Melbourne, Australia, Jan 31, 2013 - (ABN Newswire) - MEO Australia Limited (ASX:MEO.AX - News) (OTCQX:MEOAY - News) provides the following summary in relation to its activities during the quarter ended 31st December 2012.
During the quarter, four wells concluded drilling: Heron South-1 in NT/P68 (MEO 50% interest, 0% cost exposure); Gurame SE-1XST in the Seruway PSC (MEO 100%, 100% cost exposure) and two wells in the Gulf of Thailand G2/48 Concession: Anchan-1 (MEO 50%, 0% cost exposure) and Sainampueng-1 (MEO 50%, 66.6% cost exposure to the first US$5 million, 50% cost exposure>US$5 million).
Notwithstanding intersecting gas charged zones in both Heron South-1 and Gurame SE-1XST, neither well flowed gas at commercial rates in any of the three production tests run. Sainampueng-1 in the Gulf of Thailand was prematurely abandoned due to operational difficulties without testing the full prospective interval. Anchan was drilled by Pearl Oil/ Mubadala at 100% cost as a prior year commitment well.
Following these disappointing results, the Board of Directors initiated a comprehensive strategic review including a critical examination of the business model, business processes and investment policy. This review will be completed during the current quarter.
During the quarter, the Tassie Shoal projects continued to be progressed. Updated technology, capital and operating cost estimates were updated by major international engineering firms for both the Tassie Shoal Methanol and Tassie Shoal LNG projects. These reports confirmed the cost competitiveness of both projects. Commercial discussions with prospective customers, partners and potential gas suppliers continued in parallel.
A farmout/partial sale process for WA-454-P (MEO 100%) was initiated in early November. Additional projects will be offered for farmout/partial sale during 2013 including the Seruway PSC in March, followed by the Ashmore Cartier permits in July. Sale proceeds will replenish working capital.
In December, the company granted Eni an extension for the Blackwood well election deadline to 4th February 2013. Eni must elect whether or not to drill a well on the Blackwood gas discovery in NT/P68 (MEO 50%) or withdraw from that part of the permit.
Following the drilling of Heron South-1 on 14th December 2012, Eni has 60 days in which to elect whether to commit to drilling a 2nd Heron well. This deadline currently expires on 12th February 2013. If Eni elects to drill a 2nd well on Heron, it will have 36 months (3 years) to complete the drilling. If Eni elects not to drill a 2nd well, MEO will regain 100% interest in the Heron gas discovery.
Cash balance at end of quarter
The consolidated cash balance at 31st December was A$42.4 million including a USD balance of $28.3 million. A share purchase plan (SPP) was launched on 25th September and closed at 17:00 AEDST on Friday 12th October. The SPP raised $9.3 million before costs for working capital. In November, A$10.0 million was raised via a private placement to fund production testing of Gurame SE-1XST.
Events subsequent to the end of the quarter
Subsequent to the end of the quarter, the Company submitted applications to vary the minimum work commitments in AC/P50 & AC/P51 (MEO 100%).
Priorities for the current quarter ending 31st March 2013
- Complete strategic review
- Progress farmout/partial sale process for WA-454-P
- Initiate farmout/partial sale process for Seruway PSC
- Obtain variation to AC/P50 & AC/P51 minimum work program commitments
- Progress Tassie Shoal projects
View the complete MEO Australia quarterly activities report at the link below:
About MEO Australia Limited:
MEO Australia Ltd (ASX:MEO.AX - News) (OTCQX:MEOAY - News) is an ASX listed, independent oil and gas company focused on building a substantial Australian and international E&P business servicing the rapidly growing Asian energy markets.
The Company has assembled a portfolio of exploration, appraisal and development stage opportunities on the NW Shelf, the Ashmore Cartier and the Timor Sea regions in Australia, offshore North Sumatra, and on Madura Island, East Java in Indonesia and the Gulf of Thailand.
MEO has also attracted a high calibre Board of Directors and proven Executive, Technical and Commercial talent with a demonstrated track record of attracting and partnering with globally recognised industry participants.
MEO Australia is listed on the Australian Stock Exchange (ASX: MEO, OTC: MEOAY) and is headquartered in Melbourne, Australia.
MEO Australia Limited T: +61-3-8625-6000 F: +61-3-9614-0660 E: email@example.com WWW: www.meoaustralia.com.au
MEO Australia Limited
Copyright (C) 2013 ABN Newswire. All rights reserved.