MEO Presentation, Sydney 15th Sept 2009 Artemis Prospect ~12 Tcf Mean Un-risked: $3.65 Risked: $1.17 per share. Assumptions Recovery Prospective Resource Factor: 60% Equity interest: 20% after farm]out Unit Value: US$0.50/mcf, FX: A$0.80/US$ Geological Chance of Success: 32% Issued shares 417.3 Treasury stock 10.1 Unlisted Options 13.4 Total: 440.8 m fully diluted My Calculations: Risked $1.17 x 440.8m = $515.736m to MEO MOG 15% & no cost on first well = $386.77m likewise CUE. No. of MOG Shares fully diluted about 291m (refer Dec Qtr) Valuation per MOG share = $1.32 No. of CUE shares fully diluted about 699.35m (refer Dec. Qtr) Valuation per CUE share = 55.3 cents While we have to recognize this value is derived from the assumptions above and as we can see there has been a change in the exchange rate, it does give us some guide to the value of Artemis to MEO, MOG & CUE. Note this valuation is only considering the Artemis Prospect & ignores all other company assets. Please do your own calculations to ensure I have made no errors in calculation. The right farm out partner could see all 3 perform after the announcement in the short term. MOG has a gap in its chart that probably will be filled while CUE has filled a recent gap. May be prop sellers in both MOG (19 cents majority of sell orders created today between 10.10-10.19 today, but could be traders as well) & CUE (25 cents, big order for 763,200 created 7.56am today but could also be an overseas selling order) who could be trying to accumulate stock. A short term spike in these stocks could give traders the opportunity to gain shares for free out of trading a short term spike in these stocks on the back of MEO announcement. Regards Buffett PS Whilst CUE & MOG both have 15% interests I prefer MOG for the leverage offered although it will probably have to raise funds soon. Strangely MEO has sat in a trading halt while the other 2 stocks traded.
