view from solimar energy

While the announcement today about the gas sales agreement is basically identical between the NEO document and the SGY document there is at least one interesting comment in the SGY release that has obvious implications down the track.
On page 2 of the Solimar release is this comment :

"Although it will be several months before natural gas is delivered after the
completion of the gas transportation pipeline, Solimar Energy, and its partner in the
Southeast Lost Hills Project, Nuenco, are hopeful of capitalising on the high gas prices in
California. We are also hopeful of adding reserves and production volumes through either the
existing wells or through new drilling opportunities in the discovery area.”

Now it is that last sentence in particular that is of interest.
First : Solimar is still dabbling with the "existing wells" = presumably the two most likely after JH 3-13 which are JH 1-12 and JH 2-13. They haven't given uo on them yet. Despite the difficulties with the well bore damage to these wells they are still trying to get them sorted out.
I noted some time ago that JH 2-13 initially was seen as a well of potential. It did have good gas pressure when first drilled. Pity it got butchered.

Second : The obvious implication in the statement that Solimar want to drill more wells in that neck of the woods at SELH. They believe there are more significant pockets of gas down there in the area around Jack Hamar that new wells could target.

So the SELH area could see SGY and NEO getting more gas supplied either from the other two "difficult" wells or else from drilling some new targets. May take some months before they select some new targets and get onto drilling but it ain't all over yet at SELH.

Things are just starting to kick into gear IMHO. When NEO starts to get the cashflow from JH 3-13 then it could be reinvested into further drilling to increase the gas supplies and increase the cashflow.