waiting game, page-29

Scoob,

Does seem like a red/black punt when you look at the odds like that!

However, I like NEN play for a number of reasons:

- Within same sedimentary fan as the producing Dong Fang gas field to the east
- Already had gas shows in the target objectives
- Successful farmouts of the acreage and the interest from an oil and gas major
- Sound oil and gas exploration experience from the team (not to mention the expertise that the partners bring)

I think the odds have shortened in our favour based on the fact that the target formations do have gas in it, and I actually only purchased once this was identified. So I had to pay a 25% premium on the sp once this was identified, but this is what the market has valued that information, it removed or derisked the stock somewhat so the sp was worth more.

In my previous post I was only putting forward chances based on the different categories of risk that O&G plays document in exploration plays.

Initially I'd agree with Timber in that the odds of finding gas might have been around 70%, however there are then more factors that come into play to make the gas commercial.

I wouldn't say anything is ever 100% guaranteed but I like the prospects in both blocks 105 and 120.

BTW I think the targets in 120 have far more upside potential that 105.

120 has an identified oil system, we will be putting a well in up-dip of that initial BHP well. And the CO2 aspect won't have so much of an impact on an oil system. Easier to separate gas from a liquid rather than gas from a gas.

So overall I think NEN has some very exciting prospects with huge upside potential.

Over coming weeks more information will allow for greater scrutiny of what these blocks hold.