Could it be an instance of history repeating B&S? Let's take an...

Could it be an instance of history repeating B&S? Let's take an impartial look at MEO's recent history.

Petrofac farmin to NT/P68:

20 Apr 2007: Speeding ticket - 72.5c on 16 April 2007 to 91.5c, 20th Apr - reason NT/P68 farmin negotiations.

30 May 2007: Open 1.07 - Close 1.145 - TH

4 Jun 2007: Farmin ann - also 42m Inst CR (1.00 per share) during TH and advice of similar retail CR.

6 Jun 2007: TH ends - open 1.40 - High 1.43 - close 1.37.

27 Jun 2007: an upper resistance of 1.50 is reached during this phase.

26 Aug 2007: a lower resistance of 86c is hit for no apparent reason apart from traditional SP downturn towards 1.00 SPP price and obvious profit taking.

26 Aug 2007 to 2 Jan 2008: Roller coaster starts again on the back of the drilling of Heron 2. SP rose from 86c to 1.62.

2 Jan 2008 to 23 Jan 2008: High of 1.62 to a low of 20c on the back of the disappointment and problems with the Heron 2 drilling .

RDI Alliance:

30 May 2008: speeding ticket - 29c on 26 May to 48c, 30 May - reason (amongst others) WA-361-P (Zeus) farmin negotiations. (Also, of note, Tolhurst Ltd put a targeted price of 1.98 PS).

2 Jul 2008: SP 47.5 - TH

9 Jul 2008 to 10 Mar 2009: SP falls from a high of 47.5 to a low of 6.2c. This was due to initial disappointment in the farmin agreement which was doomed to failure, especially during the GFC which affected all companies. There was a little rise (17.5 to 35c) due to the anticipation of Zeus but this was a last gasp at the time.

From the above it can be seen that the larger company, Petrofac, provided more momentum than the alliance with the private company RDI, trying to use MEO as a stepping stone.

Of course this can all be seen at a glance on the chart but it is good to see the affecting fundamentals.

I'm thinking that it will be third time lucky because:

. The proposed farmin partner is a major international Petroleum and Energy Company. This will bring the reputation, financial backing and expertise needed to progress MEO's projects.
. The economic outlook is better along with lng and methanol being cleaner fuel than some typical energy sources now in use.
. Whether it is Petrobras or Cairn Energy, both been upgraded to a Buy at Citigroup. It may not be either. This reinforces the fact that whichever P&E Company has been chosen for the JV the outlook is better this time.
. The share price has held (or been held) to a reasonable level this time. This may be to avoid the crazy fluctuations surrounding the Petrofac farmin.
. Management have learnt from their negotiations with previous partners and will be more robust in negotiating terms.
. The Artemis prospect, with is potential 12Tcf gas, has been thoroughly surveyed this time by a number of experts who would have gone through the data room.

So historically, if it is a major company, then there will be a TH and the SP will rise. For the terms to take so long to finalise then they must be complex.

I don't think the reverse will be the case but if it is the alliance with RDI did nothing of value to SHs.

Whatever the trail of announcements regarding the new partner has said, they have always inferred a major P&E company. After the apologies for keeping shareholders waiting, and not meeting their self imposed deadlines, I don't think management will short change us this time.

But anything is possible. If investors buy into speculative stocks they expect the risk to be in the search for commodities - not the interpretation of management decisions and cryptic announcements. It will take a long time for MEO to regain face if they have misled the SHs again IMO.

Conversely, a well thought out plan to forge the way ahead with a reputable partner will regain SHs confidence.

Notwithstanding outside influences (like today when all resource stocks are down, triggering SLs) a retrace in the form of the rollercoaster may only come after the ann, and subsequent rise. This will be because of the interest shown by the ST traders/TAs when they come back on board.

But this, again, is only my opinion:>))