warning...oil may fall to $20, page-26

Will the share price of Nido follow the price of oil down. You bet ya. Do i like that no. Forget about down ramp and up ramping. Study the facts. Nido has one producing asset, which management have said to me three times (ceo, deputy and legal lady) production profits will be used for exploration. The higher the price of oil the more nido drills. As the price of oil is falling this means short term they are not going to drill many wells. Deep water costs 30m and inshore 15m each. Galoc production at 3500 barrels a day at lets say $50 a barrel that is only $63,875,000 a year. Cost of production is around $20 per barrel. So profit is only $38,325,000. So every yr for the next three yrs, we can drill one offshore or two inshore wells. Lets not forget the corporate overhead costs as well. Nido will have to capital raise to accelerate the drilling which i don't think will happen. Plan A of using golac production for drilling in this environment unfortunately not going to give nido much. Plan B of a super major on board. Still waiting for that one. Been saying that for three years. Plan C dont have one at the moment, but hopefully looking at buying another producing asset, as they are cheap in this environment.


Lets not forget that 1 in five wells is an oil find. So the person that thinks nido is going to find 11 billion barrels is kidding them selves. And besides that oil in place not recoverable you turkey.

This time next yr we should see some drilling, lets all pray they hit something in the offshore or 9 cents is going to look expensive. If we hit 9 cents was a joke.