If anyone has seen MEO's AGM presentation on Artemis then you'd be aware how desperate Petrobras was to win the farm in. As MEO says it's the best farm in deal ever achieved by an Australian company.
For this to happen though Petrobras had to get board approval which was the main reason for the delay in the farmin. That was before they did their massive capital raising so at the time they would have been cash strapped.
Now I can imagine a geo asking the board for an initial $100 million up to $235 million to drill between 1 to 3 wells on the other side of the world where they had no presence. Once they stopped laughing, they'd have said show us a business case and it had better be bloody good. Well the rest is history. Now Petrobras is the 2nd or 3rd biggest oil & gas company in the world. They didn't get that way by making stupid mistakes. Companies that make stupid mistakes disappear, e.g. BNB.
Regarding MEO's capital raising. The bulk of the placement was to North American and UK based institutional investors. Now if Artemis doesn't live up to expectation they could lose 50% of their investment within 2 weeks. If it does live up to expectation then they could double their money within 2 weeks. They've either given them a hospital pass or put them in the gap. Now MEO didn't need the money. So either they're stupid or extremely confident about Artemis. If they want to develop Tassie Shoals they're going to need significant finanical support. If they can grease a few wheels by giving overseas investors a handsome return on their investment that would help a lot in getting future financial support.
As I see it Petrobras and MEO are either extremely confident about Artemis or complete idiots. The market or more precisely the day traders think it's the latter. Personally I'm betting on the oil & gas companies which should know what they're doing.
The funny thing is the day trader is selling to me at 52c and in 2 weeks I'll sell back to them at $1.02.
MEO Price at posting:
52.5¢ Sentiment: Buy Disclosure: Held