firm finish, page-28

Hatmopit, from what I have seen on the threads recently there is a lot of misunderstanding about the size and timing of the Californian Assets.

Certainly we are all attracted to the 50MB++ type targets but the much smaller CA targets are a case of the cents adding up to dollars.

Right now the company appears valued on the NSA producing field of 3.%MB discounted for the Vietnam wash up.

Producing CA assets sell for about $8-$10 in on market transactions which is say 5.6cps.

Many posters seemed to have missed the important point that Neon has recently permitted 6 wells for near drilling including 3 at Glau(immediately adjacent to NSA) and 3 at Mountain View. Close and pending are 3 wells at Paris Valley which has already been proved up by 30 old wells.

Paris Valley alone has 9.1MB at stake which would propell Neon from 3.5MB producing reserves to 12.6MB all on 100% owned permits.

That alone would be worth 19cps.

Glau and Mountain View are yet to be detailed in terms of targets. I have looked at the areal coverage for both and have made purely my own estimates of size. I believe Glau could be 5MB and MV about 2MB.

Thats another 11cps if all come in which may or may not be the case.

All those projects could be drilled first half this year if funds are available. Its likely from what Neon stated recently that one is likely to be started this quarter. probably PV given the streamlining of oil regs to overcome some of the State and County issues(interference).

Personally I am betting on Paris Valley as this is a low risk appraisal scenario with the biggest gain at 9.1MB and upside from there. PV is very well documented and is also documented by the CA govt oil/gas agency. Most recent govt figures put PV at 100MB oil in place based upon 1970's well recoveries. Given how much the game has moved on since the 70's I expect there ought to be good upside to the 9.1MB deemed recoverable .

Aside from what I have covered Neon also has Paloma which was estimated to hold 30MB recoverable. This one is technical challenge requiring outside expertise. Whether it comes off who knows at this stage but if it did happen to its actually not that much smaller(net) than our past target in Block 120.

Beyond these are several other CA acreages in relative proximity to one another the most notable being 12000 acreas in the NSA area.

So while individual projects are small to mid size the cumulative effect is significant. The limit is the cash available so it will be necessary to cherry pick projects initially until momentum builds.

PV and Glau seem good starting points with the wildcard of a Paloma farm down thrown into the mix.