MEO Australia Limited ABN 43 066 447 952 Level 17 500 Collins Street Melbourne VIC 3000 Australia Tel: +61 3 8625 6000 Fax: +61 3 9614 0660 Email: [email protected] Website: www.meoaustralia.com.au ASX Release MEO executes NT/P68 farm-in agreement with Eni Australia Ltd Key Points: Executes binding agreements for Eni to earn 50% in Heron gas discovery by funding two wells Eni has option to exit after first well Option granted over Blackwood discovery to earn 50% interest by funding minimum 500 km2 3D seismic and one well in the Blackwood area Option granted to Eni to acquire additional 25% interest in permit in consideration for full carry of MEO to Final Investment Decision (FID) in Heron and/or Blackwood Payment of US$75m cash to MEO upon achievement of FID for either Heron or Blackwood MELBOURNE, AUSTRALIA (18th May, 2011) MEO Australia Limited (ASX: MEO; OTC: MEOAY) is pleased to announce that it has completed the NT/P68 farm-out process. Binding agreements have now been executed with Eni Australia Ltd (Eni). The agreements are subject only to Australian regulatory approvals. The agreement involves Eni earning 50% in the Heron gas discovery by funding MEO?s costs for the drilling of two wells in the Heron Area. Eni will be the Operator of the permit. Eni has sixty days after the first well has been drilled to elect to either drill a second Heron well or withdraw from the agreement. Eni also has an option, exercisable within 60 days after the first Heron well has been drilled, to elect to earn 50% in the Blackwood gas discovery by carrying MEO?s costs of acquiring a minimum of 500km2 of 3D seismic and drilling one well in the Blackwood area. Eni has a further option to acquire an additional 25% interest in both discoveries by funding MEO?s share of the work programme required to reach a Final Investment Decision (FID) in either Heron and/or Blackwood, upon achievement of which Eni will make a one off bonus payment of US$75 million to MEO. This agreement is in line with MEO?s strategy to partner with leading companies to unlock value in its portfolio. Following successful appraisal of the Heron and/or Blackwood gas discoveries the Joint Venture will evaluate all potential commercialisation paths for the resources. In a success case, MEO will receive a full financial carry for all exploration and appraisal drilling and all costs associated with bringing the Heron and/or Blackwood gas discoveries to a Final Investment Decision (FID) and receive a one-off cash payment of US$75 million in return for 75% equity in NT/P68. J?rgen Hendrich Managing Director & Chief Executive Officer Attachments: - Location Map, Heron Cross Section, Heron Resource Estimate and Permit Cross Section, - Eni Press Release
MEO Price at posting:
20.5¢ Sentiment: Buy Disclosure: Held
