MEO Australia Limited says 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$31.25m 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 commercialisation options including the possible application of Floating LNG (FLNG) technology. The Songa Venus semi-submersible rig is expected on location late October 2008.

Tags: MEO Australia Limited