new strategic direction and repositioning of meo

So all of the Barossa partners are still committed to developing a high CO2 (i.e. 16%) FLNG for Barossa and Caldita's 3.5tcf.

http://sts.aiche.org/webfm_send/462 - see slide 10. article is dated Feb 2014.

https://au.news.yahoo.com/thewest/a/17369266/santos-floats-plan-for-timor-sea-gas-field/ - SK Group (major equity holder) pushing hard for FLNG and not pipe to Darwin....  would be great to see cost comparison between high co2 flng and TS...

So Barossa / Caldita's gas unlikely for Darwin LNG.  SK Group paid $520m for 49.5% two years ago plus 3 x drilling campaign currently underway so SK Group will be looking to have a clear path to obtain RoI...

Prelude doco shows that managing high Co2 on flng may not even be possible so no proven high CO2 concept...

TS is a better fit for Barossa/Caldita then ES as ES is on the upper envelope of CO2

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Check out Santos' long list of discoveries all ripe and ready for piping and supplying DLNG.  "If we can work with others we could be looking at multiple trains if you bring together Lasseter, Crown, Poseidon, Barossa, Petrel, Tern and Frigate. There is lot of gas in the area, and that provides multiple options," Santos chief executive David Knox said.

This is why Santos sold out of Evans Shoal - Santos knows it is not cost effective to pipe ES to DLNG.  Sanots, as a co venturer in DNLG, is desperate to expand the second DLNG train.  THEREFORE, Santoswould never sell 8tcf (ES) if it was commercially viable to pipe this gas to Darwin.  This article below is very recent - 22/8/14...

http://www.argusmedia.com/News/Article?id=923557

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Eni will also be desperate for an RoI for ES.  Eni is also a co venturer in DLNG...  However, Conco Philips is a major player in Poseidon....

All of a sudden to much gas is coming on line for DLNG and Itcheys...

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My take of the Annual Report is that no deal is off the table and the most likely end state is that ENI will not elect to take up heron or blackwood next month.  that UBS will try and extract the best deal but the most likely deal is that ENI will buy TS, Heron and Blackwood outright.  MEO will have some working capital and the new gem in the ground will be an EXISTING producing field.  The question is how much is ES, Heron and Blackwood worth to ENI??  Low ball $25m High Ball $125m.  Eni whilst exposed have MEO very exposed due soley to the depleted cash reserves.  The TS dream is over for MEO and a new strategic direction to 'reposition' MEO will now try to be executed with capital obtained by divesting from TS and related acreage.

IMO this decision has already been made by the board and we are just waiting on ENI to hopefully come to the table and offer something acceptable to the board.  the MD will be let go shortly after any such deal coming off.  With regards to management, yes 8 dusters but that is also 7 farm ins - after that where the drill bit goes is up to the major who farms in.   so meo management and technical bodies have done their.  if heron had come off the MD would be raved about on HC.  just didn't pan out that way.  the major stuff up was there were only 7 farm ins in those 8 dusters - unforgivable.

so i see the SP returning to 2 cents again post Apache and ENI decisions to walk.  UBS will most likely pull off a deal as ENI really has no where else to go...  just comes down to much capital can be realised by  divesting TS.

Adl

PS - please forgive typos as still getting over big day yesterday celebrating hawks win.