all is not lost, page-12

Will Santa come this year?

I have resurrected this thread because I don’t want to keep on going over the same old story.

MEO can’t take a trick and the only saviour in the short term is Gurame and hopefully all goes well with the production test.

The three announcements today have left the poor old MEOmites with little to cheer about.

The high CO2 gas was expected in the upper zone at HS1 and they have struck the same permeability/porosity problems. The HS1 well site did not find any natural fractures and it looks like Heron South will not give up the gas lightly. I wonder if they will be able to find a sweet spot somewhere in the Greater Heron.

Eni now have 60 days to decide on whether or not to pay 100% costs of a second well at Heron to earn 50% equity in the permit. This will coincide with the decision about Blackwood which has the same terms, 100% costs to earn 50% equity.

Should they commit to these two wells they will then have to decide on taking the JV to FID for a further 25% equity which will leave MEO with 25% (and $75m) but at no cost to them. Alternatively MEO retains 100% Heron and has the results of a pretty comprehensive HS1 programme.

This seems a long way off ATM but at least we will know in a couple of months where they intend to go.

Thailand was as expected. We lived in hope which is all we are left with at Gurame – the last chance saloon.

The WA-454-P farmout is still to come and we may need any gas there to shore up the TS projects but I still feel Eni will look at Tassie Shoal for the gas at Evan’s Shoal and we still have Blackwood. This was included in the farmout deal in case Heron failed IMO.

Now we look towards Gurame. Failure here could see the SP go back to post GFC days which would be devastating for LT holders. The math has been done and success at Gurame would mean a valuation to MEO far greater than Heron but we need to prove up the PSC.

I have been saying for years that MEO need to find a gas supply. We have found it at Heron but we can’t get it out. Blackwood looks a better prospect but is still speculative until we revisit it.

Gurame is our only way forward in the near term but we still need to prove the reservoir will produce. This is the backup plan we didn’t have post Artemis. Let’s hope it works otherwise it will be back in the doldrums for a while.

In the mean time my shares go back into the bottom drawer for now whilst I wait for the next chapter.

I'm going to put up the Christmas tree now - whether or not Santa is on the way is the question?

The important thing is I still have reasonable health and a loving family to share my life with. I have also met some great people, even anonymous ones.

#:>))