Can Melbana Overcome Formation Damage Setbacks with Amistad-11?

Mobilisation Begins for Amistad-11

Melbana Energy Limited (ASX – MAY) has announced the commencement of mobilisation for its next production well, Amistad-11, located in the Block 9 Production Sharing Contract (PSC) onshore Cuba. The company, which holds a 30% interest and operates the block, plans to begin drilling before the end of November 2025, subject to the finalisation of necessary permits and approvals. This move represents a strategic pivot from the previously planned Amistad-3 well, reflecting a focus on optimising production outcomes based on recent operational learnings.

Learning from Alameda-2’s Challenges

Amistad-11 is designed as an up-dip twin of the Alameda-2 well, Melbana’s most successful producer in Block 9 to date. Alameda-2 initially delivered impressive production rates, peaking at nearly 1,900 barrels of oil per day (BOPD) and stabilising around 1,235 BOPD. However, after being shut in to facilitate drilling of a nearby well (Alameda-3), the formation near Alameda-2 was inadvertently damaged by the fluids used during the shut-in process, causing production to plummet to below 300 BOPD.

Subsequent workover efforts partially restored production to 488 BOPD, but the full repair program could not be completed due to technical challenges such as brine and acid losses to the formation. Since then, Alameda-2 has produced over 36,000 barrels of oil but remains well below its initial output levels.

A New Well with Enhanced Design and Techniques

Rather than attempting further workovers or sidetracks on Alameda-2, Melbana has opted to drill Amistad-11, incorporating all the formation management and well design improvements developed from prior experience. The new well will be drilled from Pad 1, adjacent to Alameda-2, targeting the same reservoir unit but at a shallower depth to optimise reservoir contact and reduce interference.

Amistad-11 will employ a specially developed reservoir drilling fluid that previously demonstrated good penetration rates and high productivity completions. The well is planned to have an open hole completion with the option to run a slotted production liner if needed. This approach aims to maximise the chances of restoring production to levels equal or superior to Alameda-2’s original performance.

Implications for Melbana’s Cuban Operations

The decision to prioritise Amistad-11 underscores Melbana’s confidence in the Block 9 reservoir’s potential, which independent resource assessments estimate to hold contingent recoverable resources of approximately 46 million barrels of oil in the targeted unit. Successful drilling and production from Amistad-11 could significantly enhance the company’s near-term output and provide valuable data to refine future development plans.

Executive Chairman Andrew Purcell acknowledged the operational agility required to pivot drilling plans at short notice and praised the company’s teams and partners for their proactive response. The upcoming drilling campaign will be closely watched by investors eager to see if Melbana can overcome the setbacks experienced at Alameda-2 and unlock the full potential of its Cuban assets.