It's a big coincidence, but since I wrote the original post on...

It's a big coincidence, but since I wrote the original post on this, MPO announced the agreement with Origin (I have been predicting this for weeks)

Exctract from this months "Pillman's progress"

The company will go from an explorer, to a producer, overnight. Target production phase 1 is 1.5Tj per day.
The revenue value of 1 petajoule is $3mAUD. And a production rate of 1.5Tj per day is expected as a peak. So lets say 1Tj = 3k per day. So they will be selling about $4.5k per day in gas –this is expected to grow to 5-6tj per day (18k per day). This gives an anticipated annual revenue of 1.64m (at the bottom end) and 6.5m (at the top end).
This number is 25% of the total production expectation as Helm and OCA pick up the rest of production as part of the farm in deal - costs are therefore minimal.
Given all costs are covered by helm this is a reasonable revenue stream
Calculators are at http://www.santos.com.au/investor/conv_calc/default.asp
What do they do and why care
Molopo (in the bit I am focusing) are about to go into production for a thing called CBM (Coal Based Methane) – CBM makes up XX percent of the total QLD and NSW gas intake – they use it to fire power stations, heat stuff up, natural gas etc – it’s big business and there is ongoning demand for the next century for it.
What makes them smart. Molopo, instead of going it alone, signed agreements with Helm Energy and Origin Energy (remember the old BOC Gases?) that mean that other people pay for the exploration and building the wells/sites etc, in return for a chunk of the production revenue. This is an excellent position to be in. The agreements also cover most of the Molopo expenses and there is a future position that Origen can take, by taking on a future development JV with them to build more wells. They call this “Farm in”.
How will they make revenue
The largest producer in the area is Origen Energy, and Origen are 50% of the JV . . funnily enough they also own the nearby pumping stations for gas, and the Gas Pipeline – they also have forward contracts for the next 15 years with AGL and other companies for the supply of Coal Based methane. They have also put forward the growth for the CBM areas to largely come from the Mungi and Harcourt fields.
The development of these fields was given a major boost in December 2002 when OCA, in conjunction with its parent company, Origin Energy Limited, signed an agreement with AGL to supply 340 PJ of gas from CSG fields in Queensland over 15 years from May 2005. Approximately 52% of this volume will be supplied from OCA owned CSG interests.
CSG supplies approximately 25% of Queensland’s total gas demand. OCA participates in 3 of the 5 CSG fields contributing toward that demand and now produces CSG in excess of 30 TJ/day.