why interested in meo?, page-6

Hi Shrewd crude - your reasoning in general makes sense to me, and if the cash backing is 5 cents, then MEO is worth 5 cents as a default position - if you look at it as though it were just a bank account.

However, it is pursuing potentially large possibilities. The advantages of their floating LNG plant is plain to see, but indeed that only comes into play if they have something to process in it and I don't see it as a material value element unless or until they locate a "big 'un".

For me, the potential each time it undertakes activities is to reveal a monster gas field - and the map is a bit like the old maps of unknown areas of the sea - "here be monsters". They're pretty much all monsters out there and no-one suggests they have all been found by any means.

So, the investment run-up builds to see who is farming in and how much they are putting up and so how much exploration will be done as a result.

If it is quite large, the higher price will probably persist while they do their work. If it is small, it will probably fade a bit, but not to 5 cents.

Given it closed at 9.9 cents on Friday, on a great day's volume, after brief flirtations with 10 and 10.5 during the course of trade, there should be a fair bit of action again from Monday.

Having gone to 30 cents in January for that activity segment, there is nothing to prevent it doing it again - or more, or less. What height the SP reaches is pretty arbitrary, really, but the surges do not exhaust themselves in a day, because it is a real value proposition, not an imaginary one.

You buy because you want to be in if favourable events unfold. If they do, you are set. If they do not, you want to be out, but not forever, simply until next time a new farm-in of cash takes place and the seismic surveys and drills crank up again.

If it was onshore, I would not be interested at all. When you appreciate some of the statistics on offshore gas fields, especially NWS, it is not hard to see the value proposition.