Thanks stumpytrunks, appreciate your input. We are in agreement...

Thanks stumpytrunks, appreciate your input. We are in agreement although I missed out on the Exchange Traded Bond of $2.2m.

My figures on drilling costs are a little different but not material:
BP Drilling costs are estimated at USD$10.8m (from BYE announcement 9/7/18). MEL share estimated at USD$1.33 for the first $10m +(10%*.8)=USD$1.413m.
SM74 estimated at USD $4.4m to MEL according to yesterdays announcement.
Total therefore to MEL (assuming all goes well) is USD$5.813m or A$7.86m at an exchange rate of .74.

Now I should state again that I have no real interest in this from a MEL perspective, but am curious from the BYE perspective.

MEL has assets of cash, Bonds, and various BYE assets. Also something in the Cooper Basin which I think we can ignore as it is not easily convertible to cash.

Apart from cash and the ET Bond, MEL's assets are
(1)BYE shares (which they could sell to realise cash, although this seems a strange thing to be doing while at the same time increasing interest in a particular BYE asset - also note that BYE SP is quite low at the moment and liquidity also quite low);
(2) BYE Options (worse than shares really, you would have to spend money to exercise them and then try and sell them at the current depressed price)
(3) BYE Convertible note (convertible into BYE shares at MEL's discretion, again to rise cash they would have to sell the BYE shares)

Given they have $6m in cash they need to raise at least $2m. This could be by selling the Bond, doing a CR/Placement, borrowing the money (might be difficult), or selling down their equity interest in BYE.

The other possibility is that BYE might at its discretion repay the Convertible Note early. This would have the effect of funding MEL's interest in SM74. Effectively this means BYE extinguishes the Convertible Note liability by offering a share in a potential future asset (SM74). I am not sure why BYE would want to do this, though, as they have plenty of cash due to SM71.

I will be interested to see how this plays out.

Thanks again.