There is a greater than 50% chance that both wells will come up dry. In any event, MEO will hold a non-operating 50% interest in block covering the Rayong Basin.
Don't get me wrong, for $7m+, not a bad deal, existing (recent 3D), great operator, close to other fields, shallow drilling, great fiscal regime, but at the end of the day, its a relatively high risk punt.
Finally, not only are we basically paying for the S-1 well, the 100mmbo is across 23 leads. Unless you want to drill 50 wells, most of these will remain undrilled even when Krudd is wheelchair bound and still threatening to challenge Gills.
MEO Price at posting:
28.0¢ Sentiment: LT Buy Disclosure: Held
