Given the amount of money ENI are throwing at NT/P68 (just $10m for shooting and processing of seismic at Blackwood, and they have to spend $120 million+ on drilling two wells at Heron before they earn ANY equity), I think even the most cynical/sceptical followers would have to concede, this is a lot of mullah!
The mindset of a major is always to replace reserves cheaply and maximise production, profitably. Simple. MEO fit help ENI fulfill this requirement.
MEO have struck a good deal, no doubt about it. But if anyone thinks that ENI are troubled about stumping-up $300+ million for 75% of 6Tcf gas with a development plan in proximity to their existing (some stranded, ie Evans Shoal) assets, then they are dreaming.
The net 4.5Tcf of gas to be acquired by ENI will sell for ~ 45 BILLION DOLLARS, (assuming non-HC gas revenues are sold as methanol).
Context, is what it is all about.
You say;
"I have observed risk money come back into the market recently, but none of it has gone into MEO."
I AGREE. That is because the market does not (yet) know/understand the significance of what MEO are working on. Everybody heard the story a decade ago at Chris Hart's time, but the world, gas, CO2 are all very different beasts now. Just look at what ENI paid for Evans Shoal to confirm this view.
Heron is worth lots to MEO, but TS is an enabling technology at the right time at the right place. Opening bids please.
Eni buying MEO would be too distracting for them.
MEO Price at posting:
18.5¢ Sentiment: LT Buy Disclosure: Held
