Ann: Response to an ASX Price Query , page-40

Thanks for your appreciation poppi and flight. I like to research the companies I am involved with so it is only one more step to post my interpretation on HC.

I must add a footnote to one part of the post:

Petrofac was involved with NT/P68 having a 10% stake in Heron. They have since, conditionally, relinquished their share leaving MEO with 100%.

There is a third party involved in the TSMP project, namely Air Products and Chemicals Inc. (APCI). MEO have a 50/50 joint development agreement (JDA) with APCI in the TSMP. Notification was on 1 Apr 2004 and subsequent quarterly report:

'The project will be jointly developed and owned 50/50) by Methanol Australia and Air Products. The JDA provides the funding mechanisms to take the project to financial close, based on successful completion of key project milestones. The development effort will draw on the respective skills of each organization working together as an integrated team on the technical, commercial and financial components of the project, including development of the financial structure necessary to raise the debt and equity funding for the project.

Success in securing key gas supply and product off-take arrangements would allow the parties to proceed to front-end engineering and design (FEED) work, which is planned to commence in late 2004.

It is envisaged that Air Products would act as the owners engineer during the construction phase and would be appointed the plant operator for the TSMP.'

The hold up with this project is 'securing key gas supply'.

As part of the Petrofac farmin agreement Petrofac gained 10% of APCI's 50% interest in the construction of the two Methanol production plants. Since the Petrofac farmin agreement was terminated 19 Oct 2009 the 50/50 JV status with APCI in the TSMP has been restored.

Petrofac were granted a 'buy back in' option, expiring on 30th June 2011, to acquire a 5% interest in NT/P68 and an equivalent right in the Tassie Shoal Projects. The option would be triggered with a payment representing a multiple of the Permit back costs at the time.

MEO now have 100% interests in the NT/P68 permit which is due for renewal (expiry Feb 2010) and presently being finalised. MEO will then look for a farmin partner to test its two gas discoveries at Heron and Blackwood.

The NT/P68 extension is probably being processed concurrently with the farm-in deal, along with the preparation of the Quarterly report which is usually published between now and the end of the month.