Greetings all.Just got back from a nice break in the Bahamas. I...

Greetings all.

Just got back from a nice break in the Bahamas. I notice a few interesting developments in the land of NEO. Thought I would give my interpretation of the recent announcements.

1) Some people have attached negative connatations to the recent technical problems with JH 1-13. It appears that this was caused by gas influx. Heck I'd be happy if there was so much gas flowing into the well-bore that I couldn't safely drill further!
2) People seem disappointed that there is no oil. Why? This well was always targeting the shallow gas, but it appears their may be some bonus oil i.e. "hydrocarbon shows". Heck gas is more valuable than oil in California anyways. It's shallower, less expensive to get out of the ground and has much, much higher recovery rates.
3) Timetable delays are frustraitng people. Some investors are forgetting that we are drilling in California. It's energy hungry, but also regulation heavy. There is a process for these things people. The fact that the JV is taking its time is because they are dealing with a complex resource, not a small accumulation. If you are still frustrated, get out instead of moaning to the rest of us.
4) Lack of presentation enthusiasm. It seems some investors are desperate for flow rates, reserve estiamtes etc. These estimates take time to firm up. Any company that gives you this information leading up to or shortly after a drill is more interested in pumping their own share price so that managment can uncerimoniously dump their personal holdings rather than create long-term shareholder value. I should know - I used to work for several oil companies. Anyway in my opinion the announcements have been very honest and upbeat. If you read carefully you can see we are sitting on an extremely significant resource. I'd rather invest in a company that is legitimate, rather than get burned by mindless ramping a la BAS and OEX!
5) Lack of share price rally. Why would there be? The stock is already tightly held and the big holders can sit back and happily pick off more shares on the cheap from unsophisticated investors selling for cents on the dollar. I'm happy to let my buy orders sit and be hit, rather than make the market run. It will do so in its own time.
6) NEO increasing its working interest. It was obvious that they do this, and they got it for a bargain.

One thing to remember is that management are really focussed on creating shareholder value. Anthony Kain et al primarily own options which expiry on the same date as all the other listed options. Do you really think he can dump all those on the market? Not a chance! He is in for the ride and his interests are totally aligned with shareholders. The fact that Utopia was divested to focus on California tells us that he is confident enough to put all his chips on one horse. There are market sensitivities to consider and I am certain those with patience will be rewarded very soon.