meo - where to from here, page-15

Hi ANZ and Yoshi

Let me explain regarding my thoughts on Tassie Shoal. The reasons for my assumptions is through my interpretation of the following statement:

'Additional analysis and discussion was required with respect to the potential implementation of an integrated LNG project in the event of exploration success'.

1 'Additional analysis and discussion' would have to be something other than Artemis. Artemis would be the main topic of the negotiation so would not need 'additional discussion' IMO.

2 'potential implementation of an integrated LNG project' to me is the integration/inclusion of the Tassie Shoal project in the deal. I didn't mean that gas from Artemis would be piped to Tassie Shoal, lol, but existing resources in NT/P68 would be used. Hence my question whther or not 'exploration success' related to Artemis or NT/P68 prospects.

On second thoughts Blackwood and Heron have been declared gas finds but still neeed to be explored further and developed - perhaps this is the 'exploration success'. Who knows:)

The fact a new player was chosen could have been existing local players have already got agreements in place for Bonaparte ie:
. WPL & partners with Sunrise and plans to build a FLNG in that area.
.Santos recently entering into a deal with GDF Suez which will see the French company buy a 60% stake in the Petrel, Tern and Frigate fields with a view of developing an FLNG project. This is some way from Tassie Shoal and, like WPL, will not be as neat a solution as TS (ie incorporate a methanol plant).

I wouldn't be surprised that, given the go ahead, a bid to farmin to Evans Shoal by the new player could be on the cards, down the track of course. Don't take my word on this because I am not sure of the status of that permit. There is also the temptation of the adjoining new release, NT09-1, which closes 3 December 2009 or 29 April 2010.

Also ANZ you say:

'its a concern to me if they are talking about an LNG facility on shore in the vicinity of the permit as it will be very expensive'.

I agree, not only would it be expensive but it would need environmental approvals. Mention is only made of FIRB approvals. If a potential farminee wants to set up an LNG train I don't think they would get approval by the commitment date. Such approval would also need to be given for it to be included in the final deal to be presented to the board of the farminee IMO. Also why build trains when two companies are already doing that for gas they don't yet have - especially WPL?

Like you say Yoshi the alternative could be a tie in with WPL or Chevron. I mentioned this - if the drill is successful this will probably happen. WPL would compete with Chevron for any potential gas as they have both orders to fill.

Finally, on the question of the Commitment to drill date. Conflicting information has been bandied around regarding this. The two dates are 31st December and 31st January (Jurgen himself said 1st February in the Ahab32 interview). After contacting management a while ago my understanding of this is that only a commitment to drill has to be set in place by 31st December. This has been stated on a number of releases and management are very aware of the date. The drill date can be anytime after that. I wonder if someone can re-clarify this point at the AGM.

Notwithstanding this, I am sure that MEO's WA-360-p's partners (MOG and CUE) would like to see the farmin agreement go ahead, so will be flexible IMO. I don't think they would knock it on the head just to go through the seismic, data room, negotiations, shareholder angst themselves, especially as the deal is so tantalising close. I feel the change in MOG's attitude towards the farmin could have been because of perceived delays in such a complicated, but robust, deal.

If the deal falls through then that is another matter - but that was always on the cards - MEO is a speculative stock.

Let's hope everything goes well for the deal and MEO gets a blue tinge - as shown recently by the upgraded LVR rating by the banks. In the mean time we need to be patient still. For usually short term holders this would be excruciating but the choice is yours (not meaning to sound condescending).

I am sure that the time will come (as it has in the last few months) to sell at a profit:)

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My opinions are from my own research only. I reach conclusions and make my own decisions accordingly. I advise all people to do the same research and come to your own decisions when trading:)