Thanks TShirt,When I spoke to NEN they were very confident that...

Thanks TShirt,

When I spoke to NEN they were very confident that they had overcome the problems they faced with PD1, patrticularly the permeability, porosity and pressures prior to firing the perferation gun. However, they did say things were well underway and that this could take weeks to complete the tests. I did not know enough about testing to delve any further. Apart from the ongoing testing from PD 1 the testing of PD 2 I assume, would be faster given that this is an extension of the PD 1 prospect and Ken mentioned it was exactly as they had thought it would be.

Also, Ken did say on the BRR that the unconventional had been tested so I assume that they have those initial numbers and are quantifying them against the extent of PD2. I suppose the P1 report to be released will encapsulate as much of Paloma as possible and this does take time. This is why I suspect that Ken was comfortable in pushing the numbers that he did at the GOC. I do not have my notes with me but this places the contigent resource between best and high, well before they started testing PD2. Then looking at the Solimar report where they have flagged "considering the potential substantial size of the oil reserivors identified" and them taking a lesser percentage, I read this as two pronged:
1. The substantiial size and free carry they have will be all they they want as far as return goes given that they did not expect such a significant find?
2. The development costs will retard them from their own strategic plan?

The other thing I have considered is the Patterson report Risked Exploration and Apprasial Report. They have Paloma at a GPR of 191.8mmboe with a Net Resource (NR) of 143.8mmboe giving a unrisked $ps of $2.33(subtract 18% of this from the CR). What is of partcular interest is that they have risked it at 5%, giving Paloma a $ps of .12 cents, this report was dated May 2012 and very early in the PD1 exploration, before the Solimar release and long before PD2 was spudded.

The stock analysis report June 2012 (on the NEN site) suggests 15mmboe which is half of what Ken suggests from the GOC and very consertative given where we are now.

I know I have bandied around some numbers here but they are documented numbers. With the P & C resources of most interest. However P1 & C1 are calculated from PIIP.

At the moment all the chatter is about Paloma and this is fine but PV and NSA are sitting in the wings and this is before we get to Asia.