The following is my logic working and drawing together my research and what I would do in the same circumstances having worked in risk, ASX 100 companies and requirements of company reporting.
The data from PD1 was only ever partial and did not flow long enough to meet the standard to make a P1 or P2 resource upgrade hence, Ken saying contingent resource at the GOC, although both fall into PIIP.
If Ken had made a statement on the back of incomplete data (for example the debarcle of AOC) then I supect he would be fronting ASIC for a chat? So in assuming this, I believe that the data was incomplete and as such not price sensitive. Any statement around contingent and particularly P1,2,& 3 is dynamically price sensitive. Also from contingent resorce the next level is proved, P1,2,&3 and this is a different kettle of fish altogether.
What I think happened prior to PD1 shtting down was that they may well have found a monster and as Ken is on record as saying either the conventional or non-conventional have the capacity of doubling the size of NEN. Therefore if both are realised and my suspicion is that they will be then this will quadruple the size of NEN.
The other consideration is the management team, I don't know a lot of oil management teams however, I have worked in a numberof management teams and the NEN management team have all the hallmarks of a quality management. If you look at their history when they make an announcement you can take it to the bank unlike some other management teams.
If I am right (I hope I am) then Paloma will be a game changer for NEN whereby a number of possibilities will present from a take over, buyin from a larger company, farmin dependent on the P1,2 &3 and the SP of NEN will take off like a rocket, as all research has very much underrated Paloma and just looked at Vietnam.
If you have a look at the history of Karoon gas this is a reasonable company to compare NEN to if Paloma is big. Also, if this comes to pass, I suspect NEN will initiate a credit facility as they will have resources that will far out weigh any liabilities or potential downside to the company.
NEN Price at posting:
30.0¢ Sentiment: LT Buy Disclosure: Held
