Cash Burn

I think most agree that Meo's prospects have turned since Febuary this year. PK appears to be doing well and appears to have faith in the company - investing, through his wife, about $50,000 in buying shares so much so that I think his wife is now a top 20 shareholder. We also still do not know who has taken a farm ins in some of Meo's tenemenets - all very positive developments/news. Delaying expenditures through the recent ASX announcements is also positive - if POO increases probably makes Meo more better abled to get more interest in its developments (or at least possibly tap financial markets). The only real issue for Meo too me relates to cash burn in the interim and how much money Meo holds in cash and whether that cash can last a year or so. At the moment it appears touch and go, but I believe Meo's prospects beyond that are positive, so the cash burn issue is one around how Meo can negate that over the next year so shareholders can reap the benefits/rewards if the farmins lead to a commercial discovery.

Meo has improved its cash burn outlook by delaying expenditures and, unlike a number of other small caps, it does still hold cash - greater than $5 million in the last quarterly. Defending the MSMN takeover proposal is more of an annoyance on cash burn. I don't know what the cash burn has been since the last quarter but I am hoping it hasn't been significant, and that PK has a strategy for assessing cash issues going forward.

The market has been quiet so I am only speculating here but I am hoping the farmouts have nothing to do with ENI. I suspect they are with PTTEP or another non-ENI entity, because if this is the case, and just in case Meo's cash burn is too high to allow Meo the time for it take advantage of a recovery in POO and future tenement developments via the farmins, I hope PK has a strategy for getting some cash now. If cash is required, I suspect it will be some form of capital raising - I doubt a farmin partner would allow Meo's tenemnets to go back into the open market as they may not get them in a contestable market. In other words, Meo may need to offer say 10% of its shares to them as part of some capital raising strategy. My optimism is that Meo has more than one predator - ENI has been named by some on this site - and in the event the farmins are with another entitiy then this could address Meo's cash issues going forward. I don't see this as an issue, if this does occur, because it would be nice, were the farmins with a respected company, to get a respected company as a top 20 shareholder.

Obviously Meo can sell some of its assets to raise cash - I would probably start with the NZ assets or those in Cuba - and that might also do the trick in addressing any short term cash shortage issues. MSMN is proposing to sell Meo's assets so obviously, in case cash becomes an issue, Meo can sell some of its assets itself to raise cash but I would hope and like to see it done as a last resort.

And for the avoidnace of doubt, MSMN is not the answer here. So to any MSMN posters on this site don't use this post by me to flog a dead horse as to why MSMN is good for Meo. Not interested in that view because I will not sell to MSMN. To Meo shareholders your thoughts appreciated.