This is the article that I wrote regarding the shale play for...

This is the article that I wrote regarding the shale play for NEN in October 2012. Please note this does not include LS or any other area other than the shale and the potential that this will have for NEN. I am still of the view that this is a sleeping giant for NEN at Paloma and interestingly NEN have been relatively quiet on the subject.

“I have been doing some reading over the weekend and have a proposition based on the current findings and news of Paloma and Solimar.
I would suggest that unexpectedly for Neon, the shale find has become the main play for Paloma as it extends vastly across the current acreage and possibly beyond and this is why the increase in the land holding has proven important, apart from the NSA and Near Field plays. (I would suggest that it was unexpected by OXY as well given the 10 or so wells that have spudded adjacent to Neon’s acreage.) As a result of the size of the shale play, Neon are investigating the best alternate means of extraction of the shale such as modern stimulation techniques coupled with horizontal development drilling and whether vertical and other means of extraction will be best rewarded. At the GOC Ken said they don’t know how big it is so with this, P1&2 could be a little while away. Hence, I surmise that this is why LS tests have not started.
Neon has estimated some 366 feet of gross pay (276 feet net) in the Antelope Shale section currently being tested which is across the 2,847 gross acres of Neon’s acreage. Oil resource statistics similar to those for the surrounding fields if replicated will return a significant light oil resource. Data of the largest adjacent field operator OXY and supported by DOGGR indicate that average flow rates for vertical, artificially stimulated, Monterey Shale producing wells recover over 350,000 barrels of oil equivalent per well spaced at 10 acres. The well spacing estimated by Solimar is at an average well spacing of 15 acres, which represents upwards of 65 mmboe for the shale play alone.
How this will play out as far as Neon is situated I don’t know, maybe it could be a JV and I think if this is the case OYY would be the short price favorite given the number of wells that have been spudded adjacent to Neon’s acreage. It could also be as you mentioned some time ago, to get the initial well’s going and this will finance subsequent well’s as a spread of around 15 acres or so will be costly as it suggests 180+ wells. However, with a return of 65 mmboe there will be plenty of dollars to come back to the bottom line.”