The market and punters alike are confused. On a simplified basis, removing cash (this is a stripped valuation to obtain the EV/% of Artemis) and ignore other assets, the EV valuation exposure of the partners to Artemis is as follows.
MEO $1.64m per 1% of Artemis
MOG $2.55m per 1% of Artemis
CUE $9.48m per 1% of Artemis
Obviously CUE is a producer, and there are other variables, but those who think MOG is more highly leveraged to Artenus are smoking something.
Throw in a premium for MEO as MEO has the ability to make a deal as major holder/operator, and crystalise value due to its position as deal maker.
Upon a great farmout, this will provide a valuation floor on the interests in Artemis for all parties, but MEO is the party that will receive both cash and free carry, far beyond anything CUE or MOG could ever achieve.
The lower MEO's share price gets, the higher the risk of MEO receiving a TO attempts, as the farminee must start to think that why commit $300m to a farmin for 50% when I can buy 70% of Artemis for say $350m (73cps) and get other gas discoveries, TSMP to apply my technology, tax losses, and $40m back in cold hard cash!
In for another 1/2 bar before close.
MEO Price at posting:
33.0¢ Sentiment: LT Buy Disclosure: Held
