catching up

It has been a while since I have posted in the MEO forum but I have managed to glance through the threads now and again, through the medical fog. It is good that we have a wealth of people who are willing to impart the results of their research and expertise, thus enabling the rest of us to keep in touch.

I cannot add much to what has already been said and JH has clearly outlined the position of the company in an interview with the RB Milestone group on pages 4-6 their latest newsletter

* RB Milestone newsletter: 20-12-2011 *

This is the company who held the Hi-Alpha Mining Investment Conference in NY where MEO was a presenter. The interview should be cross-referenced with the ASX release at the time:

* HiAlpha presentation. *

and the earlier:

* RB Milestone Research Coverage. *

What stands out to me is the increase in the skill base of the management team. This is typified by the latest team member, Mr Robert Zammit.

Robert Zammit (from the RB interview) has '>20 years at ExxonMobil. Lead negotiator for sale and marketing of XOMs share of LNG from Gorgon project'.

From the ASX release:

* 1 Dec 2011 *

It states Mr Zammit's primary role will be 'to work closely with the Commercial Manager to assist the Company’s efforts to monetise the Tassie Shoal gas processing projects and also seek markets for MEO’s gas discoveries subject to successful appraisal drilling.'

To have yet another high profile executive join the team shows the company is going places. Robert Zammit has already shown his planning skills in removing the encumbrances of Air Products with an immediate termination fee of US$1m plus a payment of $6m which is contingent upon partial sale of MEO's interest in the Tassie Shoal Methanol Project. AP gets the first $1m of any sale proceeds and the balance is shared 50/50 until AP reach $6m. Whist, on the face of it, this appears to put the value of the TSMP project at US$14m this is a false assumption as the ability to negotiate with 100% equity is a great bargaining tool. It is fairly obvious that TSMP and TSLNG is to be an integral part of the future processing of stranded gas in the Timor Sea so now MEO will have an unencumbered bargaining tool to bring to the table.

Air Products were never part of the TSLNG project and have been sitting on the fence waiting for something to happen for some time re TSMP. Daz correctly predicted some months ago that Air Products were no longer interested in TS any more and has been proved to be right. Now that AP are out of the way MEO will again have 100% ownership of the three separate projects being two Methanol and one LNG. This is a far better platform to negotiate the future of TS with the present and potential future JV partners. Even if they have separate owners in the future, to retain a share in each project would be ideal, or even retain a share in one Methanol and the LNG plant and transfer ownership of the other TSMP plant to cover the costs.
Perhaps Eni's 100% owned company * Ecofuel * will open an Australian office - or be closely aligned to MEO.

The permutations are endless.

All this does not help the SP as the bear traders always manage to put such releases (along with the extension to the Ensco 109 availability researched by ronsteib and later confirmed in the ASX release) in a negative light. It seems we are taking two steps forward and two steps back ATM but not to worry, our time will come.

After my last post in November greymatter asked my opinion regarding the SP should Heron3 produce a commercial flow. Nobody can answer this as there are too many other factors to take into consideration.

Should H3 flow gas then it can be assumed that MEO will end up with 25% of the gas, free carry to FID and US$75m in the bank but that will be down the track. Of course MEO's SP will have gone through the BESBS process and traded on the roller coaster once again. The usual sell off will occur pre-spud and it is up to the LT investor, and the state of his/her steel undies whether or not they can withstand the grind of another drill. Of course LT investors could become traders for a while and work the BESBS to our advantage, as JH did with the CR pre Artemis.

If successful at H3 the traders will jump back on board but, more importantly, we may attract some LT institutional. The reduced risk in the stock will bring stability and become less attractive to the traders.

Like all stocks the SP has been kept down to increase the %ge margins. In the macro sense the global financial woes are being used for massive volatility in the market which is good for the seasoned ST traders but a minefield for those less experienced retail individuals. On the other hand MEO has been walking the plank ever since the Artemis duster so it hasn't had much effect on the MEO faithful LT holders. Like hotbid notably pointed out (* in Post: 7510555 *), there is a hardcore of holders, whether by design or otherwise, who are unwilling to sell without a decent profit and have probably been accumulating during 2011. Conversely MEO is currently a good trading stock because it is trading at cash value and has gradually improved its fundamentals over the year to lessen the risk by no longer being a one trick pony.

For the LT shareholder it is all positive leading into 2012. The SP is not considerate of the 9 projects now in hand. Let's not forget in 2007 MEO, through Tolhurst and WH Ireland, activated a CR of $1 ps based on Heron 2 alone when NTP68 was the sole permit held by MEO with the Carnarvon permits still around the corner. A Tolhurst report at the time can be found:

* here *

Interestingly enough, in 2007, JH was involved with Tolhurst and Cambrian Oil & Gas so he knew quite well before taking on the roll of CEO in May 2008 that MEO is, indeed, a hot potato.

The latest WH Ireland report can be found:

* here *

Read alongside the:

* Bailleau report *

we can see that there are different ideas regarding MEO and, like in the MEO threads, all based on different agendas.

Traders can mock the LT investors and vice-versa, but we all have different trading/investment styles so isn't it better to understand these multiplicities and live and let live? I don't like to see anybody lose money and I hope the HC community feels likewise, I know most of us are here to help one another. A good debate, with differing opinions, is great but provocations don't add much value.

We have at least two wells coming up in 2012 but, before these, the first two quarters will see a lot of negotiations regarding Tassie Shoals. MEO with 100% equity will again be in the driving seat, as they were once Petrofac left NT/P68 prior to the renewal of the permit. Whilst only a junior player, MEO holds the trump card in Tassie Shoal with have top negotiators IMO.

There are a number of questions, such as I wonder if ENI regards the 25% CO2 gas in Evans Shoal LNG quality, if Woodside will ever get Sunrise off the ground and if Santos will build the pipeline from Barossa to Darwin? It will be interesting to see the end play. Even though MEO has investor fatigue, they now have some very active JV partners on board and the jigsaw is finally coming into place.

I agree, orstock, 2011 has been a struggle but here's hoping the last year on the Mayan calendar brings us better luck. There will be plenty to talk about and I hope I can participate a little more than I have in the last couple of months.

In the mean time I hope all HC investors; especially the MEOmite community have a happy Christmas and good fortune in the New Year. Our patience is due to be rewarded.

Please DYOR.

#:>))

PS

gjw1957 - Before going overseas I hope you found a good home for that pooch you walked off its paws prior to Artemis!

TevezFC - who cares what we are doing provided we have good friends and family around us with the odd good game of soccer/football or cricket to cheer from the stands.

moorookamick - have a good Christmas. Perhaps we can meet up Dunkineely or wet a line in the Moy next year.