The stake increases Leni Gas Cuba's interest in the 2,380 square kilometre onshore oil block, Block 9 production sharing contract (PSC), as MEO has a 100% interest in it while Leni Gas Cuba also holds a 15% interest in Petro Australis, which has a conditional 40% back-in option in to Block 9.
Leni Gas Cuba acquired 140.7mln MEO shares at a cost of A$0.01 per share though a placing, stumping up A$1.4 million (£730,000) in total, which MEO will use for exploration and assessment of Block 9.
“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,” MEO said in a stock market announcement on Monday.
“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 area, with initial analysis identifying recovered oil from a number of previously drilled wells and a number of structural leads and prospects,” it added.
“MEO expects to complete its preliminary assessment of Block 9's prospectivity and reprocessing of 2D seismic data by mid-year,” the Aussie firm said.
David Lenigas, the chairman of Leni Gas Cuba, described its stake in MEO as a significant strategic investment in the Cuban oil and gas sector.
“As previously stated, early 2016 will be an exciting time for this asset, with the completion of major reviews currently underway by MEO of Block 9 that will hopefully confirm its oil and gas potential.
“Block 9 already has demonstrated its oil potential, hosting the Motembo field, the first oil field discovered in Cuba and recent MEO announcements confirm the presence of good oil potential from previously drilled wells on the block,” Lenigas said.
“The low operating cost environment in Cuba supports strong profitability levels even in current oil price conditions and the improving diplomatic relations with the US is expected to drive substantial foreign investment in to the oil sector over the coming years," he added.