Quarterly activities summary for Period ended 30th June 2013
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   2,182
Ordovician objective (MMstb)       67    328       575   1,314
* Recoverable
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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

About MEO Australia Limited

MEO Australia Ltd (ASX:MEO) (OTCQX:MEOAY) 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.

 


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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