watching paint dry.., page-28

Q:Why are we watching the paint dry?
A:Bcos the farminee has been dragging the chain from the start and must be frustrating the hell out of MEO management!

Here is a little extract from the last quarterly activities report with the critical bit in inverted commas:-

MEO raised $26.9m before costs in mid November to underpin the exercise of the well option for WA-360-P. "This capital raising was initiated when MEO was notified that the preferred Farminees board of directors had deferred its consideration of the transaction from mid-November to mid-December". The risk that the transaction might close after the well option expired and the tight timeframe required to raise this equity capital to preserve value for all shareholders necessitated raising these funds from Institutional and Sophisticated Investors.

Its apalling enough and ridiculous that the farminee had not obtained Board approval when it made its indicative offer and then it compounded this incompetence by taking the issue of importance to MEO off it's November Board agenda. What a joke to make MEO pay for the farminee's incompetence!

MEO have been forced to make numerous anns. where they have had to give us reasons why the farm-in had not been finalised as it had expected and IMO it has always been the farminee's failure to progress the issue. This explains why MEO have been unable to keep to their timeline, it simply was not their fault.


What does all this tell you about the farminee apart from its arroganance and disrespect of MEO? It smacks of a large bureacratic inefficient organisation. Gee that sounds like Petrobras to me!

This extract from 16 Novemeber ann. is also relevant:-

"Commercial due diligence negotiations to finalise all outstanding commercial terms were concluded during the week of October 26th"

That being the case the farm-in agreement should have been available in draft form by the time the farminee Board meeting was held in mid December 2009. If not, why?

This farm-in commenced eight months ago and its clear to me that MEO expected the documents to have been completed and signed off months ago. There is no advantage to MEO in dragging this out.

Unfortunately, once MEO selected its preferred farminee it was locked in to seeing the deal through. So, IMO if you want to take out your frustrations on anyone for the delays it should be the farminee not MEO.

ANZ