Key Highlights

  • Care and maintenance continued at the Block 9 PSC in Cuba while operations remain suspended, with no lost time incidents.
  • The company received $14.5 million from its former joint operations partner, with approximately $22.7 million (gross) still outstanding.
  • The return of the partner's 70% participating interest remains subject to Cuban regulatory approvals.
  • Cash at 30 September 2026 was $14.0 million, compared with $0.5 million in the previous quarter.

Melbana Energy Limited (ASX:MAY) published its quarterly activities report for the period ended 30 September 2026 on 26 October 2026. The report centres on the Block 9 production sharing contract (PSC) in Cuba, where Melbana holds a 30% interest and acts as operator, and on a partial recovery of amounts owed by its former joint operations partner that lifted cash to $14.0 million.

Block 9 Remains Suspended

Operations at Block 9 stayed suspended through the quarter, with care and maintenance activities continuing. The company reported no environmental, safety or security incidents and no lost time incidents. The 2026 work program has been formally suspended until the end of 2026, and Melbana stated that there are no outstanding work commitments under the PSC.

On the regulatory front, the company continued efforts to complete the return of the 70% participating interest held by its former joint operations partner, which did not cure its defaults in the time available. The transfer remains subject to Cuban regulatory approvals. Melbana, with the help of legal advisers, is also monitoring changes announced by the Cuban Government to judge whether they could improve the efficiency of its operations, and it continued investigating the consequences of the U.S. Department of State designation of one of its contractual counterparties. Its PSC over Santa Cruz is listed at 100%, with the award subject to outstanding regulatory approvals. In Australia, Melbana lists petroleum exploration permits WA-544-P, NT/P87, AC/P70 and WA-552-P at 100%, and an arrangement over WA-488-P under which it receives cash, contingent on certain elections, and payments contingent on exploration success. No interests were acquired or disposed of during the quarter.

Partner Payment and Cash Flow

During the quarter Melbana received $14.5 million from its former joint operations partner. Under the joint operations agreement, the money was applied first to $3.2 million of accrued interest, with the balance going towards outstanding cash calls. The company continues to pursue about $22.7 million still owed on a gross basis, before the $11.9 million provision disclosed in its 2026 Annual Report. Item 7.3 of the Appendix 5B shows the amount net of that provision at $10.8 million.

The cash flow statement shows net cash from operating activities of $2.2 million, which includes the $3.2 million of interest received, against $605,000 of staff costs and $330,000 of exploration and evaluation payments. Investing activities contributed $11.2 million, mainly $11.3 million in contributions from the joint venture partner. Cash and cash equivalents ended at $14.0 million, up from $472,000 at the start of the quarter. Payments to related parties were $111,000, made up of directors' fees. The company said cost control remains a priority during the period of reduced activity, and noted that some staff costs are reallocated into exploration and evaluation, so the staff cost line does not capture the full payroll figure.

Why This Could Matter

The quarter changes Melbana's liquidity position considerably, because most of the increase in cash came from recovering money owed under the joint operations agreement rather than from field activity. At the same time, the amount still outstanding is larger than the amount received, and the company has recognised a provision against part of it, so the final recovery is not settled. The Block 9 interest transfer also depends on approvals outside the company's control.

With operations suspended and no work commitments under the PSC, spending is currently limited, which means the quarterly cash figures are shaped more by collections and administrative costs than by drilling or production.

The Bottom Line

Melbana ended the quarter with higher cash, a suspended Cuban operation and a large receivable still being pursued. Its near-term financial profile rests on collections from its former partner and on regulatory steps in Cuba.