Even if the drilling programmes didn't produce I hope HC readers had a better understanding of the technical side of the ASX releases at the time.
Very disappointing times for MEOmites and I am in the same leaky boat we have travelled in together for years now. After numerous failed drilling programmes even the backbone of the MEO business model appears to be going soft as the farmout policy dries up. Major companies appear to be rationalising or pursuing new techniques such as CSG.
Some time ago I said MEO should be looking at income producing projects and, even though the NZ venture looks fairly basic, it is actually producing, with potential upside, which is a first for MEO. Pity a similar venture could not have been put together before the Indonesian blowout to cover potential losses from the sole drilling. Now it appears that it is difficult to renew the Indonesian PSC lease.
The Barossa field is being drilled at the moment but there is already sufficient gas at Evans Shoal for the TSMP. The permit expires in September and there will have to be a time when the Oz government insists that permit holders put forward a plan to process the gas. The NT/P 48 JV will need come to agreement on how to develop the high CO2 gas. Tassie Shoal is still the best option with buyers ready. All that is needed is feed gas and I am sure MEO will be throwing in their hat.
I don't know if the company can recover but NZ is a step in the right direction and at these prices MEO still has LT potential. At least until a decision is made about the stranded gas surrounding Tassie Shoal, which is the most economical solution. Along with the full value of Puka being established.
Good luck with your decisions.
#:>))
MEO Price at posting:
2.7¢ Sentiment: LT Buy Disclosure: Held
