a question for the weekend??, page-34

Lets console ourselves with a look at the possible terms of the farm-in agreement. I think we can draw some assumptions from what MEO has done or said.

We have been told that some twenty-six or so interested parties have inspected the data that was available on Artemis and we can assume that WPL and CVX were amongst that group and most likely would have made indicative bids. I think it is also reasonable to conclude that they would have been prepared to concede a 20% interest to MEO to ensure that their competitor didn't trump them. Lets remember that MEO indicated that it was prepared to allow the farminee upto 50%.

There would have been obvious cost advantages to both WPL, CVX (and to MEO) in terms of extracting economies of scale from their Pluto and Wheatstone processing plants/pipelines. IMO the only way for another bidder to overcome these advantages would be to offer a better deal to MEO allowing it to retain more than 20% of Artemis so as to become the preferred farminee. So, my suspicion is that one of the details of the farm-in agreement will provide MEO with around 25% of Artemis. If it transpires, then holders can expect an increase of around 33% in the valuation of their shares.

IMO that will make all this delay and waiting worthwhile.



ANZ