My reasoning is that for MGN to get over the line in the purchase, the ES JV will need a lot of convincing that it is in their interests to pour money into developing the permit.
The downstream infrastructure, in which the PPs may not be interested in participating, would need to be set in concrete before the PPs would be assured of a return.
With the delays in the settlement of the purchase I wonder if MGN are able to convince the ES PPs. MGN have had trouble raising the funds for the initial purchase and are forecasting a loss for 2011 so the capacity to fund their business plan is less than convincing.
Perhaps they will get over the line but MGN might be in a situation like we were with CUE at 360P. One of the PPs may decide they want to off take their share of the gas and sell it elsewhere.
MEO have the preliminary design in place and environmental approval. Whilst ES would be a good source of gas I am sure if nothing comes of a supply from that area MEO will continue, at least, with Heron and Blackwood to underpin TS.
And we will continue to wait for news.
#:>))
MEO Price at posting:
23.5¢ Sentiment: LT Buy Disclosure: Held
