IMO one is not going to be looking at over $1 for some time. The...

IMO one is not going to be looking at over $1 for some time. The value comes from a steady income cash flow and some dollars in the bank. A successful drill is what starts you off on that track.

That's not to say there won't be volatility one way or another should the drill prove positive or negative. IMO It's just not going to leap to $1.17 overnight, no matter how much I would like that.

If successful - the SP in all probability will rise to a value less than the projected value to MEO of the 'find', this may well increase on execution and cash flow to MEO. Further increases may be expected as further positive results come through (from other drills). However the end result is usually less than total projected value. In short, there are a lot of variables to consider, but if positive result, you may well make a profit from present SP.

If I may I'll use an example of the only other small O&G company I own shares in. At present they are around 0.620, (under 400m shares) they have a steady income of approx $85m pa, they have touted that this years Div will be 0.047. They have over $200m in the bank. They also have a number of upcoming projects, one in particular may prove company altering if successful, but that's another story. Like most companies today, they are also undervalued even though they have a return and far lower risk SP wise.

My point is, if your suddenly thinking your on track for an instant 4 or 5 times multiplier then you may be mistaken. Although sentiment is a factor, the SP usually accounts for execution only. EG: Farm In = X value, Successful Drill = Y add value, 'Well' producing and money in bank = Z value add. Then one simply adds more of the above process for any new successful Well's.

From my research before I jumped in on MEO (which was made a lot easier by the excellent information supplied by other posters here, again, kudo's to them), I considered it at first glance a tad over priced given MEO's circumstances. The more I went into it, I found the reason for that is the interest created in the probabilities that MEO has been working hard for. The farm in benefits in that CR won't be required and the seismic testing that MEO has completed on various projects. This all amounts to higher probabilities of success.

One must however keep in mind that even high probabilities is not a recipe for a guarantee. MEO at this stage is still a high risk, high reward venture. A few successes here though may well turn the risk to a much lower volume and the reward to a higher one, but that doesn't come overnight.

Sorry the above might seem over-simplistic, I'm bullish on MEO's potential, I just don't want to see anyone new to the 'market' losing their shirt on possibilities.

For my 2 cents I look at a George Soros quote "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." My first consideration on a higher risk punt is "how much you lose when you're wrong" and go from there. My guesstimate would be around the mid to high teens. Could be wrong though, hindsight will be the only certainty. Although I must say, if things go south for this expectation, I won't be selling, I stick around for the next few at the very least.

Good luck with your decisions.