Ann: Results of Meeting , page-2

Thank God there were few facts to remember from today’s general meeting. I didn’t get back from N.Z. until 1am this morning. And in a way it was quite ironic – while visiting my past home territory on the East Coast I came upon notice after notice “stop the drilling”. I’d gone to this morning’s meeting to encourage the very opposite.
Just one other point. I’ve been going to shareholder meetings for years and nothing has changed with smaller companies. While investors might grumble prior to the meeting few ever ask questions. As usual it was big mouth me and my fellow hotcopper contributor who were the only ones opening their mouths.
I’ve nothing new to report so if you’re short on time, stop reading.
Paloma. My question was ‘why the silence after the much heralded finds?’.
They’d expected to find conventional sands and discovered an unconventional project. The extraction difficulties are being found by other companies in the area as well so nothing new there. Yes, the technology is proven but other experiences are in shallower wells. They took the project to a large convention in Texas to see what interest they could eke out. At this stage there are several interested parties. The Neon board now think the best way forward is to bring in a larger partner as they’ve done in Vietnam. Failing that they can still go back and extract the conventional options available. Paloma has proved to be far more complex than originally thought and the company has made the decision that as a small entity they do not have the resources to develop the project to its potential. (I remember reporting back to you the number of hiccups they’ve had at this site in the last twelve months with inferior sub contractor materials and equipment)
Paris Valley. I reminded everyone that this goes back to Salinas days. The problem with this known field is that it is not in a county with an oil culture. Dealing with the locals is not easy. Having lived briefly in this area I can understand the problems they’re have conducting open meetings – this is greenie territory. Not only have they faced environmental concerns (mostly overcome) there’s also been false title claims. Luckily, our man on the spot has a background in microfiche. After trawling through the county records he’s found what was missing – another step on the way. Still no time frame but this is still a heavy oil field – we’re not talking bonanza here.
NSA. Today they began using the new water well – there will be no announcement until it has been proven to work (they don’t see a problem there). I’d remembered Salinas trumpeting the purchase of machinery to inject steam. Much rolling of eyes and Alan admitted they’d discovered “a mess” with previous operations. They’ve developed a new technique to keep the steam within the field rather than it escaping up the well. Alan interjected to say that unlike in the past when these well recoveries fell away they’re now finding a gradual improvement – a pleasing graph trajectory (I’ve simplified this but I believe the essence is correct) All along they’ve been recovering more than enough oil for NSA to cover Neon’s costs.
Glau. The 2D imaging should be finished shortly so that an analysis can determine where to begin drilling. These will be cheap to drill (I think I remember Ken saying a figure like $900,000 each)
Vietnam. Of course all the excitement revolves around these projects. This is the one both Ken and Alan brought with them and so they’ve a particular interest in chasing its success. I can’t give you a definitive date as to when the rig will be signed up for Block 105. Again, no detail as to the 3D results except for Ken to say, they verified all that they’d previously known about this block. Alan was telling us about ENI operations. As you know they’ve made that huge find off Mozambique – each project has their own team and he reports there is competition amongst the teams to outdo one another. The Vietnam operational team certainly don’t lack enthusiasm – and Neon is finding they’re a very receptive group to work with. A good relationship has evolved.
Indonesia. Because there is such a demand for gas in that country that’s why the govt allowed foreign companies to come in to develop known fields far more quickly. The Neon field was marginal when prices were around $2 but now they’ve risen closer to $10 this looks to be a profitable project. They’re still got to reprocess existing 3D info but they will extend their knowledge with a further 3D seismic programme in the next months.

Note how I haven’t commented on today’s vote. As usual the results were a foregone conclusion. The chair was asked to explain how salaries and incentives were determined and who are these 20 other peers? The company uses an independent body to advise on such matters – a balance of averages of those 20 ASX companies (they weren’t all named) plus enough incentive to allow the company to employ the necessary expertise.

That’s it. Afterwards Ken admitted to being very excited about the prospects of the coming months. Personally, I’d like a bit excitement now.
An aside to those out there from N.Z. I was showing my son where he was born on the East Coast and we noticed a huge sign on the sole shop across the road. KFC – Wow! How things have changed until we looked at the wording underneath –Kai For Coasties.
James