re: the weekend australian write up about neo here Weekend...

re: the weekend australian write up about neo here Weekend Australian Career One section RESOURCES page 10.

Aussie junior taps new life into overlooked gas

Robin Bromby

NUENCO NL and partner Orchard Petroleum have sunk five wells looking for gas in California - and have come up trumps in each case.
Their project area is in a good neighbourhood,just south of the Lost Hills oil field where ChevronTexaco estimates there is still 2.6 million barrels of oil to be won.
This week both companies upped their ante in California,firstly by buying out minority partner to give them 50 per cent each of the project that includes the Jack Hamar field.,and then by farming into land held by Robert Friedland's Ivanhoe Energy.They will share 50 per cent of that acreage and so move their boundaries closer to Lost Hills.
Nuenco managing director Anthony Kain believes Orchard and his company can start producing gas next year at the rate of about 3 million cubic feet a day,lifting it quickly to above 5 million.At an expected gas price in North America of $US14 or more for every 1000 cubic feet by early next year,that means a good revenue flow for the two Australian juniors.
'That'll pay for a lot of wells,' said Mr Kain.He said the objective was to get up to 100 wells in production to take advantage of soaring gas prices in the US.
Gas was now worth as much as oil in the US.If the price goes to $US14 as indicated by futures contracts,that means income of $US 84 for just 6000 cubic feet,the equivalent of a barrel of oil - well above what oil is now.Moreover,gas flows naturally to the surface,whereas oil has to be pumped.
'It's a very compelling story,' said Mr Kain.
And the set-up costs are nothing like they are in Australia.Nuenco-Orchard had to build just 3km of pipline to tap into existing infrastructure.
Nuenco is the reborn Anzoil NL.
When Mr Kain took over the reins last year , its main asset was a producing well in Queensland that provided minimal profit for the company.That was sold off to Bounty Oil & Gas and Nuenco went looking in the US.
So much gas remains untapped because earlier oil explorers did not want it,not surprising when it was selling for US50c per 1000 cubic feet; even by 1997,the price had managed to rise to just $US1.50.