waiting game, page-25

Wow people are quick to congratulate themselves before results are even here.

Only a few people have questioned what is the potential downside here.

I would say at least 50% capital losses to the downside.

For myself I have invested as much as I am comfortable if I were to lose half my money.

I think the potential immediate 3-4x upside outweighs the 50% losses that could be on the cards if it doesn't come off.

HOWEVER, I have invested knowing the geological potential, read numerous reports about surrounding gas fields and their characteristics.

I know why these blocks present good exploration targets and have invested my money based on this research.

I think there are still far too many posts containing statements about how much gas is there etc.

For the poster who stated 75% chance of success?!? Honestly, do some research about the exploration game and you will quickly realise a few terms and statistics.

For both blocks 105 and 120 I would say these are high risk prospects (which gives them less than 10% chance of success).

However for block 105 I would say the chance has increased somewhat because we know there are gas shows in the well. What we don't know is the composition of the gas and flow rates.

After my own research I believe flow rates shouldn't be a problem, if the gas is there in commercial quantities. This is because of the nature of the sediments, the well is located within the basinal fan where there are coarser sediments, this increases porosity and depending on the inter-connectivity of sedimentary grains will control permeability.

The foreseeable problem is the composition of the gas. This will come down to CO2 levels. We have already discussed implications of this and what nearby gas field Dong Fang contains.

So after taking this into consideration I would say the chance of success has increased to medium risk, which is between 10-20%.

Yes the potential valuations on what this could be worth are huge. This is because of the massive risk that exists in oil and gas. I'm not sure of overall industry success rates in oil and gas.

I work in minerals, and I can tell you within hard rock exploration we have success (within the industry) less than 1% of the time (whereby an economic deposit will be discovered). So that is over 99% failure! But that's the risk that is taken in exploration.

Yes, I have posted some potential valuations on what a discovery would be worth. But people need to have an idea on risk as well.

I have enough skin in the game to make some good coin, but I wouldn't be putting my house on it.

A lot of analysts like NEN for it's potential. But it would be nice for people to stop counting chickens before they have hatched.