eni time line, page-9

Hi Mick

I think it is a sign of the times that investment in junior explorers, even with great potential, is drying up in the present economic climate.

With the low volumes and monthly T20 figures, it shows that most holders are riding out the storm.

It appears the technical investors are keeping the VWAP around 15c and are trying to hit the 14.5c low again, but just can't make it. On the other hand LT investors are using this opportunity to accumulate so we are back on the plank again.

There are two scenarios that would improve the SP:

An upturn in global sentiment where the market as a whole will improve and bargain stocks will be snapped up.

MEO will no doubt be a part of this because of the previous form it has shown in the pump and dump roller-coaster but it needs a kick start.

A global upturn could be some time off, but I still feel a lot of negativity, mainly political, has been orchestrated to fuel the present correction in a bear market.

Nevertheless, the increasing global debt accumulation is untenable and needs to be courageously addressed by the global community at all levels.

A positive release by MEO regarding development in their projects.

MEO have told us that the drilling of H3 will not take place until at least 2Q 2012 so the BESBS traders will not appear until a rig is acquired by Eni and a spud date is set early 2012.

On the other hand, a negative release could work the other way but I am not sure where this would come from, though I am sure the anti-MEO posters could think of some to back up their deleterious posts.

In the present economic climate, with cash in hand, a company has the upper hand when bargains become available.

The present management has shown that they are conservative when handling SH funds and will not waste money. They have also shown sound business sense by preferring to keep negotiations confidential until agreements are reached. Anything could be being discussed behind closed doors.

So, as in all companies, LT investors need to have trust in their management team or look at investing elsewhere.

The fact that MEO may be looked at as a cash box, to be broken up, is always on the cards but with the present JVs in place this could be difficult logistically.

A potential attack on the company would also need to stimulate the interest of those LT SHs who have sat tight since A#1. A large number of shares have also changed hands since then, mainly around 20c, so, at what price a major shareholding could be generated is debatable.

We have had a discussion about Bentley who has so far spent about $4.8m for their 23m shares. At today's prices it would cost a further $30m to increase this by 200m to hold a >50% holding. Whether or not they have the desire to do this or they would find enough sellers is the question.

As time goes on the task will become more difficult as new SHs accumulating at sub 20c will be reluctant to offload their shares when there is a reality of two spuds in 2012.

Perhaps BEL really do see MEO as a having viable LT prospects, as do so many others.

For a long time Tassie Shoal has held my interest in MEO. This has not changed and this solution continues to be a topical subject, even after all this time. My view has again been re-enforced by an article in the:

* Aug 2011 GasToday magazine *

I am not sure of their source, it must be from one of many MEO articles, but it states that:

'..... It is anticipated that construction will begin on the (Tassie Shoal) project in 2013 and be complete by 2016.'

I know this has all been said before but the build-up this time, since the new management team took over in 2008, it appears to be more positive.

The article also states:

'The Tassie Shoal project will include:

Two concrete structures (approximately 170 m long, 85m wide and 32 m deep each) with one of the methanol production plants already in place and precommissioned to be floated into position and sunk in 15 m water depth;

Storage tanks within the concrete gravity based structures to store methanol, condensate, fuel, intermediate products and fresh water;

A single point mooring for loading methanol onto export tankers;

Two offshore moorings for use by service boats, tugs and visiting fishing vessels;

Seawater cooling systems with intakes on the side of each concrete structure and return pipelines extending into deep water to the east of the shoal;

An LNG plant will be pre-installed and pre-commissioned on a self-elevating steel platform;

Separate LNG storage in a conventional storage tank mounted on concrete caisson, which will act as both transport barge and support structure (similar to the methanol gravity based structures);

LNG load-out via a jetty or a special HiLoad mooring and buoy system; and,

Gas supply pipelines from Evans Shoal or other gas fields to Tassie Shoal.

We can make of this what we will but, once a gas supply is eventually found, the TS project is sure to get off the ground.

IMO, for what it is worth.

#:>))

PS: I wish I was there with you dipping a fly in the Moy.

Tight lines:)