oilbarrel article, page-4

Ariante, the rest of the article from Oil Barrel follows:

Neon has also made a light oil discovery in California, where its Paloma Deep-2 well has highlighted the potential for commercial production from unconventional zones following an initial contingent resource estimate of 26 million barrels of oil with more zones to be tested. Operations here, which have taken longer and proved more challenging than expected, have now been suspended while Neon continues discussions with potential farm-in partners; it has rightly concluded that it needs to bring in an operator with experience of developing unconventional resources. News on this would be a positive catalyst for the stock this year.
The big rethink, however, is likely to be prompted by the upcoming wildcat campaign offshore Vietnam. The company holds two blocks in Vietnamese waters, Blocks 120 and 105. ENI now operates the acreage, with Neon retaining a 25 per cent position, and last year completed 3D seismic over both, with initial data sets confirming the plays originally identified on the 2D data. The first well is expected to spud in Q3, although a rig has yet to be contracted.
These are potential company-makers. Netherland Sewell & Associates reckons that 120 Block leads could host total unrisked prospective resources of between 633 million barrels (low estimate) and 7.9 billion barrels (high estimate). Two of these are candidates for drilling in the upcoming exploration campaign, with the best estimate unrisked prospective resource ranging from 461 million barrels to a high estimate of 1.7 billion barrels. Block 105 is thought to be more gassy, with seven gas/condensate leads estimated to hold combined unrisked prospective resources of between 1.7 TCF gas (low estimate) and 21.4 TCF gas (high estimate), with the most likely candidate for drilling this year carrying an unrisked prospective resource range of 3.9 TCF to 13.9 TCF.
Analysts at Canaccord Genuity, which have set a price target of A$0.78 per share with a BUY rating, say these assets “offer the re-rating that only a wildcat can deliver”, noting that the company will have an effectively free carry trough the upcoming seismic and drilling commitments on the blocks. With the first well on Block 105 pencilled in for a Q3 spud, that re-rating may not lie too far off.
Neon also has acreage in Indonesia, where the company is set to complete a 3D seismic survey over its Tanjung Aru acreage this year, completing its obligations under the PSC. This will help inform a decision whether to proceed to the second phase of the PSC, which would start in late 2014 and would commit the company to drilling a single exploration well. The 4,200 sq km blocks lies in waters ranging from 20 to over 1,000 metres in a relatively underexplored area of the Kutei Basin, one of Indonesia’s most prolific hydrocarbon provinces where more than 12 billion barrels of oil equivalent have been discovered to date. There are two existing gas finds on the block, discovered by Hess in 2002.

The company has a strong balance sheet following an oversubscribed placing in September 2012: indeed the targeted A$20 million capital raise saw applications for A$60 million allowing the company to increase the raise to A$30 million to provide financial flexibility. The placing was priced at 30c per share. Shares in the company are currently trading at 19c so there's plenty of headroom to reach the price targets set by analysts.