105 value on success?

Idean, You've had some good answers to your value question. Stapleman and Reactor provided unrisked valuations given a future success scenario while Ya provided a risked valuation to give a value today.

Both are correct but for two entirely different scenarios.

As I understand it you wanted a value on the day or thereafter for commercial success at 105 assuming the mid case of 3.9TCF of gas.

Reactor uses actual sales transactions so his figure is certainly indicative of a success value for 105 assuming commerciality. I typically approach it from a barrel of oils equivalent. The thermal gas conversion uses a factor of 6 to convert oil/gas but this is of limited use in valuation as prices of gas vary all around the world and gas is usually cheaper for thre same thermal output. I use a conversion of 10.

Applying my approach I come up with a very similar figure to Reactor.

Notably the two approaches use actual market data or transactions. In my case I have used Karoons share price rise verses discovery size to determine a price.

If Reactor and I are right then we are both sayiing a price around #1.30 to $1.40

These values will not be able to be isolated as such given the projects that Neon has that are actively pursuing added value.

First and foremost will be the 3D seismic for Block 105. If you read the Neon website summary for 105 they are expectant of the resource target size to be upgraded. At this point in time the assessment is for two stacked zones. They are now of the opinion there are multiple zones. Say for example the new resource figure is 10% higher then the price range above ought to be 10% higher.

Secondly success at 105 would have the pschological effect of lifting expectations about Block 120 so there would be some sort of risked value for 105 included in the sp.

Success at NSA with the water disposal bottleneck and the possibility of significantly enhanced production from steaming could also add value in the timeframe to 105 success.

Thirdly the Glau seismic will shortly be known, which, if it is indicative of target zones similar to NSA will also add value as this drill campaign will roll out quickly given the cheap shallow onshore nature of the project.

Beyond that there is the 3D for 120, Indo update, and the wildcard of Paloma.

Price on success will certainly be very very interesting to say the least.