Each one in plain English, with the numbers worked through for a shareholder.
18 Aug 2016capital raising announcement● NeutralMajor
MEO raises about A$1.69m through a placement of about 46.9 million shares at 3.6 cents, a ~17% discount to the 10-day average price. Funds go to Cuba Block 9 drilling planning and working capital; a share purchase plan targeting ~A$1m is to follow.
What it means for a shareholder
46.9m new shares at A$0.036 to raise about A$1.7m. That's 5.0% dilution: every existing holder's slice gets 5.0% smaller. If you held A$1,000 of shares (27,778 at the issue price), your slice goes from 0.00312% to 0.00296% of the company. To keep it you'd need 1,462 more shares - about A$53 at the issue price.
Operations update: MEO aims to finalise a drilling plan for up to two Block 9 wells by Q1 2017, targeting the A2 Lead and a Marti-5 follow-up. Upper Sheet and Shallow Tertiary results due Q4 2016; Beehive farm-out targeted to complete in Q4 2016.
Tassie Shoal LNG project environmental approval extended to 2052, matching the methanol project, and the 3% CO2 feed gas limit removed. Approvals are not a funded development or buyer; the earlier gas purchase offer had been rejected by producers.
June 2016 quarter summary: cash A$4.1m. Cuba Lower Sheet result (395 MMbbl) repeated, with other two plays due by end 2016 and early drilling targeted for Q1 2018. Beehive farm-out to begin Q3 2016; WA-454-P assigned to Origin; Rouge Rock option on AC/P50-51.
June 2016 quarter cash flow: cash fell to A$4.136m from A$4.948m, with A$819k operating outflow. No debt. Next quarter outflow forecast at A$1.1m (exploration A$600k, administration A$500k). Includes A$531k cash-backed Block 9 guarantee.
Open Briefing interview with the MD restating the Block 9 assessment: Lower Sheet Play has 15 leads, over 8 billion barrels in place and 395 million barrels unrisked prospective resource, with two further plays under review. Nothing new beyond the 7 July announcement.
MEO appointed Dr Rafael Tenreyro, recently retired Director of Exploration at Cuban state oil company CUPET after a 42-year career, as its part-time Havana representative, ahead of planning field activity on Block 9.
July 2016 corporate presentation repeating the Block 9 assessment (8+ billion barrels in place, 395 million barrels prospective resource in one play) and the disciplined strategy. Nothing new beyond earlier announcements.
Cuba Block 9 prospectivity assessment completed for the first of three plays: Lower Sheet Play has 8.183 billion barrels oil-in-place and 395 million barrels unrisked best-case prospective resource (100% basis; 267 million net to MEO), across 15 leads. Accelerated drilling being examined.
Securities notice: 500,000 unlisted 50c options expired on 1 July 2016. Quoted shares stand at 891,204,960; remaining unlisted options are 1.2m and 2.5m, plus 5,333,333 and 20,940,032 performance rights.
Rouge Rock has an option to take 45% of AC/P50 and AC/P51 by funding the remaining work program, indicatively worth A$1.15m, to May 2018. MEO would keep 55% (subject to a 5% Far Cape option) and be free-carried. Joint farm-out planned for 2017.
4 July 2016asset acquisition disposition● NeutralMajor
MEO is assigning its 50% of WA-454-P to Origin, which then holds 100%, after failing to find a partner for the remaining 20%. Back-dated to December 2015, it avoids all 2016-17 costs including the Breakwater-1 well. Shifts focus to onshore Cuba.
TAG Oil has completed buying Kea's 70% of PEP51153 in New Zealand and becomes operator, resolving the liquidation-driven uncertainty. MEO keeps 30%. Work program revised: gravity data by March 2017, then one well or surrender by February 2018.
Beehive reprocessing and inversion in WA-488-P (MEO 100%) is complete, and MEO says results exceeded expectations and support a Carboniferous carbonate reservoir with shale seal. Resource table unchanged (best case 558 MMboe); farm-out effort planned for second half of 2016.
Link to a video interview with the Managing Director discussing Cuba Block 9, ahead of its prospectivity assessment release, and progress at WA-488-P. No new figures or results in the announcement itself.
March 2016 quarter: cash A$4.95m. Cuba Block 9 review continues with oil found in old wells; Beehive reprocessing results encouraging, drilling deferred to late 2017. Kea's 70% of PEP51153 under conditional sale. Leni placement made it the 15.8% holder.
March 2016 quarter cash flow: cash rose to A$4.948m from A$4.05m, helped by the A$1.407m Leni placement. Operating and investing outflow was A$444k. No debt; next quarter outflow forecast at A$1.0m. NT/P68, WA-360-P and WA-361-P interests now zero.
April 2016 corporate presentation describing a strategy focused on Cuba Block 9, low-cost Australia/NZ activity and fiscal discipline. It appears to repeat known positions; the text provided is truncated, so no new figures can be reported.
Early reprocessing of old seismic over the Beehive prospect (WA-488-P, MEO 100%) shows markedly better data quality, which MEO says supports its interpretation. Full work is due mid-2016 and a renewed farm-out is planned for the second half. Resource figures are unchanged (best case 558 MMboe Carboniferous).
Half-year to 31 December 2015: loss of A$1.37m versus A$7.28m a year earlier, which had included exploration write-offs. Mainly administration costs. Update on permits repeats known positions; Origin to fund 80% of Breakwater-1.
29 Feb 2016capital raising announcement▲ GoodMajor
MEO raised A$1.4m by placing 140,716,573 shares at A$0.01 with London-listed Leni Gas Cuba, which becomes its largest shareholder at 15.8%. Funds go to Cuba Block 9 exploration, lifting cash to about A$5.0m.
What it means for a shareholder
141m new shares at A$0.010 to raise about A$1.4m. That's 16% dilution: every existing holder's slice gets 16% smaller. If you held A$1,000 of shares (100,000 at the issue price), your slice goes from 0.0133% to 0.0112% of the company. To keep it you'd need 18,750 more shares - about A$188 at the issue price.
Kea's liquidators agreed a conditional sale of its 70% in PEP51153 to an unnamed regional operator. MEO will not use its pre-emption rights, accepts the buyer as operator and withdrew its own bid to operate. MEO's 30% is unchanged.
Review of old Block 9 wells in Cuba found several recovered oil, such as Guadal-1 (over 30 barrels of light oil on test) and Marti-5. Seismic reprocessing has begun, with the prospectivity assessment due by mid-2016. These are historical results, not new drilling.
Senior staff accepted a 20% cut in cash pay in exchange for 20,940,032 performance rights, saving about A$200,000 a year. The rights vest 31 January 2017 and convert to shares at no exercise price, so they add dilution.
December 2015 quarter: cash A$4.1m, in line with forecast. Cuba Block 9 prospectivity review began, WA-488-P extended, Kea went into liquidation, and Short and Hopley left the board with Purcell as chairman. Exits from Heron and two Carnarvon permits begun.
December 2015 quarter cash flow: cash fell to A$4.05m from A$5.152m, a A$1.056m outflow. No debt and no shares issued. Forecast outflow next quarter is A$1.1m.
Following Kea's liquidation, MEO exercised its contractual right to become operator of PEP51153, subject to regulatory approval. Its interest stays at 30%.
Kea Petroleum, operator of PEP51153 and seller of its 70%, has appointed liquidators. MEO's 30% is unaffected, but it is unclear how this affects the pending sale of Kea's 70% (named here as to Puka Petroleum Limited), which had not completed.
9 Dec 2015regulatory community update● NeutralMajor
Regulator approved a 12-month suspension and extension of WA-488-P (MEO 100%), with Year 2 now ending 21 November 2016. Beehive drilling is deferred to 2017 while 150km of seismic is reprocessed; MEO plans to farm down up to 80%.
MD Peter Stickland signed an open-ended employment agreement from 1 December 2015. Fixed pay is A$400,000, with 20% (A$80,000) taken as performance rights, cutting cash pay to A$320,000. Continues the cost discipline theme.
