navgas is lucky, page-8

LNC's market cap has shot up $388 million since they drew attention to the shale oil discovery on 23/1. And this was on top of the prior month where it shot up $501 million, so who's to say it wasn't the smart money buying. How much of this increase in market cap can be attributed to speculation about Arckaringa? I would say a lot. There are a bunch of publications (particularly in the US) that have run selling the $20 trillion dollar story to mum and dad investors.

The main difference between LNC's 500 mil or more increase in MC and NVG's 6 mil MC is a desk top study. I know this is the extreme upside, but even if you take more conservative figures you would still be impressed by the growth potential.

IMHO NVG will get re-rated based on the following:

+) If they can focus purely on the gas tenements

+) If they drop or sell the gold tenements

+) If they rename to NAVGAS to highlight this change

+) If they (or independents) complete a desktop study based on current records and prior tests

+) If they manage to get a drill deployed

+) If they get a result that confirms prior drilling

-) Slightly negative if a CR takes place, however will probably be offset by excitement that they can fund exploration

I think NVG has enormous potential. If they play it right they have all the right catalysts to drive a SP re-evaluation. Any of these factors could see the share price up 50% here and there and over time the market will seek a fair value considering their huge acreage.

I would say a conservative valuation (even at this stage) would have to be $2 per acre, because that would put it on par with some of the cheapest unproven oil and gas companies. (that's 4 times current share price) And here we have the added benefit of nearology to Arckaringa. However in time I am hoping that the results can stand up on their own and prove that these tenements are even more prospective for oil & gas than Arckaringa.

All in my opinion, don't invest blindly and do your own research!