new neo

The confirmation today of the oil and gas results from Jumonville #1 surely puts NEO onto a new path from here on in.
With the well currently producing 520 bopd and 293,000 cubic feet of gas per day it is clearly a winner.
Obviously the expectation is that the well will produce at a higher rate once all the things are set in place (about 2 -3 weeks). So we can expect a possible rate above the current 520 bopd .... maybe getting up towards 1,000 bopd.

Let's just be a bit conservative and say at the moment that it could be 750 bopd plus gas to be sold as well once the pipline is set in place.

Now Jumonville#2 will spud in about 6 - 8 weeks ... say late November (early - mid December if past record is anything to go by). It will be intended to produce from the Cib Haz layer if it proves to have what they expect.
Assume at least similar production.

Then it is likely that another 2 or 3 wells will be drilled into the structure to enhance production.
Therefore we could have about 4 or 5 (say 5 ) wells all producing around 750 bopd by about a year from now. Maybe earlier..... maybe by June 2009 all going very well.

So 5 wells @ 750 bopd = 3,750 bopd with NEO's share being 5% of that being about 188 bopd.
So 188 bopd @ gross US$100 per barrel = US$18,800 per day or a gross of about US$6,862,000 per year.
Even if costs and taxes and royalties took 50% of that it would still represent a nett income of about US$ 3 million to US$ 3.5 million.

And of course there is the cashflow as well from the sales of the gas.

So has NEO turned the corner or has it TURNED the corner ????