price action today, page-2

Main obstacle holding back NDO is Galoc imo.

Read Jo Williams' reply to mbramich's email courtesy of mbramich:

http://www.hotcopper.com.au/post_single.asp?fid=1&tid=952097&msgid=5306160

Question:

Hi Jo

I have been pondering the latest round of problems at Galoc which of course are still not resolved and with the current weather system in the region may still be a way off. The June Qtr of course declared as expected a cash build. It is now almost certain that the Sep Qtr will reverse most if not more than this build and leave you with around $5M - $6M in cash. I am not certain how this will impact the financing of Tindalo and I am sure you cannot comment, but you may be able to comment on what is happening at Galoc in terms of a better long term solution to manage the inevitable and frequent disconnects that will be required due to weather. Surely what appears as a considerable risk of downtime of 1-2 months to repair damage caused during disconnect is not going to give NDO and its shareholders the substantial cash flow you mention below and for which I personally hoped would fund Tindalo etc without further capital raisings being required. Is anything being done by GPC to further de-risk this situation going forward? I understand improvements were made after the first disconnect which appear to be insufficient. Are further improvements being undertaken or at least considered? It would be good to know at least if this situation is likely to keep re-curring or if there is some light at the end of the tunnel.

Thanks again.

Best Regards

Answer:

Hi Mark,

With Galoc, it continues to be frustrating getting back online for all of us. The weather is not being friendly to us unfortunately. It would not be causing us an issue if we were online, but wave heights of 4-5metres are preventing the overboard work on the riser. We have a few days work to do once the weather allows us to back working at site again – the forecast says today is the worst of the expected seastate conditions, so we should be on the improve, but you never know.

As you’ve suggested, we are in fact looking at longer term fixes to the Galoc production system as a part of the Phase 2 development options. A whole range of possibilities here – optimising uptime with capital investment will be the most important criteria. We expect to have worked through the Phase 2 options (including this and further drilling opportunities) over the next several months.

Hope this helps,

Jo