mog vs meo, page-14

Hi guys - Here is an extract from the MEO farminee brochure for the WA-360-P Artemis Prospect.
http://www.meoaustralia.com.au/content/Document/Farmin%20Opportunity%20WA-360-P%20Brochure.pdf

Minimum Terms Sought:
1. Seismic back Costs
Back costs for 100% of actual costs of MEO and Artemis 3D surveys. (Approx US$8 million to be verified by reasonable provision of information, payable at time of execution of Farm-in Agreement)
2. Primary Well Costs
�] 2:1 Promote on primary well up to 50% equity (i.e. 100% of primary well costs would earn 50% equity)
�] Well cost uncapped
�] Production test included
3. Secondary Well Costs
In the event of a successful primary well(hydrocarbons recovered to surface):
�] 1.4:1 Promote for 2 follow-up wells (Promote to be applied to MEO�fs share of well costs. i.e. if earning 50% equity then Farminee to pay 70% of cost of 2 follow-up wells which is Farminee�fs 50% share plus MEO�fs residual 20% share)
** 4. Other
Other terms offered by Farminee to be advised **

The minimum terms offered by mgmnt is laid out above. The importance of having more than one company through the data room = more bargaining power.

8m up front amd MEO will retain 20% (or more, fingers crossed) equity in the first - successful - well and free carried for two further wells.

Component 4 is the interesting one. What other terms is the farminee willing to give. You can bet that the two other permits came up (WA�]359�]P and W-361-P) - not forgetting Tassie Shoal.

I hope the mathmeticians have their pencils sharpened because I think it may be more than just what is outlined in the brochure. If it was that simple then we would have had the ann in Sept I think.