It's an interesting one. It makes sense, but at the same time it's a case of 'all eggs in one basket'. I'd like to see us provide additional financing in return for a 10% or so stake in SM71. That way we get direct exposure and cash flow to help fund future operations.
The other interesting potential option is EGO - they require a farm in partner to drill two high impact wells, and have floated the prospect of giving up a share of their production assets. That really fits MEL's new MO - producing assets with exploration upside. I imagine that if that was to happen that it would be part of a three way deal, as we simply don't have mountains of cash post the 2.5c return of capital.
MEL Price at posting:
4.1¢ Sentiment: Hold Disclosure: Held
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