buy the fact when it is better then the rumour, page-53

I do like this stock Londoner but as u and some others have mentioned I'm keen to run through where the challenges are for NGE to give a more balanced view.

1. They have no proven reserves. Huge potential with over 1 billion bbls of oil and 15 TCF of gas in adjacent permits but in plain terms NGE has nothing production worthy proven. They do have a 5bbls a day seepage coming from the ground along a 100km system but until they drill you can't be sure whether it would have been better to spud it with a shotgun (hill billy style) or what the story is. Looks very promising but in being balanced, investors have to make up their mind what they are comfortable with.

2. Permit funding. JV is now secure as is the additional cash for NGE to fund the drill of our seepage permit. That gives us one dill completed by NGE (100%), 2 committed drills by Tailsman and a further 4 drills at the option of NGE (or Tailsman if they are in a rush and would like to pay a higher % of the cost). Technical support will be provided by Tailsman on all permits. Risk for investors here is that after the 7 drill they come up with nothing making it practically impossible to find another partner/new funding. Unlikely given the preliminary seismic you can see in past company announcements, interest by Tailsman, findings in adjacent permits(especially the Stanley system) and the seepage but still a possibility. Not really a concern for investors until at least the first 3 drills but still to be noted.

3. Political situation in PNG. This country has a history of corruption which they have battled since independence from Australia. Relations between Australia and PNG remain strong though which is a big positive for protecting our investment there. The gap between the privileged and the rest is huge. This poses a large risk for MNC's exploring and developing/producing assets here as many live in tribes and believe they have claim over certain lands. Workers for the oil companies on the ground are typically accompanied by guards and come under spear and poisen dart attack. Sounds crazy but it happens in PNG. The risk PNG politics pose are primarily delays.

4. The terrain is ruggard. Getting equipment into position and building infrastructure will be difficult. Tailsman's current presence and plan for growth in PNG should provide the $, expertise and man power to help things move along especially with the PNG gov interested in having as many revenue producing assets feeding the public (or official - I hope not) purse. I would say this will frustrate NGE shareholders through delays to timetables but given our company in called New Guinea energy (and the frequent and timely notice of late) I would assume they would know the situation better then any of us so I would expect to typically here earlier announcements then expected(as they would build in appropriate delay time).

With the current share price they are trading less then 1:1 based on market cap to JV deal value. IMO this means that thier is currently no potential of any findings or benefits of having a MNC big brother in our corner. IMO NGE won't stay in the 20s for long.

Todays sell down comes with a publicised deal maker for a spec. Those that don't understand or care much for what the ann meant have been riding this wave for a little while now with the last of the SST traders accumulating over the last couple of days to sell on the ann. They would have made a healthy profit and thanks for taking us to our 12 monthly highs. There may be a little bit more early next week but all the cards are on the table now. New investors will begin to enter the register and NGE holders will be more reluctant to give up their shares without at least having a look in the ground before Christmas. I expect a steady march north over the following months.

For the record I didn't complete the sell/buy trade today. I'm still see huge upside and have tried to give a more balanced view based on the real challenges. I still hold and will continue to do so until we drill the first 3 wells or as one poster put it 'we make a takeover bid for BHP'. I think the former is more likely but here's to hoping!

BG