The planned $20 million stock market float of Western Australian oil and gas assets, spearheaded by veteran resources executive Craig Burton, has been thrown into uncertainty. The delay stems directly from renewed geopolitical tensions, as former US President Donald Trump threatens to reimpose harsh sanctions on Cuba.
Geopolitical Storm Hits Local Energy Play
The company at the heart of the situation is Melbana Energy. Mr. Burton, through his listed vehicle Comet Resources, had been working to acquire Melbana's Australian portfolio and list it as a new entity. This deal was a central part of a broader $20 million capital raising and initial public offering (IPO) intended to breathe new life into the assets.
However, the entire structure is now under a cloud. Melbana's most valuable and prospective asset is not in WA, but off the coast of Cuba. The company holds a significant stake in a highly promising Cuban oil exploration block, where a recent independent report confirmed a potential resource of 362 million barrels.
During his presidency, Donald Trump dramatically tightened the US embargo on Cuba, making it extremely difficult for foreign companies with Cuban interests to operate without risking severe American penalties. The Biden administration had eased some of these restrictions, providing a window of opportunity. Now, with Trump leading in polls and vowing to "reinstate all sanctions" if re-elected, the risk profile for any company with Cuban exposure has skyrocketed.
Deal in Peril as Investors Get Cold Feet
This political uncertainty has had an immediate and chilling effect on the proposed WA float. According to market sources, potential investors have backed away, spooked by the prospect of the new entity being tainted by association with a Cuban asset that could become a major liability overnight.
The timeline is critical. Comet Resources announced the planned acquisition and IPO in late 2023, with hopes to complete the process in the first half of 2024. That timeline has now slipped significantly. The due diligence and fundraising efforts have effectively stalled, awaiting clarity on the geopolitical front—clarity that may not come until after the US election in November.
For Craig Burton, a respected figure with decades in the resources sector, the delay is a significant setback. The strategy was clear: use the cash from the IPO to aggressively develop the WA oil and gas assets, which include interests in the Beehive prospect in the Bonaparte Basin and the EP 145 permit in the Canning Basin. The Cuban asset, while valuable, was a longer-term and higher-risk proposition.
Broader Implications for Resource Financing
This situation highlights the fragile nature of resource financing, where international politics can derail local business plans thousands of kilometres away. Australian investors and fund managers are notoriously cautious about jurisdictional risk, and the threat of US sanctions is one of the most potent red flags.
The delay leaves Melbana Energy's Australian assets in limbo and deprives the local energy sector of potential investment for exploration and development. It also serves as a stark reminder to the Australian resources industry that even projects firmly located in domestic territory can be vulnerable to global power plays.
All eyes are now on the US political race. The future of this WA oil float, and the development of its associated assets, may hinge not on drilling results in the Canning Basin, but on the ballot results in Florida and Pennsylvania.
