Hi Strat,Thanks for your comments. It helps to sharpen the...

Hi Strat,

Thanks for your comments. It helps to sharpen the thought process.

Regarding the Yakal resources I've got a POS of 60% listed which takes the resource down to 1.4 MMbbl.

The model is conservative by nature and I use industry numbers in place of cash flow figures that are unavailable or just plain too hard to do at this stage. What I'm looking to understand are the key components that drive this company, what the relative value is and make an assessment as to when things are going to happen. Absolute values are a mugs game with so many uncertainties.

What I've concluded so far is:

- Galoc is fully valued.

- SC 54 shallow 10 MMbbl OOIP unrisked is ~$48m or 5 cents per share when its producing. Lots of cash to drill Top 20 wells.

- Gindara is the company maker. I'll increase its risked value when a rig contract is announced.

- The value of the farm-out is somewhere between 2 and 4 deep water wells ($35m each). I put this equivalent to 50% of the current exploration value (Mkt Cap - Galoc - Cash). Any more than that and you would think the farmee would consider purchasing the company.

- The value add of the farm-out will begin once a forward drilling schedule is announced.

With that part of the equation roughed out the rest of the share price movers are pure supposition. How much do you discount for the current market environment, Galoc delays, country risk etc? What, if anything, can the company or shareholder do about it?

There is no question in my mind that NDO is currently undervalued and has potential bordering on the incredible. The assets, people, strategy, and sources of funding are in place. All that is missing are time and equipment.

I'll make some revisions and additions to the model as time goes on. I hope you all find it of some interest.

Regards,

opt