number crunching on commercial success !, page-2

It will all depend on how the mkt reads the newsflow when Cl-ST1 flowrates r announced.

There r plenty of stks on the ASX with NPV valuations for their projects, yet their SP languishes way behind these estimates, so no point in discussing discount rates, POG/POO etc.

One would expect CL-ST1 to derisk itself to an extent after the flowrates r annc'd (eg: 20-40 MMcfd). After which the mkt would ask what nxt, when's the nxt well planned etc.

For now we'll just have to use the back of envelope calc's for CL-ST1 that's on their broker reports on the website.

Cua Lo:

Best estimate 3.9 tcf x 25% NEN's equity x 50c/mcf x 25% risk factor divided by 555mil shares

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For Ca Ngu, the target is the Lwr Pliocene 5.6 Ma reflectors which look good & could b either oil or gas bearing.

Best estimate 181 mmbbls x 25% net x $5/bbl x 25% risk factor div by 555mil shares

High estimate is 420 MMbbls (or 105 MMbbls net to NEN)

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From a development perspective for CL-ST1 in years to come, analysts reports will have to address the following questions,

- how big is Cua Lo(eg 3.9 Tcf gross recoverable gas)

- how soon can it b commercialised, ie timeframe (eg 2016)

- what's the gas/condensate ratio (eg: 4-8 bbls/mmcf)

- what's the CH4:CO2 ratio (eg: 80-20%, 90-10%)

- what's the devlpmnt cost (eg: DF phase-1 cost USD 394mil in 2003, phase-2 in 2006 cost extra)

- what sort of infrastruc is reqd (eg: 22" pipeline, 1 or 2 unmanned platforms, no. of appraisal wells)

- future gas sales agreement (eg 20yr GSA like CNOOC's)

- where r they going to pipe the gas (eg: Vung Ang I or II Power station 105kms west on mainland Nam or 40-60 kms northeast to the main DongFang platform hub via a 22" subsea pipeline & sell it to China - which I doubt).

- Price of gas & tax regime in Vietnam etc