MEO Australia Limited advises that updated seismic interpretation and pre-drill resource estimates based on the Artemis 3D seismic data received early July, have now been sent to the 20 parties that remain in the WA-360-P farmout process. The data room closes to new entrants at 5pm today (Melbourne time). MEO has requested indicative offers from these parties by 31st August and remains confident that a transaction will be concluded by 30th September.

MEO has earlier indicated that new biostratigraphic data received from analysis of drill cuttings from the Zeus-1 well suggested increased reservoir thickness due to the identification of the Calypso reservoir, and the newly received Artemis 3D seismic data suggested an increased areal extent of the Artemis prospect. These factors gave the Company confidence that the previously estimated 9.5 Tcf gas-in-place for Artemis would likely materially increase.

Impact of bio-stratigraphic data from Zeus-1 MEO recently received new bio-stratigraphic data from its Zeus-1 well. This data has caused the Company to upgrade its reservoir interpretation to include both Calypso and Legendre sandstones in the prognosed reservoir section at Artemis, resulting in a prediction of significantly thicker reservoir at Artemis than originally prognosed.

Impact of Artemis 3D seismic data Velocity data from the new 3D has increased the size of the Artemis structure and concurrently increased confidence in MEO’s depth conversion methodology. High amplitudes (often termed Direct Hydrocarbon Indicators or DHI’s) are observed on both the existing and new data within the predicted reservoir section at Artemis. These high amplitudes exhibit a common depth termination which may represent a Gas Water Contact and therefore may indicate the presence of gas.

Depth conversion scenarios Depth conversion complexities in this geographic environment (ie rapidly changing water depth) is the primary reason why the recent Iago, Wheatstone and Pluto gas discoveries remained hidden until this decade. These recent discoveries were drilled on DHI (direct hydrocarbon indicator) anomalies, before the depth conversion nuances were fully understood. Artemis shares similar DHI attributes as these gas discoveries.

MEO has developed two depth conversion scenarios based on these observed amplitude terminations that result in variations of the absolute depth of the trap. The Company’s original depth conversion scenario placed the potential Artemis GWC at the same level as the Wheatstone GWC (-3,127m).

Presently, MEO’s preferred depth conversion scenario places the potential Artemis GWC at -3,275m, significantly deeper than the Wheatstone GWC.

Importantly, the volumetrics remain the same irrespective of the two depth conversion scenarios. The calculated rock volumes are based on the extent and interpreted column height of the high seismic amplitudes which are independent of the depth conversion.

MEO’s G&G team estimates the geological chance of success (GCS) for Artemis is 32%. While relatively high for an exploration play, investors are reminded that this implies the probability of failure is 68%.

WA-360-P participants North West Shelf Exploration Pty Ltd (MEO subsidiary, Operator) 70% Cue Energy Resources Limited (ASX: CUE) 15% Gascorp Australia Pty Ltd (Unlisted) 15%

Tags: MEO Australia Limited