Quarterly activities summary for Period ended 30th June 2013
Melbourne, July 23, 2013 AEST (ABN Newswire) - MEO Australia Limited (
ASX:MEO) (OTCQX:MEOAY) provides the following summary in relation to its activities during the quarter ended 30th June 2013.
Executive Summary
During the quarter, the company progressed the farmout/partial sale for WA-454-P, culminating in the execution of a farmout agreement with Origin Energy subsequent to the end of the quarter. Concurrently, a number of other projects were matured technically in preparation for farmout/partial sale processes expected to launch in the current quarter.
Work program variations in relation to AC/P50 and AC/P51 applied for during the preceding quarter were approved by the Designated Authority. In AC/P50, the Permit Year 5 & 6 programs were swapped, moving the discretionary well into Year 6. In AC/P51, the previous requirement to acquire 1,000 km 2D seismic data was replaced with multi-azimuth reprocessing of existing 3D datasets. Both permits are being prepared in readiness for a farmout/partial sale process expected to launch during the current quarter.
In addition to AC/P50 & 51, several additional projects were matured for farmout/partial sale, including: Seruway PSC (100%), Gulf of Thailand concession G2/48 (50%) and WA-488-P (100%).
During the quarter, MEO determined that WA-360-P (62.5%) and WA-361-P (50%) would be divested to allow the company to focus on its Northern Australian acreage.
Drilling of Blackwood-2 (NT/P68, MEO 50%) moved a step closer with the Ensco-104 jack-up drilling rig contracted for a multi-well program, expected to include Blackwood-2. MEO anticipates Blackwood-2 will be either the 2nd or 3rd well in the program, following the current well (Evans Shoal North-1). Depending on operational progress achieved during the current well, a mid-late September spud is considered likely in the event Blackwood-2 is the 2nd well in the program, or early-mid November if it is the 3rd well. MEO is carried for the costs of drilling Blackwood-2 by Eni Australia, including the costs of production testing if warranted.
A new permit, WA-488-P (100%) was awarded by the Government as part of the 2012 New Acreage Gazettal Round. WA-488-P is immediately adjacent to the Company's WA-454-P permit and significantly increases MEO's acreage footprint in the Petrel sub-Basin.
Cash balance at end of quarter
Consolidated cash balance at the end of the quarter was $16.6m.
New Ventures
MEO continues to screen for attractive new venture opportunities, ideally capable of generating operating income within 3 years in addition to attractive exploration plays.
Events subsequent to the end of the quarter
Two material events occurred subsequent to the end of the quarter:
1. A farmout/partial sale process for WA-488-P commenced. In preparation for the launch, MEO released its estimates of the Prospective Resources in the two objectives for the Beehive Prospect, as summarized in the following table:
-------------------------------------------------------------Prospective Resources*Beehive prospect P90 P50 Mean P10--------------------------------------------------------------Carboniferous objective (MMstb) 104 598 1,009 2,182Ordovician objective (MMstb) 67 328 575 1,314* Recoverable--------------------------------------------------------------
2. A farmout agreement was executed with Origin Energy in relation to WA-454-P. Origin will acquire a 50% interest in WA-454-P and become Operator of the permit, subject to customary Australian regulatory approvals and the finalization of a Joint Operating Agreement. Consideration for the transaction involves Origin reimbursing A$5.6m, representing 80% of MEO's past costs, payable in two equal tranches, and funding 80% of an exploration well on the Breakwater prospect to fulfill the Permit Year 5 (year commencing June 2015) discretionary work programme. The well cost is capped at A$35m (untested) assuming an A$/US$ exchange rate of parity, to be adjusted at the time of drilling to reflect the prevailing exchange rate assuming 65% of the well costs are in US$. Costs in excess of the well cap and any production testing (if required) will be funded in accordance with participating interests. MEO will seek to defray the residual 20% funding obligation ahead of drilling Breakwater-1.
Priorities for the current quarter ending 30th September 2013
- Finalise contingent and prospective resource estimates
- Launch farmout/partial sale process for AC/P50 & 51
- Launch farmout/partial sale process for G2/48 concession in Gulf of Thailand
- Launch divestment process for North West Shelf permits
- Mature farmout/partial sale process for Seruway PSC
- Progress Tassie Shoal projects
- Screen New Venture opportunities
Contact
MEO Australia Limited
T: +61-3-8625-6000
F: +61-3-9614-0660
E: admin@meoaustralia.com.au
WWW: www.meoaustralia.com.au
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