Most of the upcoming announcements can be found on the ASX releases but the sequence of definite announcements as I see it is:
The confirmation of all regulatory approvals regarding the farm in process have been finalised. FIRB approval has already been given (28 June).
The last hurdle is the receipt of the final regulatory approvals from the Designated Authority for the transfer of the 50% permit equity of WA-360-P. Once this has been completed the binding agreement with Petrobras is complete.
Following this will be the payment of US$39m to MEO by PBR consisting a cash bonus of US$31.5m and reimbursement of MEOs share of the seismic related back costs of approximately US$7.5m. This payment must be paid within 30 days of receipt of regulatory approvals.
Unfortunately the recent downtrend of the FX US/AUD has turned as again as it has now stands at 88c making it AU$44.3m. But then this is always in flux. Most transactions are being made in US$ anyway.
On the upside MEO will have received their tax credits for the 2009/10 FY to carry forward without having to declare the PBR payment. I wonder if they will remember to claim for their Fiesta costumes too (work related)?
The purchase of an extra 5% equity in WA-360-P from Rankin Trend (MOG) will be confirmed. The total cost of this is US$7m. A US$1.5m deposit has been paid but the remaining US$5.5m will be paid once regulatory approvals have been made. The purchase was dependent on FIRB and other regulatory approvals for PBR's farmin. This additional equity will be free carried for the drilling of A#1.
The balance will be paid once the 5% equity transfer to MEO has been completed.
We will get confirmation of the finalization of the purchase of an extra 15% equity in WA-361-P from Gascorp for US$1m. The payment will be made once regulatory approvals are received and the permit shares will be MEO 50%, Mineralogy (RDI) 35% & CUE 15%.
The announcement of the rig and expected drilling date of A#1. We have been told that the option over the rig has been executed and the contracts are being finalised.
This has been a mystery for some time, akin to the farmin partner. Either the Songa Venus or the Maersk Nan Hai V1 were named as the likely candidates in the drilling application but it has been difficult to determine the dates either will be available as they seem to be fully booked until 2011. I expect this will be made known once the farmin agreement is finalised. In any case the latest MEO reports have indicated late 2010.
I remember the SV was first expected to drill Z#1 in late October 2008 but delays held it up until mid Jan 2009. I've got my fingers crossed that it is a cyclone free season if the spud date is held up.
The A#1 site survey has been completed.
After all approvals are complete and all accounts are received and paid MEO's cash assets will be notified in the annual report.
AU$36.0m (less Sept quarterly expenses) plus 44.3m = AU$80.3m. From this will be paid the remaining US$5.5m + US$1m equity purchases = 6.5/.88fx = AU$7.4m.
So MEO will be left with about AU$72.9m (US$64) less Sept quarter costs. The only immediate cost we know about is the equity purchases and 20% of any A#1 drilling costs over the 41m threshold.
NT/P68 - Gaffney Cline & Associates was commissioned during the quarter to undertake resource certification for both Blackwood and Heron using the Schlumberger report findings. The report is expected to be completed this quarter so it will be published and a formal farmout will be launched.
MEO have stated they have already received unsolicited offers to farm in and are looking for a major O&G partner. Hopefully there is sufficient gas present to feed both the methanol and LNG projects proposed for the Government approved Tassie Shoal projects.
Hopefully these projects will finally get underway.
There are also the anticipated 'New Venture opportunities' which our proactive management team has already evaluated.
These are important to help buffer MEO from the possible chance of disappointment at Artemis - which is the risk we take.
One other announcement I am not sure about is the potential securing of gas feeds for the Tassie Shoal projects. Negotiations with the operators of surrounding stranded gas fields are on-going.
There is also the potential farmout of WA-361-P. It will be interesting to see if any further seismic studies will be carried out or enough data is already on hand for furhter exploratory wells.
I hope this helps and I am sure there are additions/corrections other MEOmites would like to make.
#:>))
MEO Price at posting:
32.5¢ Sentiment: LT Buy Disclosure: Held
