To All,I was able to get to the AGM. My first for MEL so can not...

To All,

I was able to get to the AGM. My first for MEL so can not compare to previous years.

1) There were approx 50 in the room excluding directors, but there were some 5 to 10 MEL staff there as well. I got the impression the attendance numbers were higher than previous years. At least one LNG representatives was there as well.

2) The clear takeaway message and my overall impression was that MEL's board recognise and are preparing for the change from an exploration company to a production company. To this end they have restructured the board to include Koroknay and Gil. The retirement of DJ from the MD role and the introduction of Peter Henderson is part of this. It was mentioned that the change in the MD position was first discussed at the board level in the middle of 2010. The search for a suitable MD was done with the involvement of McLoughlin and Johnson as well as the board members. IMO I think this will ensure a smooth transition. DJ will still be involved on the exploration side as he has a lot of expertise in the CM basin. His contribution to Metgasco was clearly appreciated by those at the AGM.

3) The farmout of part of PEL16 to a suitable partner is on the backburner. The uncertainty surrounding the RSPT and also the fact that Kingfisher needed more definition were cited as reasons by the chairman. I have the impression this is the least favoured commercialisation strategy at the moment. The 3 other commercialisation strategies seem to be the focus: 1) Richmond Valley Power Station approval from NSW gov, with FID in 2011. 2) Lions Way Pipeline environmental studies completed. 3)LNG options are under study - Gladstone, Port of Brisbane, Floating LNG off NSW coast. It was mentioned that Peter Henderson has experience with floating LNG projects.

4) On the CSG- It was mentioned that Thornbill was being drilled using optimised drilling techniques, based on experience from other wells. I had not realised the significance before that the Thornbill wells are on the same fairway as the demonstration well Corella 11. This allows a straightforward expansion of reserves into the future not only for PEL 16 but will also for PEL 13. A smart move.

5) On Kingfisher- Mel have carried out a lot of testing and I get the impression they are are even more confident that this is a significant discovery and will help them develop not only the Kingfisher field but other conventional gas targets in the basin ( Rapville seems to be a key target). The delay in the seimic testing due to the wet weather was mentioned but the contractor is now back in the field. MEL believe the gas system extends deeper than the final depth of KF1 and intend to drill KF2, to prove continuity of the Kingfisher field as well as ascertain the gas column potential below the existing KF1. KF2 will be drilled to 2700 - 3000m.

In summary, the next 1 to 2 years will be a critical time for MEL, I sense more urgency on the commercialisation front. How the board manages the transition to production and the funding remains to be seen, but I think the board is better equipped now to tackle the challenges.

Cheers DB