something sneaky going on, page-4

For mine the answer lies with the news leaking out, as it does, a the Bulletin regarding the stock 'The Speculator' is punting on this week. Generally seems to be high volume on the Tuesday before the Wed publication of the magazine. Below is Haselhurst's report trumpeting NEO's virtues - (wish I was holding, good luck to all of you who are...HayMan.
____________________________________________
California scheming

http://bulletin.ninemsn.com.au/bulletin/site/articleIDs/E698ABC9016A460ACA2571C3001CFA88

When all the leaves are brown and the sky is grey - you'd be safe and warm, if you were near LA. David Haselhurst is on song.

The share price of oil and gas junior Nuenco NL is on the skids and may go lower as shareholders contemplate an impending 11-for-one consolidation of its shares. Nuenco (ASX code: NEO) has slipped from a year’s high of 4.9¢ a share to a recent low of 1.7¢ and last week traded around 1.8¢ to l.9¢. At the latter price, the stock’s 868 million shares carry a market value of just $16.5m. But I can see some light at the end of the drill string and this stock, following the restructure, has every chance of earning a re-rating.
It’s nearly a year ago that this column first looked at Nuenco with the comment (B, Sept 13) that “not many of the junior petroleum explorers can boast complete success from multi-well drilling in their first year”. Nuenco could make the claim, having participated in two discovery wells in California plus four successful appraisal wells in the year to last September. The shares were trading around 4¢ each but since then the amount of paper on issue has near doubled while the price has halved.
Nuenco was born out of the recon-struction of Anzoil NL in mid-2004. It involved a shower of new paper, including 100 million shares issued at 2¢ to fund the company’s entry into joint ventures in California involving the Australian-listed Orchard Petroleum. The consortium has spent $8m drilling the first six wells on its 50%-held South East Lost Hills shallow gasfield including a pipeline to link it to markets. This field is estimated to hold a gross resource of 50 billion cu ft of gas, which would attach a value of “at least 9¢ a share to Nuenco” ahead of the planned consolidation, according to managing director Anthony Kain.

Below the gas horizon, the company has identified oil in deeper Monterey sands. Kain confirmed an estimate of the total gross reserve potential of the Monterey to be 30 million barrels of recoverable oil, which “would attach a value of at least 8¢ a share to Nuenco now fully diluted”. Another director, Andrew Waller, has shown his confidence with the purchase of 200,000 more shares at 2.3¢ on June 22 to take his holding to 3.6 million shares.
Nuenco’s recent big play has been the $US5m purchase of 50% of Surf Petroleum Inc, a privately owned Canadian company with rights to acquire a 100% working interest in oil and gas leases covering 152,000 acres of California’s San Joaquin basin. Half was paid in cash and the rest in a convertible note, leaving Nuenco with net cash of $3m and potential to farm out exploration over Surf’s extensive land holdings.
Nuenco was one of 30 small to mid-sized energy groups to present papers at the Excellence in Upstream Energy talkfest in Sydney last week. One of the sponsors, Martin Place Securities, picked its stock selection for an energy portfolio: 30% spread between BHP-Billiton, Woodside and Santos; 30% among mid-caps such as Petsec and Anzon; 25% in microcaps such as Amadeus (one of ours), Stuart Petroleum, Arrow, Liquified NG, Planet Gas; and 15% in explorers Central Petroleum, Great Artesian, Bow Energy and Fall River Resources.
We picked up 110,000 Nuenco shares at 1.8¢ each, which will condense to just 10,000 shares after the consolidation subject to shareholder approval. We also had to pay a bit more for our order of Australis Aquaculture shares to 38¢. To cover the outlay we sold our remaining Citigold when that stock ran to a year’s high last week of 48.5¢ – a nice return having bought at 16¢.
Our other energy “el cheapo”, Longreach Oil, is nurturing its newly formed offspring Austex Oil to a planned listing later this year. The American-focused Austex has issued 18 million shares at a notional 25¢ to buy a block of leases in Oklahoma, with an estimate of a remaining recoverable resource of 758,000 barrels.