NEN (ASX) getting closer

Originally posted by Timber7 ↑

Dear Timber7,

The future offers many options if a good result transpires from the current drilling programme. Your post almost makes me want to put the cart before the horse! It is that word 'potential' that has everyone keen I think. The potential is massive which makes the waiting all the more tiresome. If the potential was small the expectation would be small and who would really care about the outcome?

However, as W. Clement Stone wrote, "Aim for the moon. If you miss, you may hit a star." I think that sums it all up with my holding in NEN. The size is awesome, even a little bit of that estimated by NSAI and the company are big numbers!

Which leads me to think about the future (without getting ahead of myself about the results we await) and what the company might try to do into the future. As we know there are about 12 potential leads combined in Block 105 & 120. ENI has the ability to use its size and profitability to monetise any finds, NEN doesn't. So NEN it seems must turn its existing (hopefully successful) equity share into a smaller share because it can't simply start writing cheques for offshore production wells.

I take it, any reduction in equity for cash could then be used to employ the same method for other potential leads on the Blocks and so it goes on.

Or does ENI simply say here is a billion dollars in cash 'leave us alone now you stone in our shoe'? It is fascinating to think of what a good result could do for the company and us holders.

Does an equity sell down mean the company wouldn't have to sell down its Tanjung Aru equity stake as much because both NEN and Krisenergy could fund a drilling campaign without a big operator like ENI? Would NEN and Krisenergy want ENI even if they did sell down their equity in Block 105 or 120 to ENI for cash because ENI are a serious and competent player?

Could NEN simply turn up in California and start building wells in PV, NSA and Glau at its will with any new cash or is any equity sell down too far into the distance for that?

I don't know what the likely next step would be should we receive good news in the near future. I would interested to know of any considered views as to the likely next steps so I can better understand where I might be headed with my holding.

PS Dear azoic, I had a look at the Vietnamese gas prices and they are about 50% higher than the US prices because it appears Vietnam is a net importer of gas which is needed to help with the industrialisation of the country. It also partly explains why the Vietnamese government is keen for the development of all its offshore blocks.

PPS I found the following conversion chart useful following bingdc's post about the value of a TCF of natural gas.

http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=10&ved=0CGIQFjAJ&url=http%3A%2F%2Fwww.extension.iastate.edu%2Fagdm%2Fwholefarm%2Fpdf%2Fc6-89.pdf&ei=AMV6UqumLK2kiAeMy4D4Cw&usg=AFQjCNFQCcpt_0kMWuhytD_nZnZ17ogU4g&bvm=bv.55980276,d.aGc&cad=rja

GLTA