PRIVATE & CONFIDENTIALMEO Australia LimitedPlacement of up...

PRIVATE & CONFIDENTIAL
MEO Australia Limited
Placement of up to
A$32.65m
November 2010
E.L. & C. Baillieu Stockbroking Ltd
Lead Manager
Preliminary Term Sheet Sales Memo
Overview
Transaction: Fixed Price Placement
Issuer: MEO Australia Limited (ASX:MEO)
Lead Manager: E.L. & C. Baillieu Stockbroking Limited
Placement Agent: Casimir Capital (United Kingdom, North America)
Country: Australia
Sector: Oil & Gas
Offer Details
Offer type: Placement of up to 62.8 million new fully paid ordinary shares to investors exempt from
disclosure under s.708 of the Corporations Act.
Offer size: Up to A$32.65 million
Offer price: A$0.52 per share
Discount: Last closing price (22-Nov-10):
Discount to last close:
1 week VWAP:
Discount to 1 week VWAP:
2 week VWAP:
Discount to 2 week VWAP:
A$0.585
11.1%
A$0.58
10.4%
A$0.57
8.8%
Use of proceeds: The funds raised will be utilised to strengthen MEO?s current cash position and may be
applied for working capital and future acquisitions.
Capital Structure ? post Placement
Shares: 540m (477.2m pre raising) + 10.4m options (pre-AGM) (various ex prices and dates)
Market Capitalisation: $280.8m (at A$0.52 per share)
Cash: ~A$104m (A$71m pre raising) ? pre offer costs, A$0m debt
Enterprise Value: A$177.2m
Baillieu Research ? recommendation (7 August 2010)
Baillieu Research has a current short and long term BUY recommendation and price target of $0.75 per share.
The following paragraph has been extracted from the Baillieu Research report dated 9 August 2010:
MEO Australia shares offer investors exposure to two high-risk, high-impact oil and gas exploration and development
plays in offshore Western Australia and the Northern Territory. The potential rewards upon exploration success in
WA-360-P (Artemis project) or upon commercial realisation of the Tassie Shoal methanol and LNG projects are very
significant, but the risk of capital losses is also significant. Due to the significant upside upon
exploration/development success, we rate MEO as a short- and long-term BUY. However due to the high risks, the
stock is only recommended to professional investors or investors with a very high risk tolerance.
Important dates *full timetable provided at the end of this term sheet
Trading halt: Tuesday 23 November and Wednesday 24 November 2010
Offer closes: 4pm Wednesday 24 November 2010 (Baillieu reserves the right to close the offer early)
Acceptances due: 9am Wednesday, 24 November 2010
PRIVATE & CONFIDENTIAL
MEO Australia Limited
Placement of up to
A$32.65m
November 2010
E.L. & C. Baillieu Stockbroking Ltd
Lead Manager
Preliminary Term Sheet Sales Memo
Investment highlights

Material gas projects near existing infrastructure

25% equity in ~12 Tcf Artemis prospect - drilling December
2010

Proposed Tassie Shoal development hub
o Robust economic solution for all undeveloped gas

TSMP sequesters CO2 into methanol derivatives

LNG project approved for low CO2 gas

100% equity in two NT/P68 gas discoveries
o Seeking farminee to appraise Heron gas discovery

Balanced Board and experienced Management team
Company description
MEO Australia Limited is focused on developing material gas processing projects in provinces with established LNG
infrastructure. The company is currently focused on the Bonaparte Basin and Carnarvon Basin, Australia.
MEO is currently focused on its Artemis prospect (WA-369-P) off the north west coast of Australia:
 Petrobras farmed in for 50% interest (April 2010)
o Paying 100% of 1st well (to US$41m cap, MEO
o MEO received US$31.5m cash, plus US$7.5m in seismic related back-costs
o Success case

Paying 70% of 2 additional wells (MEO carried for 20% PI, to US$62m cap/well)

MEO receives additional US$31.5m cash payment
 MEO has 25% participating interest & Operator
 All approvals in place to drill Artemis-1
 Rig handover expected +- November 11th, 7 day tow to location
ion
PRIVATE & CONFIDENTIAL
MEO Australia Limited
Placement of up to
A$32.65m
November 2010
E.L. & C. Baillieu Stockbroking Ltd
Lead Manager
Preliminary Term Sheet Sales Memo
Board and Management
Nick Heath
Non-Executive
Chairman
Appointed May 2008
Engineer
>30 years with ExxonMobil
Past APPEA President
Colin Naylor
Chief Financial Officer /
Company secretary
30 years at Woodside,
BHP, Rio
Jurgen Hendrich
Managing Director &
Chief Executive Officer
Appointed July 2008
Geologist, Investment
Banking
12 years at Esso Australia
13 years financial markets
Robert Gard
Commercial Manager
22 years with ExxonMobil
Greg Short
Non Exec Director
Appointed July 2008
Geologist
>33 years with ExxonMobil
Retired 2006
Ken Hendrick
Implementation
Manager
>40 years with large
companies
Michael Sweeney
Non Exec Director
Appointed October 2008
Barrister, arbitrator and
mediator
Practicing Barrister
10 years Mimi (Mitsui /
Mitsubishi)
Dave Maughan
Exploration Manager
35 years with ExxonMobil
Stephen Hopley
Non Exec Director
Appointed October 2008
Financial Services
background
14 years with Macquarie
Bank
Retired 2003
Errol Johnstone
Chief Geoscientist
29 years with Exxonmobil
PRIVATE & CONFIDENTIAL
MEO Australia Limited
Placement of up to
A$32.65m
November 2010
E.L. & C. Baillieu Stockbroking Ltd
Lead Manager
Preliminary Term Sheet Sales Memo
Timetable Date / Time (Melbourne)
Placement
Trading Halt Tuesday 23 November and Wednesday 24 November 2010
Bids due:
4pm Wednesday 23 November 2010
(Baillieu reserves the right to close the offer early)
Acceptances / CARD Forms due: 9am Thursday 24 November 2010
Announce Placement and recommence trading: 10am Thursday 25 November 2010
DvP settlement (T+3): Tuesday 30 November 2010
Allotment and quotation on ASX: Wednesday 1 December 2010
** Timetable is indicative only and subject to change
Baillieu contacts
Corporate:
Stephen Macaw
+61 3 9602 9205
[email protected]
Daniel Baohm
+61 3 9602 9357
[email protected]
Rebecca Lambis
+61 3 9602 9207
[email protected]
Dealing Desk:
Please contact your Baillieu
representative
Research:
Ivor Ries
+61 3 9602 9275
[email protected]
Disclaimer
The information in this presentation has been prepared for information purposes only and may be changed at the absolute discretion of MEO
Australia Limited (ASX:MEO) without notice to you. The information has been prepared based on information available to it at the time of
preparation. Whilst MEO has taken reasonable care in preparing the information, MEO does not make any representation or warranty as to the
accuracy, correctness or completeness of the information herein. To the maximum extent permitted by law, none of MEO, its directors, employees,
agents or contractors or any other person accepts any liability for any loss or damage whatsoever arising from or in connection with the use of or
reliance on this document or its contents.
This document and its contents do not constitute a solicitation, offer or invitation to buy, subscribe for or sell any security in the United States or in
any other place or to any other person to whom it would be unlawful to make any such offer or invitation. As distribution of this document outside
Australia may be prohibited or restricted by law persons outside Australia who come into possession of this document should seek their own
independent advice. This document may not be transmitted, copied or distributed, directly or indirectly in the United States or to any US person
including: any US resident, any partnership or corporation or other entity organised or incorporated under the laws of the US or any state thereof,
any trust of which the trustee is a US person or any agency or branch of a foreign entity located in or resident of the United States. By accepting
this document you agree to be bound by these terms.
The information in this document does not take into account your financial objectives, situation or needs. Before making any investment decision
you should consider, with appropriate advice, whether an investment in MEO is appropriate to your financial objectives, situation and needs