agm questions answered

Well I attended the AGM today and believe that NEO are definately involved in a company making play in the SELH's JV.
The only concern is will they be able to get the SP over the line and the NEOO's exercised to fund it all or will they need to raise more cash.
It will definately go down to the wire on the timeline.

Firstly,
Hook up to the pipeline. Forget about it this year and it will be a struggle to even have gas flowing through it the first month of next year.
Unfortunately not NEO's fault, as they are a victim of circumstance and change of operator feeding into a multiple user pipeline and infrastructure will not make it happen any sooner than it takes.
The upside is that NEG are out of the picture and OPL is the operator. Good for all JV parties. NEG is an explorer not a developer and lacks capital to fund development as well as current climate allows them to negotiate good JV deals at the moment due to interest in the area. ie Pacrim, Renewable Energy etc. Them exiting is not a vote of no confidence in the project.

The good news is that next week Halliburton will start the extended fraccing program of JH1-1 the deeps (SG is looking at 4 weeks trouble free) then move on to testing 2-1 as previously mentioned which will probably mean flaring as pipeline will not be finished but need the flow data etc. AK was happy to give direct answers when asked direct questions so in summary.
• Based on all the available data and local experience from Jack West who has worked this area for 4 decades or so and been involved in numerous discoveries, all the mapping, 3D etc suggest/indicate as much as 52 million barrels of oil may lie below.
• Mudlogging of 2-1 was recorded as 4900 units even thought the figure was higher, as a reading of 5000 would have indicated pure methane that would not have been believed so it was recorded as a lower value. Mudlogger had never seen a reading that high in all his time, circa 30-40 years.
• Jack West had been involved in the Button well discoveries nearby that were in size from each well of 0.1 to up to 10 BCF of gas but all flowed at a rate of around 1mmcf day and has drawn strong comparisons based on data obtained so far with SELH’s
• An oil refinery somewhere not far is currently paying US$44 BO at 11 degrees API whereas the oil tested from JH is 36 degrees API so worth significantly more.
• Large anomaly in the Stevens Sand structure where good permeability can allow flow rates of oil in the thousands of oil per day not hundreds. Unfortunately will not be tested for some time
• Mentioned Hotcopper and the feeling that NEO should be divesting interests such as OPL, but believe they are onto a winner with SELH’s and increase their risk by divesting. Hence the further increase in SELH’s interests
• The convertible note was necessary to have the CF to participate in the next 8 weeks of activity that potentially could unlock some real value and get the oppies over the line as well as provide capital for further exploration/development.

AK as much as anyone and probably more so, wants/needs to add value for a multitude of reasons. Whether they can pull this off over the next 8 weeks time will tell, but they will be doing everything in their power to do. I don’t subscribe to the OPL conspiracy about SP suppression either.

The answer to Salty’s questions.

1. Why was a convertible note issued in favour of a (much more sensible and achievable) option underwrite.

Potentially could have a major shareholder in NEO if all goes to plan and something along the lines of raising money is not a simple task. I Mentioned that if oppies were converted it would dilute CN holders holding which may be a negative for CN holders. I guess he agreed in principle to that theory but did not subscribe to it.

2. Who is behind the Aton Fund underwriting the Con Note ? i.e. where is this 'select fund' listed ?

Not a listed fund, but private with funds managed in excess of 100’s million

3.Who were the 'London' based clients of Aegis Equities who received the last 3.5c placement (as no London addresses ever appeared on the Top 20 despite 35m shares being issued to that 'group').

Many participants in the 35M shares issued

4. Why does it appear that Andrew Waller has sold all his 06 options without disclosure to the ASX ?

Does not know anything about this

Dont get me wrong , I have total faith in the fundamentals of SELH , just cannot accept 06 oppie holders being 'sold out' as appears they have been by the lop-sided (and appropriately named) con note deal.

Not sure here Salty as if that is the case then he has sold himself out also.

Lastly as a treat to you all he said he would like to fly you all over there and show you just what has happened in the 12 months and the logistics behind what is going on. He has obviously been reminded often enough of the frustration felt.
As an example, to fracc JH1-1 they are looking at up to 40 truckloads of equipment, sand sh*t and whatever else they use, so it is like a veritable circus with the amount of activity going on.

NOTE: It was good to see they are not wasting money as there was no tea and coffee provided.