amplitude extent, page-30

Timber - you have changed your tune. From your post above you now seem to agree this is not yet commercial?? Yet below is a quote of some time ago...

"All the detail that I have wanted to post rolls up to a seemingly unrecognised fact. After logging what they could from zones 1, 2, and 3, NEN are pushing the JV to conduct a production test from these sections. This is because regardless of what is below it, it is commercial. They must know it is bigger and of a quality that exceeds pre-drill estimates so as to warrant a test. They will want this, so they can start financing discussions and therefore produce from it."

This is the BS that was being bandied around a few weeks ago (i.e. commercial and financing pre production!). At least you now recognise the issues here - as do several new quality posters. I respect your technical knowledge, but I think you have been well of the mark on the commercial/capital markets side of things.

The JV seem to have found a large resource - which is excellent. If it tests - then they have a POTENTIAL commercial field on their hands. To declare commerciality and produce anything - well thats years and years away and as you correctly state - many hundreds of millions of dollars.

The only way to raise that sort of dough, six, seven or ten years ahead of first production, I can 100% guarantee will (at least in the next few years) be equity. No bank (even your IB) will lend to a company with one asset of real value seven years (or whatever it is) ahead of first production. Way too risky for the bank - no question - ask anyone in the project finance world. Also - no one should believe NSA/Glau/PV is bankable to any great degree. Anyway - debt at this stage would be suicide.

Why am I saying all this? Not to have a crack at you - but to give posters an alternative view of why this will never trade at the values being talked about throughout the various threads.

IMHO - the best outcome here is for NEN to maybe hang around in the JV for the drilling of perhaps one or two more appraisal wells (which will take a year or two and only cost them perhaps $10-$20M) - prove up the 1P and 2P reserves, then look for a buyer before the serious capex starts - either of the company or the asset. That is the only time they will realise full value.

Once NEN has the next tranche of funding secured (even if they have to do it at 35-45 cents) I am confident you will see a steady rise to 70-80c if this all pans out as we all hope, but unless something else remarkable happens (e.g. 120 is a commercial oil discovery) I would temper any thoughts of $1++

Anyway - these are just my thoughts as an ex investor in NXS, KAR and RIA. Take a look at those stories when you get a moment. They range from disaster to just disappointing (following initial gas discoveries). I have faith that Stein will guide this one well though - as he understands the value chain well and knows when it is time to pack up the shop and sell...!!! He's done it before and knows the game as good as anyone.