paloma...what we know to date

Just thought a summary might be helpful.

Sept 2011: Predrill we were targetting 7 possible hydrocarbon zones with a possible 33MB, 28MB net to Neon.

Nov 2011 : Neon declares hydrocarbon shows in 8 zones with the Round Mountain target not penetrated. ie two more zones than originally thought.

Nov 2011 : The upper Paloma sands have some prelim reservoir calcs run. This was a pre drill target of 1MB recoverable from an in place resource of 10MB.
Calcs say 33MB in place suggesting 3.3 MB recoverable or #X predrill expectations. Currently in appraisal June/July 2012.

Jan 2011 Commercial hydrocarbon flows from testing lowest two zones intersected. Some ambiguity as to which of the zones contributed how much.

Debris from well completion method prematurely ends test.

March 2012 :Lower Antelope Shale preliminary test has results similar to other producing wells in the Paloma field at competitors locations.

Prelim reserve calcs suggest recoverable oil of betwwen 7.9MB to 23.6MB. The later being dependent on areal coverage which is hoped to be confirmed by PD-2 (now drilling).

The pre drill target for the entire Antelope zone was 7.7MB recoverable. Tests of just the Lower Antelope have equalled this estimate but with upside to 23.6MB with substantive testing to be done on the Upper Antelope Shale.

It appears the Antelope Shale could exceed predrill estimates by 3X+.

May 2012 : PD-2 and P-3 spud. Antelope shale continues being tested.

June 2012 : P-3 at target depth awaiting rtesting. PD-2 passed 10000ft drilling ahead to 13600ft.

PD-1 still testing.

In summary we have two zones that suggest pre drill estimates could be exceeded by 3X. Further upside lies in the fact that only 27% of the apparently productive Fruitvale shale was drilled. Similarly there may be a further reservoir in the undrilled Round Mountain formation. The commercial flows from Fruitvale/Lower Stevens have not had any prelim reserves figures calculated but clerly theres oil there.

With 6 further zones to get feedback on I would expect both mixed results of some zones commercial and the possibility of some not being commercial.

All up the pre drill estimate looks achievable of 28MB recoverable. I also don't think it will be much of a stretch for that 28MB to be exceeded by quite some margin.

The boys will hopefully over deliver.