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22/08/15
17:51
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Originally posted by Scarpa
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When I wrote the earlier post I had realised that Rex hadn't exercised its option to attain another 20% farmin share because it hadn't committed to the 30 June 2015 deadline. So my comments around when we could expect Rex activity was based on whether it exercised its 10% option by 30 June 2016, and my comment around December this year was a hope one. If Rex does exercise the 10% then drilling might follow thereatfer - if not back back to square one but the uncertainty of Rex's activities remains (and the latest Rex announcement probably puts it in the catgory of unlikely to commit). I also felt sometime ago Rex was hedging its bets - it had nothing to lose from entering a farmin because there was a statement in one of the annoucements, from recollection, that if Meo could not fund its share then Rex could walk away (with a cash strapped entity such as Meo it was essentially a low risk strategy for Rex). The only way Meo can get Beehive up IMO is to find in another farmin partnet to take another share in Beehive, so that share plus Rex share = drilling.
Hence my disappointment at Meo not exercising the preemptive strike right for Shannon. If it did do it IMO it did give hope to Meo of securing a revenue stream from a low cost production well which would possibly provide cash flow until POO improved well (assuming any production was viable for the onshore well)
Anyway, in terms of Meo's future the sooner Shell sells its stake in ES the better (but the low POO doesn't help in attracting a buyer). Cuba can provide a left field outcome, but that will depend on whether any US companies use Meo as a startgy for securing entry into the Cuban market (again the low POO would not help such a strategy). So all in all this is a wait and see game IMO - the one benefit I do see Meo having unlike other spec exploration entities is that it does hold some cash - the only question really is whther the market turns before the Meo cash runs out.
DYOR, but agree that Meo hasn't been too forthcoming on disclosure since the Rex announcemnet of 19 August, but reading the farmin agreement, as described in the announcemnets, Meo should have said it in early July that Rex had not exercised the 20% option.
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Low POO and expected continuation for a couple more years or untill a major Geopolitical event occurs...means no cash for stranded Gas.....even if its in trillions......Unless its at huge discounts.....
People like Shell want to be the Wolf not the prey......so could be waiting a long time.....
Seems Meo doesnt like to communicate bad news from REX....bad news travels slowly...
Lucky Meo has cash and can hold on.......because the wolfs are waiting to get good prospects for extremely cheap prices ...or no deal.....
I thought that Meo could have been a little wolf.......in NZ.
No worries still plenty of cash...
Dyor