Chillam/Staples proof of a commercial discovery at either or...

Chillam/Staples proof of a commercial discovery at either or both Vietnam targets will give an sp spike. Ideally two spikes for two commercial discoveries. After the initial euphoria the price will settle at a lower level.

Then a touch of time factor will effect the price. These offshore wells could take 2-3 years to develop so cash flow is at least that far away.

In the interim the discovered resource once independently assessed is a very tradeable item. Options for Neon include debt financing, partial or whole sale of one or both resources and the possibility of takeover. They could of course also issue more shares which at that time would not have a major dilution effect.

Operating options for Neon could be quite varied given any succesful discovery raises the probability that other targets in the permit area are likely to be hydrocarbon bearing. This could mean an extended exploration or appraisal programme.

Given the possible value of the initial two wells I imagine Neon would look at some mix of finance options above.

Typically when a junior oiler makes a good sized offshore discovery the sp spikes then falls away to a discounted price level reflecting the time to development. As production gets close the sp appreciates to a level more in line with the expected asset value and cash flow. That maybe a price higher than the discovery price but being 2-3 years later must also reflect other activities of the company which could add or subtract from that value. eg what happens in California and Indo in the meantime or debt carried, shares issued etc.