bigdog
Retired many years ago
- Joined
- 19 July 2006
- Posts
- 8,123
- Reactions
- 5,469
Re: MEO - Methanol Australia
Todays Age news
http://www.theage.com.au/news/busin...n/2007/11/04/1194117878687.html?page=fullpage
MEO knows the drill, but it can't get to the bottom of Santos' sell-down
Barry Fitzgerald
November 5, 2007
GARIMPEIRO
Advertisement
MEO Australia
AS A former resources journo, Melbourne's John Joseph Byrne has solved more than a few mysteries in his time.
But the rationale for Santos to dump its shares in liquefied natural gas and methanol hopeful MEO Australia has got him stumped. Byrne's London-listed Cambrian owns 21 per cent of MEO.
MEO is now drilling the highly anticipated Heron-2 well in permit NT/P68 in the Australian waters of the Timor Sea, some 25 kilometres west of Tassie Shoal and 200 kilometres north-west of Darwin.
If the well comes in as MEO hopes, the Melbourne-based group will be on its way to becoming both an LNG producer and methanol producer. Good enough reason, you would have thought, for Santos to stick around with the 9.3 per cent stake it held back in May.
But no, Santos has been dribbling the shares out ahead of the main event, much to the chagrin of MEO, given the sales have knocked the stuffing out of its share price at a time when they'd normally been on the rise as the drill bit at Heron-2 chews away to its target zones.
"This well has the potential to do for MEO what the North-West Shelf did for Woodside 30 years ago," Byrne said last week. To his way of thinking, the stake Santos held in MEO would have given it the jump on the rest of the big boys should Heron-2 come up trumps.
"If I was a director of Santos I'd be on my knees every night praying that this well does not come in," Byrne said. That's because if it does, MEO shares will rocket from their current levels.
Now to be fair to Santos, Byrne's MEO has also been a seller of MEO shares ahead of the main event. But it is still holding on to a 21 per cent stake and its sale was a more managed affair in that it introduced institutional types to the MEO register. The MEO analyst at the broking firm Tolhurst, Irina McCreadie, penned a note on MEO last week that zeroed in on the Santos selling, saying it might have provided sustained selling pressure on MEO's shares.
"However, fundamentally we see no reasons for the weakness and suggest this is an opportunity to get exposure to this exciting ”” albeit a high risk ”” story," McCreadie said, after first-up declaring a beneficial ownership interest in MEO shares. Tolhurst has also raised money for MEO in the past.
In the research note, Tolhurst increased its "risked" valuation to $1.84 from $1.75 a share due to MEO's recent expansion of its horizons through its acquisition of some well-positioned exploration permits on the North-West Shelf.
The "un-risked" value of the Timor Sea LNG and methanol projects ran into "billions of dollars (net to MEO)", Tolhurst said.
"We believe that our current valuation strikes a fair balance between reflecting the potential upside and capturing significant risks remaining (including secure gas supply, further appraisal, funding development risks, among other things)," the broker said.
MEO shares traded at $1.13 on Friday. It's not known if Santos read the Tolhurst report. But Byrne did.
Todays Age news
http://www.theage.com.au/news/busin...n/2007/11/04/1194117878687.html?page=fullpage
MEO knows the drill, but it can't get to the bottom of Santos' sell-down
Barry Fitzgerald
November 5, 2007
GARIMPEIRO
Advertisement
MEO Australia
AS A former resources journo, Melbourne's John Joseph Byrne has solved more than a few mysteries in his time.
But the rationale for Santos to dump its shares in liquefied natural gas and methanol hopeful MEO Australia has got him stumped. Byrne's London-listed Cambrian owns 21 per cent of MEO.
MEO is now drilling the highly anticipated Heron-2 well in permit NT/P68 in the Australian waters of the Timor Sea, some 25 kilometres west of Tassie Shoal and 200 kilometres north-west of Darwin.
If the well comes in as MEO hopes, the Melbourne-based group will be on its way to becoming both an LNG producer and methanol producer. Good enough reason, you would have thought, for Santos to stick around with the 9.3 per cent stake it held back in May.
But no, Santos has been dribbling the shares out ahead of the main event, much to the chagrin of MEO, given the sales have knocked the stuffing out of its share price at a time when they'd normally been on the rise as the drill bit at Heron-2 chews away to its target zones.
"This well has the potential to do for MEO what the North-West Shelf did for Woodside 30 years ago," Byrne said last week. To his way of thinking, the stake Santos held in MEO would have given it the jump on the rest of the big boys should Heron-2 come up trumps.
"If I was a director of Santos I'd be on my knees every night praying that this well does not come in," Byrne said. That's because if it does, MEO shares will rocket from their current levels.
Now to be fair to Santos, Byrne's MEO has also been a seller of MEO shares ahead of the main event. But it is still holding on to a 21 per cent stake and its sale was a more managed affair in that it introduced institutional types to the MEO register. The MEO analyst at the broking firm Tolhurst, Irina McCreadie, penned a note on MEO last week that zeroed in on the Santos selling, saying it might have provided sustained selling pressure on MEO's shares.
"However, fundamentally we see no reasons for the weakness and suggest this is an opportunity to get exposure to this exciting ”” albeit a high risk ”” story," McCreadie said, after first-up declaring a beneficial ownership interest in MEO shares. Tolhurst has also raised money for MEO in the past.
In the research note, Tolhurst increased its "risked" valuation to $1.84 from $1.75 a share due to MEO's recent expansion of its horizons through its acquisition of some well-positioned exploration permits on the North-West Shelf.
The "un-risked" value of the Timor Sea LNG and methanol projects ran into "billions of dollars (net to MEO)", Tolhurst said.
"We believe that our current valuation strikes a fair balance between reflecting the potential upside and capturing significant risks remaining (including secure gas supply, further appraisal, funding development risks, among other things)," the broker said.
MEO shares traded at $1.13 on Friday. It's not known if Santos read the Tolhurst report. But Byrne did.
Big Dog
