the United States or to US persons. Monetary values: Unless otherwise stated, all dollar values are in Australian dollars (A$). The information in this presentation remains subject to change without notice. No distribution: Distribution of this presentation may be restricted by law. Persons who come into possession of this presentation should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Contingent and Prospective Resources: Unless otherwise specified, the information that relates to Contingent Resources and Prospective Resources for Melbana is based on, and fairly represents, information and supporting documentation compiled by Mr. Dean Johnstone, who is an employee of the company and has more than 34 years of relevant experience. Mr. Johnstone is a member of the American Association of Petroleum Geologists. Mr. Johnstone consents to the publication of the resource assessments contained herein. The Contingent Resource and Prospective Resource estimates are consistent with the definitions of hydrocarbon resources that appear in the Listing Rules. Conversion factors: 6 Bscf gas equals 1 MMboe; 1 bbl condensate equals 1 boe 3 Corporate Overview Andrew Purcell BEng (Elec), MBA Executive Chairman Investment banking (Credit Suisse, Macquarie Bank), Australia and Hong Kong. Experienced in resources banking, cross border financing, commodity hedging and corporate turnarounds. 20 years as a public company director in Australia and abroad. Chairman of AJ Lucas Group Limited (ASX: AJL). Peter Stickland BSc (Hons) (Geology) GDipAppFin Technical Director 30 years global experience in oil and gas exploration commencing with BHP Billiton. CEO of Melbana Energy (2014–2018) and Tap Oil (ASX: TAP, 2008–2010). APPEA Board member (2009-2017). Michael Sandy BSc (Hons) (Geology) Non-Executive Director 40 years oil and gas exploration experience, managing assets in PNG, Asia the Middle East and the USA. 20 years as a public company director involved in numerous acquisitions and divestments. Theo Renard Chief Financial Officer/ Company Secretary 21 years in credit and relationship banking in the fields of commercial and investment banking throughout South Africa, Asia and Australia. Experienced Chief Financial Officer, Company Secretary and director of public companies in Australia, Africa, Asia and the Subcontinent. Errol Johnstone BSc (Hons) (Geology/Geophysics) Chief Geoscientist 29 year career with ExxonMobil in a variety of exploration and appraisal roles. Recognised industry expert in several key geoscientific disciplines. Responsible for generating many new exploration initiatives internationally resulting in several significant discoveries. Ken Hendrick BEng (Civil), MEngSc, MBA Implementation Manager Decades of experience in senior project management roles safely executing complex multi-discipline developments for the resources sector, particularly in the offshore oil and gas industry. Experience of the Board & Management 1.0 1.5 2.0 2.5 3.0 Nov-20 Feb-21 May-21 Aug-21 Shareholders Board & Management 9.7% 1 year performance +177% Company Data A$ (24 November 2021) ASX Code MAY Shares on Issue 2,673m Options 547m Last Close 0.022 Market Capitalisation $58.8m Cash (30 September 21)* $22.6m Debt nil * Includes funding for Cuban drilling operations received from Sonangol and excludes USD7.5m received from sale of WA-488-P in November 2021 4 Highlights of the last 12 months Awarded two new exploration permits offshore northern Australia next to the Beehive Prospect and containing the undeveloped Turtle and Barnett oil discoveries Sale of WA-488-P (containing the Beehive Prospect) to a Houston-based Fortune 500 oil and gas company that will drill an exploration well to test the potential of this Prospect. Melbana received upfront cash and remains entitled to future contingent cash and royalty payments without having any exposure to the cost of drilling the well. Sale of AC/P50 to Santos and SapuraOMV (and option granted to the same parties to purchase AC/P51, on similar terms). Melbana received upfront cash and remains entitled to future contingent royalties. Successfully progressed preparations for the commencement of drilling operations onshore Cuba, despite the considerable and unusual complications arising from the COVID-19 pandemic. Current Position - Oil shows encountered continuously over a significant 670 metre interval during the drilling of the first well in Cuba (in a section with no previously defined prospects). Previously defined prospects lie ahead and still to be tested. - Main prospects for the two wells being drilled in Cuba lie ahead, as do the results of wells being drilled in offshore Australian waters (in 2022 or early 2023) in which Melbana has contingent royalty interests (and no expenditure commitments) - Good cash position given sale of holdings in other ASX-listed oil and gas companies, recent raising to fund our share of Cuban drilling costs and the receipt of USD7.5m from the sale of WA-488-P - Strong oil price environment likely to remain into 2022 5 Upcoming potential value catalysts ** Prospective Resources Cautionary Statement - The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) related to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Future exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. All quoted volumes are Prospective Resources (Best Estimate) and have been taken from Independent Expert McDaniel & Associates Competent Persons Report, released to ASX on 7 August 2018, as adjusted by Melbana Energy for area relinquishment or from subsequenty available data. Melbana is not aware of any new information or data that materially affects the information included in that announcement and that all the material assumptions and technical parameters underpinning the estimates in the announcement continue to apply and have not materially changed. MELBANA ENERGY HAS INTERESTS IN FOUR UPCOMING EXPLORATION WELLS TESTING >650 MILLION BARRELS ** OF PROSPECTIVE RESOURCE * Timing of the two Australian exploration wells as estimated by Melbana Energy. Exact dates are at the Operator’s discretion and dependent on receipt of various regulatory approvals, rig availability etc. CUBA: Alameda-1 CUBA: Zapato-1 AUSTRALIA: AC/P50* AUSTRALIA: WA-488-P* OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB 2021 2022 2023 1 st Target 60 million barrels 2 nd Target 9 million barrels 3 rd Target 72 million barrels Target 95 million barrels Total Prospective Resource: 236 million barrels Melbana Energy's Interest: 30% Operator: Melbana Energy Total Prospective Resource: undisclosed Melbana Energy's Interest: contingent royalty Total Prospective Resource: 416 million barrels Melbana Energy's Interest: US$7.5 million upfront + contingent additional payments of US$5 million and US$10 million/25 million barrels produced 6 Project Locations and Summary Cuba Australia • Two high-impact onshore exploration wells – commenced September 2021 • Testing a combined resource of 236 million barrels of oil ** • Proven hydrocarbon system, proximity to good oil storage and export infrastructure and existing large oilfields • Drilling program to test four separate targets • Melbana is operator, partnered with the National Oil Company of Angola (Sonangol) • Substantial interval of oil shows encountered in first well • Two offshore exploration wells to be drilled testing a combined resource of at least 416 million barrels of oil/equivalent ** • Melbana received USD7.5 million from the sale of its permit WA-488-P; remains entitled to additional contingent payments and royalties • Preparations for exploration wells advanced • Experienced operators (Santos and US Fortune 500 company) • Melbana has no funding commitment to these wells • Melbana would receive royalties/cash+royalties in success case ** See Prospective Resources Cautionary Statement on page 5 7 Operating in Cuba • Melbana’s Block 9 contract area is on trend with numerous operating oil fields (red, blue and yellow areas are all existing oil fields) • adjacent to the giant 11 billion barrel Varadero field • Close to oil export terminal and storage facilities Flat easy country, accessible by sealed roads, close proximity to oil terminals and storage facilities • Fiscal terms attractive • oil sold at international benchmarks • proactive and experienced regulator • Permit has strong legal protections 8 Cuba, Block 9 (1 st well, Alameda-1) Alameda Prospective Resources (100%, MMstb)** Objective CoS* Low Best High Mean U1 15% 24 60 132 71 N 23% 4 9 20 11 Alameda 32% 39 72 128 79 * Chance of Success (independently assessed) ** See Prospective Resources Cautionary Statement on page 5 Marti-5 wellsite (2003) Marti-2 wellsite (2003) • 1 st well Alemeda-1 designed with mild (30 ° ) deviation to allow testing of 3 separate targets • Being drilled adjacent to previous discoveries that flowed oil to the surface • Substantial interval of oil shows encountered to date 9 Drilling status update Flaring of hydrocarbons from 1,832m Oil in the cuttings box Drilling operations at Alameda-1 commenced on 13 September 2021. Oil shows, accompanied by elevated gas readings, started to be encountered soon after the first casing point at 454 metres. Oil shows continued continuously to a depth of 1,130 metres, for a total gross thickness of 670 metres Evaluation continues, but preliminary findings conclude 48 net metres of potential oil and gas pay, but this excludes a total of ~290 metres where poor hole conditions prevented viable logs from being acquired. Some of these excluded zones had good oil shows. Further drilling encountered a high pressure zone ~350 metres higher than anticipated and presented the drilling plan with a number of challenges due to the volume of materials on hand, logistical challenges and the rig’s capabilities. The decision was made at about 1,892 metres to shut in the well to conduct necessary maintenance on the rig and provide it with additional capabilities to better handle the drilling conditions being encountered. This had the added benefit of allowing more time to build up inventory of drilling materials, including barite (an important mud additive). The enhancements to the rig are now complete and the additional supplies of drilling materials that have been ordered are scheduled to start arriving in Cuba this Monday, 29 November. Preparations for the resumption of drilling operations have commenced. 10 Alameda-1 Results so far Alameda-1 has successfully demonstrated the presence of oil in the secondary Amistad objective and the interval above the Amistad objective, which was not previously considered prospective. An oil sample was collected from the mud system at approximately the Amistad objective and reported an API of 15°, lighter than the nearby Varadero field (reportedly 10 – 14° API). However, sampling conditions were not optimum. Oil of this specific gravity is common in Cuba and typically free flowing. Preliminary evaluation of wireline logs conclude at least 48 net metres of potential oil and gas pay, but this excludes ~290 metres where poor hole conditions prevented viable logs from being acquired. Some of these excluded zones had good oil shows. This estimate of net pay increases to ~100 metres when a lower porosity cut-off of 9% is used - a potentially valid option when applied to the fractured carbonate reservoirs encountered in this well. Logs also provided positive indications of permeability in those sections of the well bore. Work is underway to integrate these results into Melbana’s geological model and prepare a resource assessment for these shallow intervals. Zapato Prospective Resource (100%, MMstb) ** CoS* Low Best High Mean Zapato 23% 38 95 214 114 11 Cuba, Block 9 (2 nd well, Zapato-1) * Chance of Success (independently assessed) ** See Prospective Resources Cautionary Statement on page 5 Motembo area Proposed Zapato-1 • 2 nd well Zapato-1 to test a structure identified by strong gravity and magnetic results that aligns with structural interpretation derived from seismic and surface data • The well is adjacent to the shallower Motembo oil field which produced high quality light crude (50 – 64.5° API) • Zapato-1 will be drilled immediately following the completion of Alameda-1 12 Australia, WA-488-P (Beehive Prospect) 50 km Kulshill - 1 Kulshill - 2 Moyle - 1 Sunbird - 1 Kingfisher - 1 Pelican Island - 1 Sandbar - 1 Windjana - 1 Matilda - 1 Lacrosse - 1 Cambridge - 1 Weasel - 1 Lesueur - 1 Berkley - 1 Marina - 1 Sandpiper - 1 Fishburn - 1 Penguin - 1 Polkadot - 1 Sidestep - 1 Bougainville - 1 Shakespeare - 1 Kinmore - 1 Petrel Tern Frigate Barnett Turtle NT WA WA - 488P WA - 544 - P NT/P87 Oil Discovery Gas Discovery Blacktip Beehive Prospect • Permit WA-488-P sold to a US$60 billion Fortune 500 O&G company. Planning advanced for an exploration well (possibly as early as late 2002 but required before August 2023). • Melbana has received an initial payment of US$7.5 million and is entitled to contingent additional payments of US$5 million and US$10 million per 25 million barrels produced (in success case) • Beehive is a carbonate build up, a formation that tends to work big on success (upper estimate 1.4 billion barrels**) • Melbana has mapped similar carbonate build ups to Beehive in its adjacent permits WA-544-P and NT/P87 (Melbana 100%), which also contain the undeveloped oil discoveries Turtle and Barnett Prospective Resources (100%, MMboe) ** Beehive CoS* Low Best High Mean Carboniferous objective 20% 37 416 1,424 599 * Chance of Success (independently assessed) Beehive tightly defined by 3D seismic ** See Prospective Resources Cautionary Statement on page 5 13 Other Permits/Investments • AC/P50 sold to Santos/Sapura OMV. Melbana received cash and is entitled to receive future royalty payments if the exploration well is successful - planning underway for 2022 drilling • AC/P51 under option to Santos/SapuraOMV. If exercised, Melbana would receive similar consideration for the sale of AC/P50 • Tassie Shoal Projects have received environmental approvals (valid to the early 2050s) to build methanol and LNG plants on the Tassie Shoal, using the discovered but undeveloped gas resources available in the area • Melbana has completed the divestment of its holdings in two other ASX O&G companies, Metgasco and Byron Energy, effective 3 August 2021. Net cash proceeds realised approximately $2.9 million AC/P50 and AC/P51 Tassie Shoal Projects Melbana Energy Limited ABN 43 066 447 952 Level 15, 9 Hunter Street Sydney NSW 2000 AUSTRALIA Contact Andrew Purcell Telephone: +61 (2) 8323 6600 Executive Chairman Mobile: +61 488 660 222 andrew.purcell@melbana.com

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