MEO Australia Allies with RDI
Meo Australia Limited has announced that it has entered into a major strategic alliance with Resource Development International (RDI). RDI will contain substantial iron ore (10 billion tonnes), steel, nickel and energy interests. RDI is planning to raise A$5 billion via an initial public offering of its shares later this year. RDI will be dual listed on the Hong Kong and Australian Stock Exchanges. Leading investment banks have been appointed to manage IPO.
This strategic alliance will see a staged funding approach for each of MEO's project areas subject to various conditions precedent including successful IPO. As part of MEO's 15% placement capacity, the company has placed 21.391m shares to Mineralogy Pty Ltd at $0.55 to raise $11.8m before costs to fund ongoing geotechnical activity in NT/P68. MEO has further granted 14.498m options to subscribe for ordinary shares in MEO at an exercise price of $0.65 on or before September 30, 2008.
RDI has undertaken to fund the vast majority of MEO's share of costs in up to 9 wells in the company's three offshore West Australian permits (WA-359-P, WA-360-P, and WA-361-P) to earn a 35% interest in each permit. MEO's interest in these permits will reduce to 25% in the event the option to drill in each is exercised by RDI.
RDI has initially committed to fund 80% of the forthcoming Zeus-1 well targeting multi-TFC potential gas resources in WA-361-P to earn a 35% interest. MEO will fund 10% of the well and retain a 25% interest. Existing JV partners, Cue Energy (20%) and Gascorp (20%) have the option to fund up to a combined 10% of the cost of this well or allow MEO to increase its interest in the permit by up to 10% by funding up to an additional 10% of the well cost. In the even of drilling success at Zeus-1, RDI will fully fund MEO's share of two additional appraisal wells. In the event Zeus-1 is unsuccessful, RDI will fund MEO's share of one additional exploration well subject to a successful listing of RDI.
In its Timor Sea projects, and subject to Petrofac Energy Developments Oceania Ltd's pre-emptive rights, the agreement with RDI sees MEO's share of funding for all appraisal drilling and all project capital costs (upstream and downstream), fully carried through to commercial production on each of its proposed Tassie Shoal Gas-To-Liquids projects, while retaining a 20% interest. This involves RDI funding a staged appraisal drilling program of initially two wells (Heron-3 and Blackwood-2) to earn a 25% interest and two additional wells to earn a further 25% interest. Thereafter, RDI has undertaken to secure funding to meet all of MEO's costs in relation to any further appraisal activities required for certification of gas reserves and all capital costs required to bring each of its GTL projects into commercial production.
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Company: MEO Australia Ltd more info
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