a very attractive speculative buy, page-21

Nathan the Paloma project has been responsible for the majority of that cash burn, in particular the deep well PD-2 which had a raw cost of approx $5M.

Paloma is the largest project so far undertaken by Neon. At stake is a gross cash flow in excess of US$2.8Billion based on pre drill estimates (it would appear the pre drill estimates have been exceeded).

So well worth the cost given the potential pay back. Given our production unit at NSA pays the company overheads and a little exploration/appraisal you can imagine the effect Paloma cash flow would have on Neon given it is a minimum of 8X NSA.

Expenditure for the next 12 months will consist of modest expenditure at PV for up to 3 shallow wells, free carry on the four wells testing at KMD, near free carry on the two wells at Vietnam, upgrade and thermal costs at NSA, possible seismic at Indo. All of this is well within the current bank balance.

Expectations are that NSA will generate greater cash flow as a result of thermal treatment. P-3 at Paloma, the shallow gas well can be brought into production quickly if testing is successful adding to NSA income.

Paloma deep wells will be tied up in testing for some months yet but once complete these wells can be put on production assuming success.

I don't think it would be unreasonable to think the companys cash balance would drop over the next 6 months but pick up in the following 6 especially if all Paloma wells are on production. I would think we might be looking at culmulative production of a minimum of 1000bopd by then or some US$9M a quarter.

Personally I hope we will be exceeding 1000bopd by some significant margin by then.