csg sector comparisons, page-10

Folks

I posted this on the ESG thread, perhaps more of relevance to MEL for the time being.

cheers
--------------------------------------------------------

Agree MEL they dont have enough cash ($3.5m) & each well costs apprx $750k to drill so the cash burnout could b faster depending on the exploration program.

As for MEL, I believe an offer based on the their 3P reserves could b appropriate, IMO.

I'll run couple of scenarios from recent deals in the sector,

1) QGC-SHG deal: QGC valued SHG's 3P reserves of 1097 PJ @ 0.74c for a transaction value of $811m.

2) AGL-MPO deal: AGL valued MPO's 3P reserves of 700-800PJ @ 0.46-0.53c. 700 PJ @ 0.53 gives us $370m transaction value.

3) Santos-Petronas deal: STO's 3P reserves of 1600PJ were valued @ $1.32 for a transaction cost of $2114m. This deal was the upper end of the spectrum & set the ball rolling for later date transactions albiet at lower rates.

IMO, looking at MEL's 3P reserves of 1607PJ, should one were to use a average ranging from 0.30 to 0.50c ($/GJ) the transaction value ranges between $482m to $803.5m.

At the end of the day its the buyer's call, however the fundamentals & logic don't change.

Just my thoughts for sharing.

Please DYOR, I know I did mine.

cheers