the boy who cried wolf, page-15

Well yesterday was very painful to watch.

I was very surprised that after Heron failed to flow that the share price stabilised at 18c. Again after yesterdays trio of announcements I was again very surprised that the share price settled in the mid 7c range. There was also some strong buying.

Not much discussion on the blackwood option extension.

I think some people are grossly underestimating how much this Gurame has cost MEO. The original plan was to drill for 35 days (untested) at a cost of $35m. Yesterday's announcement is that the rig will be released on 20 December. By my calculation this is approximately 93 days that MEO had the rig. Now extrapolating $35m over 93 days to get a total cost is not exactly that accurate given intial mobilisation costs/demob costs but it give us an indication....

$35m/35 days (initial est)* 93 days = $66.4m.

Even if the cost is $55-60m. IMO, management have been reckless with precious shareholder funds and they should never have risked so much on one well.