MEO reports Indonesian operations

The following is an excerpt from Australian firm MEO Australia Limited Annual Report published on Friday. (ed)

South Madura PSC (MEO 30%)
In June 2011, MEO closed a transaction to acquire all of the shares in South Madura Exploration Company (SMEC) which holds a 30% interest in the South Madura PSC, Madura Island. Consideration for the acquisition was US$0.5 million.

Seruway PSC (MEO 100%)
In June 2011, MEO closed a transaction to acquire all of the shares in Transworld Seruway Exploration Limited (TSEL) which holds a 100% interest in the Seruway PSC, offshore North Sumatra, from Transworld Exploration Limited (TEL). This PSC currently covers an area of approximately 3,635km2 and contains the Gurame and Kuala Langsa gas discoveries. It also contains an attractive exploration fairway that is the subject of a 700km2 3D seismic survey in late 2011. MEO also acquired an office in Jakarta along with a core team as part of the transaction. Consideration for acquisition was US$5.0 million cash. In the event of commercial production from the PSC, the acquisition arrangements provide for past cost recovery and net profitinterest payments to TEL to be paid out of production revenue.

A commitment well is due to be drilled prior to the end of calendar 2012. It is currently MEO?s intention to seek a partner to fund the drilling of this well.

The Seruway transaction exemplifies the type of opportunity we are seeking. Prospective acreage, high initial equity position, low entry cost, nearby infrastructure and a modest work program which is suitable for farming out to a major industry player. (end of edited excerpt)