The value on success is significant for a number of reasons aside from the S/P increase. Following the report today 105 is now de-risked even further with more prospects and oil to boot, as 105 was seen as a gas play. Initially there was one play with the results and analysis of the 3D there are now 7 plays. Which gives a S/P high est., of $2.40 on block 105 alone. Best est,. is about $1.30 with the S/P today this is a hansom return and one that I would be happy with. Looking at the report (I had a very quick look at lunch time)the river of sediment flows into block 105, not out of it. Again this is a positive for Nen. Based on todays report I really do not think there is much doubt that Nen will find gas, it's the quantum that will dictate the S/P. I can see why KC has whipped himself into a frenzy on this data.
If this is taken as a given then the overall impact to Ne will be significant in that every thing changes. For example Neon, could go it alone at Paloma rather than have a farmin partner, after all there is in excess of 2,500+ acres of shale sitting there. The knock on effect to block 120 will be in the mix as well and again this will have appositive effect.
There are some exciting times ahead over the next 4 months and Neon will finally get the market attention it deserves. As I said previously if you are not on the bus it is time to get on as it is leaving the bus stop.
NEN Price at posting:
28.0¢ Sentiment: Buy Disclosure: Held
