low risk - high reward, page-23

Here's a differing opinion; This thread is a little ridiculous. While I can appreciate the message, the simple fact of the matter is you cant get high rewards without high risk. Any statement to the contrary is wrong.

A value for CoS/PoS has/will be factored into the SP. Any negative development against the high impact drilling will have a negative impact against the SP. Thats bad for everybody. In fact GiddyYup's post unintentionally highlights this - in that if we imagine the worst case scenario; they are dusters or not commercial we wont have the capital to fund other programmes. Obviously this is worst case, but CoS for both wells is 10-20% (unoffical figures, but taken from analyst interviews). And this is part of where an unsuccessful Vietnam drill adds risk to the wider NEN story.

Having said this, and I also hope it plays out like this - I dont think the company will use funds from its higher risk portfolio to fund its lower risk portfolio. This would be value destructive (IMO). They should either return funds to shareholders or reinvest in other high risk assets at this stage of the company's life. The most recent CR was conducted to advance the low-medium risk/income producing assets, hence improving ROE (50% of CR proceeds). The other 50% of proceeds were marked for other projects/seismic. I would like to see them execute on this strategy.