low risk upside

600,000,000 shares after the $0.27 mark is reached. (remembering that the underwriters of the SPP took there payment in shares to be realized at the 27 cent mark, management also get option at or around this point)

Deal is worth approximately $100,000,000

Cash on hand is worth 4,000,000 (as 1 mill will be spent on miscellaneous items, wages, Moyes and co etc)

No Debt

600 mmboe recoverable lets say half of that due to unforeseen circumstances, bad sands, etc. 300mmboe

Oil price, say 70$ per barrel, cost to extract say upper limit for a bit multinational is $35 per barrel (should be heaps cheaper as is onshore near roads and rivers etc as well as pipelines (hzn). So 35$ per barrel. NGE should get 30% of this after farmout (worst case) so that equates to around $10.50 per barrel profit.

300mmboe *10.50 is $3,150,000,000

Divided by no of shares

= $5.25 per share

Lets say the number of shares doubles to around 1.2 billion, over time (company likes to reward its executives) makes a book value per share price of $2.63 (this price excludes the 110 mil offered for farm in, for the existing 3 licenses and excludes any monies made for the next 3 farmedout licenses (august moyes and co presentation here implying further farmouts

http://energy.ihs.com/NR/rdonlyres/A4BE5789-474F-439A-9C70-79023013704F/0/II4_Moyes_NAPE_Aug09for_website.pdf and the preceding presentation here which got the farm in partners
http://energy.ihs.com/NR/rdonlyres/4AD3AFDC-3080-4EAF-91A3-05390298C964/0/MoyesNAPE0901.pdf ))


And that’s for only getting half of the boe they have on there land and without having to do any digging themselves (spending circa 220 mil on sandwiches or whatever) and basically without carrying a whole lot of risk. Current price is $0.195