woodside - limitations and opportunities, page-19

Blurt,
Id hardly call it unprecedented farm in terms...hahaha...
But I agree... It was a real solid deal...

You think too much,
Why would CUE want to scare off PBR given that we are 15% free carry of Artemis...
Your logic seems off, your thinking around it...
I will explain this shortly...

I will tell you right now,
Sure MEO hold a 25% stake but the CAPEX required on discovery will leave MEO with two options...

1) they will need heavy funding which will involve issued capital which as you know is dilutive...
2) they will have to reduce their stake...

Debt does create leverage for the firm, but this will be offset by dilutive capital...

MEO started 2007 with 134million listed shares, and now has almost 480 Million shares...

MEO will end up with a billion listed shares on production liquidating those valuations...

SO in a sense MEO's stake is not that much bigger than CUE's
... Seriously, thats how it is...

For CUE financing terms will be different with diversified production revenues to offset, that cover much of the CAPEX...

As for your Spanner in the Works Comment...
Petrobas (not MEO in a sense) wanted CUE to sign off on two side agreements, of which were,
1) relating to a possible LNG development
2) sought to vary specific provisions of the current joint Venture agreement.


For 1), LNG DEVELOPMENT IS THE PREFERRED OPTION...
It is to do with 2) that we are not privy to...

MEO had to sign off on the side agreement as they have 60 million bucks US waiting in the wings as bonuses, and as the signed off that with the farm out terms... Just because MEO signed it doesnt mean it was the best option for us minnow partners....
far from it as it would appear... MEO Got a pretty good deal on the farmout terms, and the bonuses acted as a way of securing MEO on the side agreement ...

MOG act as a miniture oiler who just want the well to be drilled...
acting as a price taker...

Obviously CUE failed to sign the side agreement because it was not in their best interests...

But yeah,
sure you would jump to the conclusion that CUE are holding the project to ransom...
your just being cynical...
think about it...

Artemis is game changing...
Not having our 15% stake of this luxourious prospect Now rather than later would make us worse off...

remember that CUE needs Petrobas offshore LNG expertise for the project to work aswell...




.^sc