MEO Provides Activities Update (Australia)

MEO Australia Limited today provided the following information in relation to its activities for the quarter ended 31 st December 2011.

MEO commenced a period of high field activity during the quarter and made significant progress in all areas of its portfolio.

In NT/P68, Operator Eni Australia Limited awarded a rig contract for the drilling of the Heron-3 appraisal well. The rig is expected to arrive late in the second quarter this year, with drilling to occur during the third quarter. Eni also brought forward the exercise of their 3D seismic option and acquired some 766 km 2 of 3D seismic data over the eastern extension of the Blackwood gas discovery. Acquisition of this survey was completed in early January and the survey will now undergo extensive processing to a pre-stack depth migrated volume to resolve depth conversion challenges. The final processed volume is expected in November.

MEO’s Tassie Shoal Gas Processing Projects entered a new phase during the quarter with the appointment of Mr Robert Zammit to a new position of Executive Manager – Business Development. His primary role is to drive the Company’s efforts to monetise the Tassie Shoal projects. The Company terminated the Joint Development Agreement (JDA) with Air Products which had been suspended since 2006 and regained a 100% unencumbered interest in all components of this project, materially enhancing MEO’s commercialization options. Concurrent with terminating the JDA, the Company announced its intention to seek expressions of interest from companies seeking to participate in these projects. MEO is confident that this year will see significant progress in finally moving these projects towards commercial reality.

Work on MEO’s Carnarvon basin permits continued with the acquisition of 3D seismic in WA-361-P and the submission of a renewal application for WA-360-P. Two of the Company’s WA-360-P joint venture partners – Petrobras and Moby – have elected to withdraw at the expiry of the current permit year. The WA-360-P renewal application includes the proposed purchase of existing multi-client 3D seismic in the first year. The Company plans for both these permits involve maturing several leads into prospects before seeking a farm-in partner for either or both of the permits.

Since the Company was awarded the WA-454-P in the Bonaparte Gulf in June 2011, MEO has moved rapidly to assess the potential of the permit. A technical evaluation of the Marina-1 gas and liquids discovery has provided sufficient encouragement to warrant an early investment in 3D seismic. The nearby Breakwater prospect represents a very attractive exploration target. Design of and tendering for the Floyd 3D seismic survey targeting Marina, Breakwater and two other leads was completed during the quarter and the contract for acquisition of the Floyd 3D seismic survey was awarded in early January. Acquisition is expected to commence in February and be completed in March.

In the Company’s contiguous AC/P50, 51 and 53 exploration permits in the Vulcan sub-basin, MEO has completed design and tendering of the Zeppelin 2D and 3D seismic surveys during the quarter. A contract for the 2D and 3D Zeppelin seismic surveys was awarded in January. The surveys were combined with the Floyd contract for efficiency and cost reasons.

In Indonesia, acquisition of the 708 km 2 Ibu Horst 3D seismic survey commenced and was completed in early January. This survey will provide the technical basis to evaluate the exploration potential of the Ibu Horst section of the block. The Company will use this evaluation to select a candidate for drilling the commitment well due by the end of 2012. In addition, MEO is working on a variety of activities aimed at maturing a Plan of Development (POD) for the Gurame gas discovery within the Seruway PSC. This POD maturation, coupled with the Kuala Langsa discovery and the improved definition of the Ibu Horst exploration prospects will underpin our future plans to attract a farm-in partner for the Seruway block.

The last quarter also saw MEO’s subsidiary South Madura Exploration Company (SMEC) acquire an additional 60% interest and operatorship (subject to regulatory approval) in the South Madura PSC from AED South Madura BV (AED). AED’s parent company went into administration and subsequently receivership in the last half of 2011 which had the unfortunate effect of suspending progress of the work program in the block. MEO decided to acquire the increased interest in the South Madura block from AED’s new owners to drive exploration efforts and the Company is now focused on discussions with the Indonesian regulator aimed at arriving at an achievable work program designed to test the exploration concepts MEO’s technical team has identified.

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LNG World News Staff, January 23, 2012