transforming nse

NSE is now trading 2c below its cash backing.

It's market cap only ~32m !

Because of that, the biggest danger for the company is the takeover at this point just before EGM. This is the rule in business; when something goes below its cost, someone will definitely buy it.

Don't forget, there many majors who were looking to grab some land in Canning. Apache has just made a farmin with Buru. PetroChina, Conoco and Hess are already there.

They will be looking to buy out NSE for only $50m-$60m when at least $35m cash in the bank. No one is so stupid. If one of them makes a move the other will move too.

Therefore, looking less than 10c is being very pessimistic IMO.

When it comes to what NSE's deals with OEH and MHR;
I have made a lot of research in next 6 days. I talked to Phil Thick and Sam Willis. I talked to some other people who have good knowledge of both Eagle Ford and Cooper for having a qucik idea of the whole picture.

NSE is definitely giving too much to OEH, but not to MHR I think.

Eagle Ford is a prime location in the world. To get an asset there is very hard. MHR is exiting form Eagle Ford, that's why they are selling the last piece. MHR's target is growing very fast. Eagle Ford is not suitable for them to keep their grow ratio high. I am still working on Eagle Ford asset and I can see the price what we are paying is not much, even cheap.

Because our tenements right at the bottom of oil window in the SOUTH of ATASCOSA COUNTRY of Southern Texas. In the south of Atascosa country, Aurora has got assets and producing thousands barrel every day. EOG's well right next to NSE's permit produces 2189 boepd as you can see on EOG's map (overlapped to NSE') below. I am now looking to their data and geology there. (not much to say about the geology though, it is very good for oil extraction anyway)

I asked Phil, "why you don't show this potential on your maps" I said. He said "According to new ASX rules, companies are not allowed to show the data from the nearby tenements" So we need to make our own research ourselves. I am still working on Eagle Ford permits. I will wait for the new data which will be allowed before EGM. I think cmmonassuie will be helpful for us to look at them altogether.

I have found a sale agreement made on Dec.9 Abraxas Petroleum; Source: Click here Abraxas was selling its remaining (same as MHR) acreage. It is said "1,200 net acres in the WyCross project (McMullen County) for $73mm. The properties were producing 655 boe/d in September; using $60k/flowing boe, this values the sale at $28.1k/acre, in-line with SN's recent acquisition in Wycross (see note) for $27.8k/acre.". There is 3.7 million barrels of proved reserves on the acreage though. Therefore, NSE deal for $5300 per acre for undeveloped but with 400 boepd production (300boepd from one well only) for this acreage looks very good to me too.

The Cooper asset PEL570 is a prime location. There are two main troughs in Cooper Basin for tight gas potential. One of them is main one and bigger; it is Nappamerri Trough. This one is already taken by Beach Energy (BPT) and Drillsearch (DLS). There are JV between Chevron-BPT and BG Group - DLS.

The second but smaller trough is Patchawarra Trough. PEL570 of Ambassador covers the half this potential. The other part is covered by PEL514, owned by Planet Gas - PGS. They have a farmout agreement made with Senex in 2011 (50%) and extended in May 2013 (to 80%).

The big advantage of Patchawarra Trough against Nappamerri Trough, it has very low CO2 content. Nappamerri Trough has a very high CO2 content.

Therefore, the potential in Cooper asset is huge. I now know that majors are also after these assets (It could be especially Conoco, Chevron, BG Group as they still need gas for their Gladstone-QLD LNG plants).

NSE is now getting half of this thigh gas potential. There are other potentials for conventional oil and gas there as the permit extends to the edges of the trough. There are a lot of conventional O&G activity at the region there. I need to make more research.

I will continue...