In the light of the fresh and more complete understanding of the...

In the light of the fresh and more complete understanding of the likely cost to NEO of the drilling and bringing into production of Jumonville #1 I have done some fresh calculations.
We do not know yet for certain what the actual cost of Jumonville is. We can just estimate on basis of some information that was released during the drilling.

For NEO it now seems reasonable to suggest that the cost will be in the vicinity of US$ 750,000 to perhaps US$ 1 million.
It then becomes important to judge when NEO is going to move into positive territory for this investment. When is payback for this cost ?

What also becomes important is the final flow rate achieved from the well as the figures will show.

[NOTE: For ease of calculations I have taken a figure of US$50 nett per barrel. Makes it easy then to add or subtract at US$10 per barrel]

(1) If the flow rate is just a basic 500 bopd then NEO's yearly production share would be 9,125 barrels @ US$50 = US$456,250.
(So it would take nearly two years at that rate to break even on the cost of Jumonville#1)

(2) If the flow rate is at 750 bopd then NEO's yearly production share would be 13,687.5 barrels @ US$50 = US$684,375
(So it would take about just under 18 months at that rate to break even on the cost of Jumonville#1)

(3) If the flow rate is at 1,000 bopd then NEO's yearly production share would be 18,250 barrels @ US$50 = US$912,500
(So it would take about just about 12 months at that rate to break even on the cost of Jumonville#1)

(4) If the flow rate is at 1,250 bopd then NEO's yearly production share would be 22,812.5 barrels @ US$50 = US$1,140,625
(So it would take about just under 10 months at that rate to break even on the cost of Jumonville#1)

(5) If the flow rate is at 2,000 bopd then NEO's yearly production share would be 27,375 barrels @ US$50 = US$1,368,750
(So it would take about just under 8 months at that rate to break even on the cost of Jumonville#1)

In other words for every 250 bopd flow rate above a basic 500 bopd then it improves NEO's nett income pa by US$228,125.

So we have to hope that when the flow test results come out towards the end of this coming week (my guess) that they are up close to 1,000 bopd.
If they come out at about Strachan Corporate's prediction of better than 2,000 bopd then we can rub our hands in glee.

Of course I am also being hopefully conservative on using a nett figure of US$50 per barrel. We will just have to see. But an actual higher figure per barrel changes the picture again positively for NEO.

Right, hopefully those figures are a bit more accurate than previous efforts.