cost for zeus-1 well, page-9

Hi Spawk

There are 2 components here,

1) Working Interest (WI)
2) Revenue Interest (RI)

MEO's WI is 20% and RI is 35% in WA-361P.

For example lets assume that the final well costs are say US$20m, then MEO's cost is 20% of this, i.e. US$4m (or A$6.1m)

However if Z-1 is as big or bigger as intrepreted pre-drill, then depending on the field size & negotiated sale price of gas, MEO gets 35% Revenue interest.

With a discovery of say 18tcf & MEO's 35% share after 20% gas recovery rate is 1.26tcf times US$4.5 (or A$7), gives them $8.8b unrisked value.

MEO had funded the cost of seismics & shared the site survey etc, so that can b added as outgoing expense to their working expense.

So the return on investment is multifold, A$8.8b/A$6.1m (or US$4m). Thus the high risk-high reward.

All will b revealed as we get closer to 3000m by hopefully by friday nxt week IMO.

What they haven't told yet is the area of Z-1 covers in sqkm. I am interested in the initial Gross:Net sand ratio for both targets & we'll still have a decent TCF size on our hands be it 30m net sand or 60m+. The gross column will b higher.

Any volunteers who want to work that out or call up Jurgen?

cheers