MEO Australia Limited (MEO or the Company) reported Monday it has executed a Private Placement Agreement with London listed Leni Gas Cuba Limited (Leni Gas Cuba) to raise $1.4 million, with funds to be used to advance MEO’s exploration program on the Company’s newly awarded 919 square miles (2,380 square kilometers) onshore oil block, Block 9 in Cuba.
Under the placement agreement, MEO will issue Leni Gas Cuba 140,716,573 shares at an issue price of $0.0071 (AUD 0.01) per share. The placement of shares to Leni Gas Cuba falls within MEO’s placement capacity and will make Leni Gas Cuba MEO’s single largest shareholder with a 15.8 percent interest in the Company.
Leni Gas Cuba is a specialist Cuban investment company listed in London and has businesses in Cuba ranging from oil and gas interests, tourism and import/export.
Cuba boasts exceptional oil and gas prospectivity. The Block 9 PSC area is in a proven hydrocarbon system with multiple discoveries within close proximity, including the multi-billion barrel Varadero oil field. Block 9 contains the Motembo field, the first oil field discovered in Cuba. An ongoing technical review of Block 9 has confirmed the significant prospectivity of the PSC (Production Sharing Contract) area, with initial analysis identifying recovered oil from a number of previously drilled wells and a number of structural leads and prospects. MEO expects to complete its preliminary assessment of Block 9’s prospectivity and reprocessing of 2D seismic data by mid-year.
MEO is prequalified as an onshore and shallow water operator in Cuba and was awarded a 100 percent interest in the Block 9 PSC on Sept. 3, 2015. Petro Australis Limited holds a conditional 40 percent back-in option.
MEO’s established position in Cuba provides a strong early mover advantage ahead of ongoing strengthening of diplomatic relations between Cuba and the US.
MEO’s CEO and MD Peter Stickland commented:
“We are delighted to welcome Leni Gas Cuba as a cornerstone investor. Leni Gas Cuba’s focus on Cuba is strongly aligned with MEO’s objective of advancing its Cuban interests, particularly with the exploration program at Block 9.
The placement is a strong validation of the significant value upside potential of Block 9 and highlights Leni Gas Cuba’s confidence in MEO’s assets and activities.”