This deal is MAJOR TIME for our little NEO.....some here have jumped ship and good on what you do next...hasty I say.
The WHOLE BIG DEAL has cost NEO upfront USD 2.5M and most of this will be funded by NEW investors who will pay USD 2.0M. This has NEO fronting up with basically the CASH they said was going into NEW Calfornian assets..... The rest by convertible Note with a cost of 10%.
For those who think further than just these initial announcements words.......does it now clear the smoke on why the NEO/OPL JV have not given any firm estimates on the JH reserve estimates??....I cannot wait to see the exact ground they have secured......and what the Geologists believe is below.....Given the OPL and NEO experience.
NEO would do well now by following up this GROUND GRAB by farming out TARGETS???? for drilling with minimal Cost to NEO or even possibly a free-carry. Perhaps NEO could cut OPL in on the action.....or bring in some other Aussie oilers?
The NEO sp has responded neutrally to this deal given an OFFFFF day for most Oilers.....and the recent large scale oiler sell-offs while NEO was suspended.
Dont be sad I say to the NEOnervous....this adds a third dimension to NEO and the consolidation will give the NEO SP some instant Credibility. REAL Valueing will come on reserve estimates and flow rates......which are now surely Greased for release?? NEO are now a big blip on the RADAR....not the ant scurring around MAKING discoveries.
Its daring and audacious.....I like it. Lets see the market after this news is digested!
G.....from NZee
NEO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
