MEO Australia Limited announced that Cue and Gascorp have advised MEO that they have elected not to exercise their respective options to each fund 5% of the Zeus-1 well to retain a 20% working interest. Under the terms of the farm-in agreement with MEO, this combined 10% interest will now be transferred to MEO, together with the associated 10% funding obligation, increasing MEO's interest to 35%.
The Zeus-1 well is targeting a multi-Tcf gas play in the Carnarvon Basin, off Australia's North West Shelf. MEO is paying 20% of the costs of Zeus-1 to a cap of US $31.25 million and retains a 35% interest in the well and WA-361-P. In the event of a major discovery at Zeus-1, MEO sees a plethora of commercialization options including the possible application of Floating LNG (FLNG) technology. The Songa Venus semisubmersible rig is expected on location late October 2008.
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