NEN - Neon Energy

[Anna Naum]

A good announcement from Neon today, amazing how great announcements like this one are only worth 8% increases in stock price currently, still the heads up on future drill results suggests this will not be the only time this stock is up.

http://www.asx.com.au/asxpdf/20120621/pdf/426yrxr93ys6c9.pdf

[Anna Naum]

From AFR:

As explorer Neon Energy gears up to finally announce the long-awaited farm-in partner for its prospective Vietnamese exploration venture, the junior has revealed some interesting resource estimates for its Paloma project in California that point to the potential of this often-overlooked venture.

Testing at the Paloma Deep-1 well has signalled producible oil and gas in three separate shales and sands, with a best-case contingent resource put at 26 million barrels of oil and 22 billion cubic feet of gas. Lower zones have yet to be tested and may add to the figures.

Encouragement from the initial tests has driven Neon to decide to go immediately on to drill two more wells, with Neon to get independent confirmation of resource estimates should appraisal drilling be successful. Development would then follow, taking advantage of the extensive transportation and production equipment easily accessible in onshore California.

The news has helped boster Neon’s recently flagging share price - with the stock up about 5 per cent Thursday morning - but could be set for further gains on the long-awaited annuncement on a farm-in partner in Vietnam, now expected within days. Neon is farming down to 25 per cent of Block 105 and Block 120 in Vietnam, down from the current 50 per cent holding, before exploration wells planned for late this year or 2013.

The farm-out deal will enable one well to be drilled in each permit at minimal cost to the junior, which will still retain a substantial exposure to the potentially huge resources that the permits may hold.

With ExxonMobil, Chevron, Petronas and Premier Oil among those internationals already operating off the Vietnamese coast, the chances are high of a blue-chip partner in Neon’s venture.

And this from The Australian.

Neon Energy (NEN) 32.7c

THE last time we looked at this Perth oil and gas junior the focus was on offshore Vietnam, rather than what the Beach Boys claim -- contentiously in our view -- to be home of the cutest girls in the world. The least we can say about Neon's latest result from its California program, Paloma in the San Joaquin basin, is that the detected hydrocarbons should at least pay the corporate bills for a while. After drilling the Paloma Deeps-1 well, Neon reports a "contingent resource" of 26 million barrels of light oil and 22 billion cubic feet of gas (on a recoverable, best case basis).

Neon's main caper remains its two offshore Vietnam tenements, conveniently close to a big gas find by Exxon in 2009.

Neon, which owns 50 per cent of each block, is in the process of farming down to 25 per cent, with a mystery party (not Exxon) funding one well in each concession.

The proof of this pudding lies under the earth's crust, but the stock deserves a spec buy on the back of beautiful Californian oils.



This from the SMH.

Neon lights up for a minute

Oil and gas minnow Neon Energy’s shares lit up for a minute yesterday climbing just over 8 per cent to 33 cents. But you have to remember, this stock was almost double this at the end of last year.

The company does have some big irons in the proverbial oil fire, and one of them came out with some positive news yesterday. The company said that its Paloma Deep onshore prospect in California should produce between 30 and 54 million barrels of oil equivalent.

There is more testing to go, but it comes on top of a producing asset in the North San Ardo field in California, and its “big momma” gas prospect offshore in Vietnam. The process has been held up, but investors are hanging out for news on when it will start drilling and names its off-take partner, which we believe is one of the majors.

Bell Potter’s veteran oil and gas analyst Johan Hedstrom is a believer with his 90 cent valuation and tells Under the Radar, “It’s time to get back into Neon”. For Johan’s sake, Radar hopes it’s oil and gas, and not hot air, that comes out of this company’s major prospects.

[Rabbi]

This is one of my selections in the stock picking competition, based more on the Vietnam drill and the quality of management under CEO Ken Charsinsky.

The Paloma success should underpin the SP and provide long term cashflow. I don't hold so it might be time to pick up a few.

[bermuda]

This is one of my selections in the stock picking competition, based more on the Vietnam drill and the quality of management under CEO Ken Charsinsky.

The Paloma success should underpin the SP and provide long term cashflow. I don't hold so it might be time to pick up a few.

Rabbi,
I picked up a few a while ago. The USA drills pay the bills. The offshore Vietnam permit could see this one leap. Not long to go.

[NOCASH]

I done my research. I am going to take a punt on this company - will buy in tomorrow.

I wonder who the mystery company is (farm down)?

[Anna Naum]

• Vietnamese Farmout Agreement signed with global oil & gas major Eni
• Neon to be carried on two 3D seismic programmes and two exploration wells
• Neon to retain 25% working interests in Block 120 and Block 105
• 3D seismic programme commenced on 15 June 2012

[bermuda]

• Vietnamese Farmout Agreement signed with global oil & gas major Eni
• Neon to be carried on two 3D seismic programmes and two exploration wells
• Neon to retain 25% working interests in Block 120 and Block 105
• 3D seismic programme commenced on 15 June 2012
Anna,
This is a knockout stock if Vietnam comes in. And it has a good chance. The targets fro both oil and gas are very large. ENI is a very good operator. This has a lot of promise but we may have to wait a few months until people again realise that oil is a finite resource. Hold tight.

[Anna Naum]

Thanks Bermuda, thought todays announcement was good confirmation of the potential that some see in what NEN has in Vietnam. As you say it is going to take time but with the 3d shot already underway they do not seem to be wanting to wait around, rather they want to get to drilling ASAP.

Next announcement should be further drill and pressure results from Paloma.

[Rabbi]

I picked a few up last week at 32.5 but I'm not holding my breath over the Vietnam drill. If it's anything like OEL and BHP Billiton drilling in the Philippines, the lead time up to the drill could stretch out.
Still, I'm happy to hold, as the 2P reserves at Paloma, could also be a significant catylyst for the SP.

[Anna Naum]

Good announcement about Paloma worth reading, next two months will see a number of resource upgrades and results based on this news.

[Ricky99]

Gas found should be a good mover on Monday

[bermuda]

ricky,
This is what we have waited for.

Nothing is easy.

[Anna Naum]

Yes it is, but then the news was out Friday so will be interesting to see if there is follow through buying tomorrow. Speculation that there is about 5tcf of gas which is about 88c for NEN's 25% stake. That is if the tests prove up anything.

[Anna Naum]

Mr Market seems to think its going to be a good announcement.

[edison]

Ouch! Not good news.

Vietnam Cua Lo-1 exploration well completes testing

Singapore, 9 January 2014 – KrisEnergy Ltd. (“KrisEnergy” or “the Company”), an independent
upstream oil and gas company, announces the completion of the drilling and testing of the Cua Lo-1
exploration well in Block 105-110/04 (“Block 105”).

The Cua Lo-1 well was drilled to a measured depth of 2,867 metres, or 2,837 metres total vertical
depth subsea. Based on log interpretation, several gas bearing sandstone reservoirs were identified.
A drill stem test was conducted on a reservoir evaluated with the largest potential within the
prospect. Although gas flowed during the test, the poor reservoir deliverability rate combined with
high carbon dioxide content suggests that development of the tested reservoir will be unlikely. The
well will be plugged and abandoned.

The Cua Lo-1 well confirms both the trapping mechanism and the existence of a petroleum system
in Block 105 and provides valuable data for deciding the future exploration strategy in the block.
Additional oil and gas prospectivity exists within the block, providing opportunities for further
exploration.

Block 105 covers an area of 7,192 sq km offshore northern Vietnam, overlying the central Song Hong
Basin where water depths range from 20 metres to 80 metres. The water depth at the Cua Lo-1
location is 76 metres.

KrisEnergy holds a 25% working interest in Block 105 and is partnered by Eni Vietnam B.V. as the
operator with 50% working interest and Neon Energy (Song Hong) Pty Ltd with 25%.

Contacts
Richard Lorentz
Director Business Development
T: +65 6838 5430
E: richard.lorentz@krisenergy.com
Tanya Pang
Head of Investor Relations & Corporate
Communications
T: +65 6838 5430
E: tanya.pang@krisenergy.com

[pierre]

Well - the market sure has take a major dislike to that announcement!

[Bobcat.]

Trading it now. DB were too slow to pick up my bid on open, and so I needed to come in a bit later and higher at 7.5 but still in the money. This one's a great day-trade opportunity.

[Bobcat.]

...out at 8.5.

...and putting another checky bid in at 7.8.

Don't ya' just luv playing the peaks and troughs on these panic trading days? It's like surfing with sharks on one side of the board and mermaids on the other.

[pierre]

...out at 8.5.

...and putting another checky bid in at 7.8.

Don't ya' just luv playing the peaks and troughs on these panic trading days? It's like surfing with sharks on one side of the board and mermaids on the other.

Probably not so much fun now that it's dropped further to 7.4!

[Bobcat.]

Probably not so much fun now that it's dropped further to 7.4!

I'm still up 7% for the day. Given that over one third of total stock has traded hands today, I'm picking that this is now oversold. NEN is still an ongoing concern, albeit with reduced earnings prospects. Putting another bid in just above today's low of 7c.

[boysy]

Still seems to be sliding at this stage 6.7 cents

[Bobcat.]

Yep, I've just bought my 2nd parcel. I pushed an order through at market price just as it was dropping, and so picked up some more at just under 7c. Risky catching a falling knife but anticipating a dead cat bounce.

...and here it comes. Now up to 7.2 with support building.

218M shares traded from a total of only 553M. It's looking like over 50% to be traded today. That's a recipe for an oversold stock if I've ever seen one.

[JBmurc]

Yep, I've just bought my 2nd parcel. Risky catching a falling knife but anticipating a dead cat bounce.

...here it comes.

Now it's .071 ...dangerous game the falling knife one.....I've heard fair valuation's round the 6c mark .....>>>personal see better returns elsewhere SOC for one

[Bobcat.]

Now it's .071 ...dangerous game the falling knife one.....I've heard fair valuation's round the 6c mark .....>>>personal see better returns elsewhere SOC for one

Who on earth told you a fair value of 6c, JB?

Now that over half of its stock has changed hands, the sp has now stabilised with support at around 7c.

Now my sales strategy kicks in. Last resistance today of any note was at 7.5 and then above that at 8c. I'm offering my parcel to whoever wants it at 7.9c. If that gets taken today then fine...otherwise I'll wait longer for its bounce, and yes, bounce it will.

[JBmurc]

Who on earth told you a fair value of 6c, JB?

Now that over half of its stock has changed hands, the sp has now stabilised with support at around 7c.

Now my sales strategy kicks in. Last resistance today of any note was at 7.5 and then above that at 8c. I'm offering my parcel to whoever wants it at 7.9c. If that gets taken today then fine...otherwise I'll wait longer for its bounce, and yes, bounce it will.

LOL just another traders wild guess ....fair value is what the market tells us ...so many Oil&gas companies are valued at less the cash LRL MPO two I can think of PPP round cash backing ....did think about jumping into the fire with NEN 7c but decided to bid for another 30k of SOC 14.5c on close(got 25k)

[Bobcat.]

LOL ... decided to bid for another 30k of SOC 14.5c on close(got 25k)

You and I are holding it up, JB. Likewise, I topped up with another 25,000 mid afternoon. Trusting this is its bottom. RSI at 30 looks like the sp could've dropped a little further but the POG is holding up well today and looks to now be tracking to an upward trendline: 1180-1200-1220-1224.

Trusting this will move SOC up next week. My holding is now 10% of my portfolio (exceeded only by OGC, TRY and EVN).

BC

[Bobcat.]

LOL just another traders wild guess ....fair value is what the market tells us ...

Whilst NEN's announcement was disappointing, it did include data re the discovery of a petroleum system in Block 105. The JV partners may yet push ahead with exploration in that block.

Ignoring the profit I made on my first trade, my current holding of this stock is at an average price of 7.35c.
Expecting a much lighter trading volume Monday (it really couldn't be any larger!) and a dead cat bounce. Hoping so - I sold my ALK a bit earlier than I normally would to pick up a few more just below 7c.

Learnt the following:
1. Expect an oversell on the first dump (at open) and purchase at market within first 5 mins.
2. Wait 15-20 mins for the first and (typically) largest bounce...then sell.
3. Don't be too quick to come back in.
4. Look to buy in again mid-late afternoon after the next large sell off.
5. If the price drops below earlier bottom, expect a panic sell and buy ~5 mins of that occuring.

All up, I'm still in the money on NEN today (just), and am confident, but of course not certain, that Monday will see this stock recover a little.

BC

[Corporate]

I was hoping this might have been another FGE in the making but NEN didn't drop as much as I hoped! 7/8c is still to high IMO. 5/6c is closer to the mark.

[Huang Chung]

The problem with NEN right now is that we have no idea how badly their cash position has deteriorated, given the serious time over-runs on both Vietnam wells.

The quarterly due by the end of the month should allow for more accurate valuations.

At a guess, I feel that NEN will now exit from Vietnam, as they really have been playing a big boys game there, without the financial clout to hang in when the road get a bit rocky. Only alternative would appear to be another massive farm out of their interests in exchange for being partially free carried again. But the question remains whether ENI and KrisEnergy will be interested in funding further work on these permits given the disappointing results to date, and if so, what would be the terms of the farm down (pretty servere i'd imagine, given the heightened riskS).

[JBmurc]

Yeah sounds like NEN have huge costs to pay and may even need to raise cash ...very interesting to see how it plays out but not with my money >>at this stage

[Corporate]

I truly believe there is more downside to come. Probably on Monday!

[JBmurc]

I truly believe there is more downside to come. Probably on Monday!

Yes down to 6.5c glad I didn't take a punt ....

[JBmurc]

You still holding Bob NEN the knife just keeps dropping

Is now getting me keen in the 5's for a 20-40% swing trade on shorters covering...might buy a small amount

[JBmurc]

Ended up with a small 84,000 NEN near close 5.6c

what I've found-

-Valuing the producing assets - NSA field at $9 a barrell and the proven 2P reserves at Paris Valley at $5 I get around 14cps. Those figures are based on US oil field sales data....
-Cash well thats the million dollar Question lows of 2mill to 5mill are talked about mgmt should clean this up in time
- One or both Vietnam permits can be JV. or sold ....to help cash balance ,,,
-Margin loans have be called so any investor that was borrowing 50% will need to pay out or sell out ....IMHO thats been a big SP driver today ....
-Around 1% of the Shares are shorted I'd say much like the margin loans the CFD providers will force the shorters out..
-Nil debt

Overall there is massive FEAR of needing to raise capital .....Panic selling personal think we are over the forced sales but maybe well even trade lower till cash balance is know ...fact is NEN was a jnr oiler but is now being priced as a micro cap ....on that basis is worth taking a position on assets...

From most recent analyst report-

Our Target Price is unchanged at $0.70/share and includes considerable risking for the exploration prospects. In the case of success at either Cua Lo or Ca Ngu, the stock price will be much higher than at present. If both wells fail to find commercial hydrocarbons, there is obviously downside risk. We value the Californian assets at around $0.10/share but we wouldn’t expect the share price to trade that low as the Vietnamese blocks cannot be written off after only one well each. Nevertheless, the near term outlook for NEN investors is very binary, as is usual for speculative exploration stocks.

[JBmurc]

actually I see I brought at 5.55c somehow did place a 5.9c sell and it just got filled for round a $400 profit

[Bobcat.]

You still holding Bob NEN the knife just keeps dropping

Is now getting me keen in the 5's for a 20-40% swing trade on shorters covering...might buy a small amount

Yes, JB - I set an offer at just above the high for that day and then went off to do something with the kids, which meant I wasn't watching it closely enough to manage risk. Nevermind, it looks like today's announcement is going to be well received. NEN has confirmed that capital raising is not on the cards.

http://www.asx.com.au/asxpdf/20140116/pdf/42m4lf27349y9z.pdf

Watch it lift today (perhaps back over 7c by the weekend?).

BC

[tosspot]

Yes, JB - I set an offer at just above the high for that day and then went off to do something with the kids, which meant I wasn't watching it closely enough to manage risk. Nevermind, it looks like today's announcement is going to be well received. NEN has confirmed that capital raising is not on the cards.

http://www.asx.com.au/asxpdf/20140116/pdf/42m4lf27349y9z.pdf

Watch it lift today (perhaps back over 7c by the weekend?).

BC
yea maybe for the next week or so. There were quite unclear around the costs of the project and mid term cap raising may mean week after next or within the next month. tread carefully

[JBmurc]

Yeah brought a second lot 5.6c just sold 6.6c see how it plays out have put funds into ROC hoping to see a good short term trade on Qtr results

[soulman]

Yeah brought a second lot 5.6c just sold 6.6c see how it plays out have put funds into ROC hoping to see a good short term trade on Qtr results

Thanks for the heads up on the swing trade JB. Bought for 5.5 cents that day.

Saw the announcement that one of the director dumped 2 million shares. Still, traders are in control at this stage on where the direction NEN takes next week.

[boysy]

What a sad state of affairs sp now 2.3 cents anyone still holding this one

[soulman]

What a sad state of affairs sp now 2.3 cents anyone still holding this one

Luckily not me. Sold out for losses at 4.2. Haven't tracked them since. The same with VMT. Sold for 4.3 for break-even.

[Bobcat.]

Looking to come back in. This company is not going under. It was dealt a body blow but even if they do decide to raise new capital (which they have not yet declared), I'm comfortable with its remaining operations and management. Now oversold IMO.

[Huang Chung]

Seems very high risk, with questionable upside.

[Bobcat.]

Seems very high risk, with questionable upside.

Still think so, Huang Chung? As I write this, it's up 80% today.

Risk/reward was always going to be very low at yesterday's 2.3c close.

Discl: holding (with itchy fingers).

[tosspot]

Still think so, Huang Chung? As I write this, it's up 80% today.

Risk/reward was always going to be very low at yesterday's 2.3c close.

Discl: holding (with itchy fingers).
When did you get in, Im guttered when it rose to 2.7c this morning I said I bet this will go for a huge run today, but didnt buy in. check 2 hours later and boom.

[JBmurc]

Some major inside trading going on here me think