Ann: MEL announces scrip merger with Elk Petroleum, page-17

Cannot understand some of the negativity with this.

As it stands we don't take on much risk. The merger (of which MEL shareholder maintain dominance) is conditional on funding being available in March 2015, I think this is absolutely based on legal advice about government payout. If the funding falls through, then the merger doesn't go ahead and the 2.5m loan is fully due. And after all that, we're right back where we started. So why the negativity?

While we wait for the judicial process to play through, we are shrewdly deploying capital in to a venture with a major US player (Denbury Resources), in to a project which has a definable path to production. What's more, ELK shareprice has been hammered on the recent collapse of the oil price, with a pickup MEL will benefit. (I don't believe this oil slump is long term, too many major players depend on higher prices to allow this to continue. ie. OPEC is not dead.)

We have needed to diversify for years, this is a good thing. Big fan.