Here’s why the Melbana Energy share price is ripping 19% ahead today

The Melbana Energy Ltd (ASX: MAY) share price is on course to end the week on a very positive note.

In morning trade, the oil and gas exploration company’s shares are up 19% to 12.5 cents.

Why is the Melbana Energy share price racing higher?

Investors have been bidding the Melbana Energy share price higher today after the company released an update on its Alameda Reservoir in Cuba.

According to the release, independent reserves and resources certifier McDaniel & Associates has completed its resource assessment for the second reservoir encountered by the Alameda-1 exploration well – the Alameda structure.

It certified the following:

• 3 billion barrels of oil in place
• 148 million barrels of Prospective Resource
• 56% chance of discovery

What does this mean overall?

This means that the first two reservoirs have now been independently assessed to contain a combined 4.8 billion barrels of oil in place and 267 million barrels of prospective resource.

But it may not end there. The company reminded investors that there’s still a third structure to add into the equation in the future. McDaniel’s resource assessment of the third and final structure encountered is still to be received.

Melbana Energy’s executive chairman, Andrew Purcell, was very pleased with the news. He commented:

This is a pleasing and very material addition to the considerable prospective resource estimate previously announced for the Amistad structure in the upper sheet. It reminds us all of the potential scale of the reservoirs that were encountered whilst drilling the Alameda-1 exploration well – a total volume of estimated recoverable resource that we expect will increase further again once the estimate for the final structure, Marti, is available to us.

The post Here’s why the Melbana Energy share price is ripping 19% ahead today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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