It means REX promised to do lots of things, bagged their 30% for...

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Dr Daz

2,041 Posts.

22/08/15

09:23

Post #: 15855248
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Originally posted by Kenjul ↑

What does this mean regarding the initial 30% and REX's extra 20% before June 30 2015?

MELBOURNE, AUSTRALIA (21st May, 2015) MEO Australia Limited (ASX: MEO) is pleased to advise the execution of final documentation to farmout of a 30% participating interest in the WA-488-P exploration permit to a wholly owned subsidiary of SGX-listed Rex International Holding (“Rex”). Commenting on the announcement, MEO’s MD & CEO Peter Stickland said: “MEO is pleased to have completed the farm-out of WA-488-P to Rex. Rex’s assessment provides an independent verification of the strong prospectivity of block WA-488-P. Importantly, the agreement significantly increases the potential for MEO to be fully funded through the drilling of Beehive-1. MEO continues to engage with a number of other parties who are also evaluating WA-488-P and additional parties can be accommodated in the Permit by the current agreement.” Transaction Details The execution of the farm-out agreement provide Rex with an immediate 30% participating interest in the WA-488-P permit while MEO retains a 70% interest. The final farmout terms includes options for Rex to increase its participating interest (if MEO has not secured alternative funding) by an additional 10% in return for procuring full funding of a 3D seismic survey over the Beehive prospect, which Rex can increase to 20% if it commits by 30 June 2015 to fund the 3D Seismic Survey and paying MEO US$500,000 cash. Rex has a further option to increase its participating interest in return for procuring full funding of the proposed Beehive-1 well (if MEO has not secured alternative funding). If this option is exercised by Rex or its nominee, MEO will have a full carry through a Beehive-1 well for its residual 20% participating interest.

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It means REX promised to do lots of things, bagged their 30% for doing some desktop work, now MEO are back to where they started, but now holding 70%, still unfunded. Almost as awesome as the Puka deal.

MEO Price at posting: 1.7¢ Sentiment: Buy Disclosure: Held
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