Stumpy - appreciate your comments and agree with all of your...

Stumpy - appreciate your comments and agree with all of your points but can't agree with your opinion that this is a good deal for MEL shareholders.

I was prompted to post because of comments that this was going to generate cash and dividends for MEL shareholders from the development of SM 70/71. This isn't how the deal is structured. This is in effect a secured loan to BYE for field development with very limited upside exposure.

I agree the downside for MEL is protected through the registered interest in SM70/71. So if the MEL facility is drawn and the drill pipe becomes irretrievably stuck as it did at BYE's SM6 well and BYE has to redrill then MEL has a registered interest over the field.

In the event that the field is developed in a timely manner then MEL earns around $1.3M over 18 months and has the right to buy shares at a 10% discount in the future and the option to farm in to other projects.

This deal is a great deal for BYE as it transfers the development risk of SM70/71 across to MEL without diluting its shareholders. As you point out if all goes well then MEL shareholders will have a higher cash backing of 0.2 of a cent taking the share price from 5.5 cents to 5.7 cents (max). Still a far way short of the wind up value of 7 cents and MEL shareholders now have to wait another 18 months to find out. If it all goes badly then MEL has secured rights over a botched up field development that it will no doubt have to put more more capital in to sort out.

Is this really the best deal that MEL could do in this financing environment for oil and gas? I would have thought that MEL could have done a great deal with a company that was going to run out of cash at the end of June (this month). The long term shareholders were told by the Board that there were all of these fabulous deals out there ready to be captured by selling our proven oil and gas rights in NSW. After 6 months of analysis this is the deal?

Do MEL shareholders want the company to become a mezzanine finance supplier to the oil and gas industry?

Anyway this is my last post on MEL. I'm over the saga. Best wishes to all holders. I hope you can retrieve something out of this.