wild ride or beggining of cruel rollercoaster, page-4

Hi callent - welcome back.

No serve from me as long as it isn't a personal attack and it is great you have put forward some discussion points this time. Input from posters who question their investments, grounds the faith investors thus leading them, in turn, to question their own investments

The difference with my position is that I am comfortable with my investment in MEO. I post in this forum not to sway SHs either way but to try and sort out the facts from the available scant information.

Sometimes it is prudent for a minnow like MEO to abide by confidentiality clauses set by companies like PBR and Eni who have their own ways of doing business. This may seem like MEO have something to hide, or are not moving on, but I am sure they are sitting on their hands.

Just look at MGN's latest foray into Evan's Shoal. They were telling the world what they were going to do in the area without first setting the groundwork or consulting the PPs. Due diligence is important in any business venture, large or small.

If we are concerned about the looming financial crisis and what that means to our investments, we have to decide if the companies we invest in have the cash backing to weather the storm. If a company is financially sound then they will come out of the other side and once they do then they may even have the bargaining power to take advantage of the situation. I think some companies are feeling the strain even now.

What happens to the SP is a different story as we found out during the last GFC when Lehman Bros went belly up. We went down to NTA (8c) at that time but not below. At the moment the NTA is about 18.5c. This is about 7% below today's price. For SHs who are not long term (and others) who think that the price will go down to this point or below, and are worried about the GFC, then it might be better to get out and put the money in the bank. It is always possible to buy back in later; especially if the SP does go down that far - but only if we are still happy with the fundamentals through DYOR.

It is as simple as that. Like I have always said, we have to make our own decisions and live by them. In the end, if the stress of holding shares is affecting our lives then we must re-visit those decisions. This is what we should be doing all the time.

Perhaps one of our T20 SHs may sell their holdings but isn't that going on now? Last month CS Fourth dropped 10m shares whilst JP Morgan picked up 7m. Overall the T20 shareholdings went down by .12% which tells me that, even though the MEO chart is flat, there is always someone there to pick up the slack. To be able to accumulate at these prices is a bargain, but that is only my opinion.

It also tells me that those SHs who are holding or accumulating are confident about the fundamentals and can tolerate the heat in the kitchen. But I don't rely on other SHs actions as they often use TA alone to make their decisions.

What we must remember is that MEO is a small company with long term goals and to reach them long term planning must be put in place. Larger companies, with massive financial backing, can afford the hit and miss affairs with wildcat wells. Smaller companies like MEO must try and move forward whilst keeping a bank balance.

By making some hard decisions and placing CR exercises at opportune times, which can be unpopular to ST holders, they have been able to make a profit even through negative situations (GFC/A#1 etc). Admittedly this, again, doesn't help the short term SP but for a LT investor like me, it is gradually building up value in my investment.

Regarding the timing of the next well, it could well be 6 to 12 months (I hope they can stay away from the cyclone season). Now a binding agreement has been signed off the government approvals have to be settled. This will take 2-3 months but as MEO hold 100% of the permit then there won't be any third party worries - apart from Petrofac who still have buy back in options until the end of June.

Eni will take over as operator but MEO may still be seeking out a rig. Because of the shallow water I think they will use a less expensive jack-up rig like before (ref Heron with the ill-fated Atlas). I am not sure if there are many in Australian waters but availability could be a hold up to. When we look at the work commitment then they are not required to drill until 2014, but I am sure Eni and MEO are keen to escalate that.

What is more important is the outcome of the drilling when it does eventuate.

Regarding PBR and WA-360-P; the only facts we know about this is basically there were no HCs in the targeted zones. There was a pressure zone in Withnall but until we do hear back from PBR isn't anything about Artemis speculation too? In my mind I am leaving that on the back-burner and looking at more positive indicators - not to say that 360/361-P are lost causes.

If my investment in MEO was relying on Artemis alone then I wouldn't be holding any shares in the company but I am looking further than that. The whole concept of TS got my interest a long time ago. It has been a roller coaster ride since but recent events, and the commitment of management, have confirmed it as a viable proposition.

Added to that is management's indication in:

* May's Casimir Conference release *

that, apart from confirming the farmout of NT/P68, they also have stated (P2) '5+ New venture opportunities in the pipeline = significant growth potential' and (P5) '3 (Permit) Applications - Applications submitted in this region (Bonaparte/Ashmore-Cartier), competitive work program bid process underway'.

If we look at MEO as a singular entity as Artemis, NT/P68 or Tassie Shoal, then this will not be enough to keep the company moving forward. What we need to look at is where the company may get added value and management, along with other events in the region, are giving indications that a more complete picture will ensue. Only with added value through income and sound JVs will MEO be able to realise the TS vision.

With speculative investments faith is with struggling SC companies who have a wish list but don't have the resources to reach their goals. I believe MEO are beyond this and have shown enough fortitude to begin to reward their LT shareholders.

Yes, our patience will be tested, the wild ride will continue and the roller-coaster will gain momentum again - we will see that when the MEO forum starts buzzing again.

Until then I am perfectly happy adding to my MEO portfolio at 20c a pop.

But this is my decision alone and, please; don't take my word for it.

DYOR

#:>))