MEO Australia Limited : Quarterly Activities Report for quarter ended 30 September 2011

MEO Australia Limited

ABN 43 066 447 952

Tel: (+61 3) 8625 6000

Level 17 Fax: (+61 3) 9614 0660

500 Collins Street Email: admin@meoaustralia.com.au

Melbourne Victoria 3000 Australia Website: www.meoaustralia.com.au

• Eni Australia Limited assumes operatorship of NT/P68 following receipt of regulatory approvals
• Rig contract awarded for ENSCO-109 jack-up to drill Heron-3
• Commences multi-client 3D seismic acquisition in WA-361-P
• Petrobras to withdraw from WA-360-P prior to permit renewal

• Share buy-back announced following period of trading below cash backing

MEO Australia Limited (ASX: MEO; OTC: MEOAY) provides the following summary in relation to its activities for the quarter ended 30th September 2011.

Bonaparte Basin

On 5th July, MEO advised that the Designated Authority had approved and registered the transfer and dealings in relation to the farm-in by Eni Australia Ltd (Eni). Eni is earning an initial 50% interest in the Heron area of NT/P68 by funding the drilling of Heron-3 and Heron-4 and has an option to earn a 50% interest in the
Blackwood area by acquiring a minimum 500 km2 of 3D seismic over the Blackwood structure and drilling
Blackwood-2 (refer ASX release 18th May 2011).

NT/P68 Location map Cross section through Heron-1 & Heron-2

Timor- Leste

Blackwood

Blackwood East

Heron-2

Well

Heron-1

Well

Indonesia

Australia

Abadi

NT/P68

Heron

Greater

Sunrise

Joint Petroleum Development Area

Evans Shoal

Tassie

Shoal

Barossa

Caldita

Line of Cross Section

Lowest Known Gas (LKG) = 4115m SS GCA Mid Case = gas down to 4133m SS

Heron North Heron South

Bayu-Undan

MEO mapped structural spill point = 4325m SS

= MEO Contingent Resource

+ = GCA Mid Case Contingent Resource

+ + = MEO Prospective Resource

Darwin

Heron-3 will test the Heron South fault block.

0 100 km

During the quarter, Eni assumed Operatorship and commenced planning for the drilling of Heron-3. On 4th October, MEO reported that it had received advice from Eni that a contract had been awarded to Ensco Australia Pty Limited (“Ensco”) for the provision of the ENSCO-109 jack-up drilling rig and associated services to drill Heron-3 which is designed to test the Heron South fault block. The rig is expected in early March 2012.

MEO continued to promote the virtues of the approved Tassie Shoal projects as logical development hub and to
secure feed-gas from regional custodians of stranded gas discoveries for these projects.

1 Air Products & Chemicals Inc has an option to earn a 50% interest in the Tassie Shoal Methanol Project pursuant to a Joint Development

Agreement dated 2004 and a subsequent amendment agreement dated 2006.

Carnarvon Basin

During the quarter, MEO executed a contract with Fugro Multi Client Services Pty Ltd to purchase 363 km2 of the planned 1,318 km2 Zeus multi-client 3D survey. The survey is designed to mature the Heracles lead and other leads towards prospect status as potential candidates for drilling in 2014.

Zeus multi-client 3D survey outline Area of survey in WA-361-P to be purchased

Acquisition of the survey commenced on 6th September and is expected to be completed in late October. The final processed survey is expected to be delivered during 2Q-2012. This work will satisfy the Permit Year 2 (Jan
2012 – Jan 2013) work program obligation.

During the quarter, MEO began the permit renewal submission process. On 22nd September, MEO received notice that Petrobras had elected to withdraw from the permit effective at the end of the current permit year and
not participate in the renewal process and their equity will be distributed pro-rata amongst the remaining parties.

Petrel sub-basin

Since the acreage award (refer ASX release dated 14th June 2011), MEO has been assimilating the available technical data ahead of planning for the Permit Year 1 seismic acquisition commitment.

Vulcan sub-basin

Planning for the current permit year seismic acquisition commitment continued during the quarter.

Planning for the current permit year seismic acquisition commitment continued during the quarter.

MEO accepted an offer of this gazettal block which was formally awarded on 8th July.

Indonesia

On 27th June MEO announced that it had executed a binding sales and purchase agreement to acquire all of the shares of South Madura Exploration Company which has a 30% interest in the South Madura PSC from Cooper Energy for a cash consideration of US$0.5 million.
During the quarter, the Joint Venture approved the transfer of Operatorship to a subsidiary of AED Oil (60%
interest).

On 28th June, MEO announced that it had executed a binding sales and purchase agreement to acquire all of the shares in Transworld Seruway Exploration Limited which holds a 100% interest in the Seruway PSC, offshore
North Sumatra from Transworld Exploration Limited for an initial cash consideration of US$5.0 million.
2

The PSC contains two significant gas discoveries – Gurame & Kuala Langsa – together with a number of wells that have intersected and tested gas and condensate. The PSC is strategically situated in close proximity to LNG infrastructure which has under-utilised capacity and a strong domestic gas market. MEO has committed to acquiring 700 km2 3D seismic and drill one well by the end of 2012. During the quarter, preparations were made to tender for the acquisition of the 3D seismic program.

A number of new opportunities were evaluated. MEO continues to seek attractive opportunities to supplement its
current acreage portfolio.

At 30th September 2010, the consolidated cash balance was A$90.2 million equivalent to $0.167/share.
On 28th September, MEO announced it intended to initiate an on-market share buy-back for up to 10% of its issued capital following a period during which its shares traded at well below cash backing. The share buy-back allows for the purchase of up to 47.7 million shares over a 12 month period commencing on/about 13th October.

• Award contract for and commence acquisition of 700km2 3D seismic in Seruway PSC
• Plan seismic acquisition programs in AC/P50, 51, 53 and WA-454-P
• Submit permit renewal application for WA-360-P
• Seek to advance Tassie Shoal gas projects towards commercial development
• Continue to seek attractive New Venture opportunities to supplement acreage portfolio
Jürgen Hendrich

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