NEO - Nuenco Limited

[johnsmith]

Re: NEO : Nuenco Nl

Agreed doctorj.

To improve the share price, NEO will need to announce more substantial flow rates, that goes on for days rather than hours. It will also need to announce at least P50 reserves.

My suspicion is the reserve estimates will be announced shortly, in order to finance debt raising. What the estimates will be, is anyone's guess at the moment.

As for testing, they are testing each well that has spudded (see last announcement). While the results are promising, they are still speculative at the moment. Only those who have got guts will go in now.

The more conservative investor (perhaps with more capital), may come in at a later stage when most of the uncertainty has been eliminated. However, if you intend to jump in at this stage and make a killing on the stock, history has shown that at this time, you have missed the boat. You will need to have taken up most of your position before the large investors (insto's) arrive. Otherwise, be content with the 5-10% margin you can squeeze by waiting out this long.

I am willing to take a high risk, and that's why I have been so long on this stock. I could easily sell out now, take my profits and hope to re-enter the stock when supposedly, the big fish start coming in. If you study history, you will notice the biggest rises in a stock occur on one or two days. You think I can be bothered monitoring a stock second by second, and waiting?

 

[skin]

Re: NEO : Nuenco Nl

No, life is too short for that

 

[canny]

Re: NEO : Nuenco Nl

Jack Hamar finally getting perilously close to commercial sales!!!!!
Pipeline completion expected in next couple of weeks - carrying 20million cubic feet of gas per day.
Gas at premium rates right now -US$11.50
Kain back on a roadshow now he's back from 3 months in the States, so expect more broker interest as he has a lot more to talk about than last time round. If the brokers jump on board, it could be the last time we see it trading at .039 to .04.
I expect steady rise in September and hope for 'to the moon' rise in October!
I'll keep hoping!

 

[idribble]

Re: NEO : Nuenco Nl

The market doesn't agree that NEO are getting close to sales. In fact the market seems to be sayiong the exact opposite.

 

[johnsmith]

Re: NEO : Nuenco Nl

you're right. A commercial gas contract is not on the cards yet.

Do you even know where they are on the gas pipeline construction?
Not far says my insiders.

So kick back, relax. You're gonna make at least three times your cash at these levels.

I bet the first signs of positive movement, all the little holders will sell out like the lemmings they are.

I personally know a few idiots who have actually taken a loss on NEO. Suckers!!

As for Kain... well the real question is why did he waste our money living it up in California? What did he contribute while he was there. In fact, the share price has gone backwards since he was there. Well done, great job old chap. At the rate he's going, his options will expire worthless.

 

[canny]

Re: NEO : Nuenco Nl

The market doesn't agree that NEO are getting close to sales. In fact the market seems to be sayiong the exact opposite.

The market doesn't KNOW if they're close to sales yet - that's only impatience in the market.
These things just don't happen overnight and will take time to complete properly.
The whole project has suffered delays - but overall the time factors have been considered 'normal'. It is getting close to completion and commercial sales according to the latest update. We've no reason to believe otherwise.

John - Yes, I'm sure the lemmings will all take their 2 or 3 point profits when it starts to move.

 

[steveson]

Re: NEO : Nuenco Nl

I am novice investor & new to this forum. I appreciate what I have learnt so far from members via Threads & Posts. My questions re: NEO are -in OPL announce 30/06 -said Monterey Well 1-1 capped when oil flow pressure too high for testing--decision to go straight into production--Is this strong indication that 1-1 will produce commercially?
Also in same announcement re gas production it said "Further testing of the shallow gas formations encountered in the already completed five well programme will add to our behind pipe capacitynecessary for the pipeline"
Am interested to know what " add to our behind pipe capacity necessary for the pipeline" means? Thanx for any replies.

 

[mime]

Re: NEO : Nuenco Nl

The stock is slowly moving up. Fingers crossed

 

[steveson]

Re: NEO : Nuenco Nl

yes! its good for the spirit-hope it turns out good for the bank a/c
Would be nice to get a couple of progressive test result announcements though-Hasn't been one for a couple of months!

 

[Porper]

Re: NEO : Nuenco Nl

The stock is slowly moving up. Fingers crossed

Certainly moving a bit now Mime, descent volume as well which makes a change recenltly.I've got to say it is about time though, it's been stagnant for a long time now, especially as they are so close to producing the Gas, although nobody has a clue of how much they have, not even Neo themselves.

They have been doing a Broker presentation this week in New Zealand, Aussie a couple of weeks ago, so probably has something to do with the 10% rise today.Very good timing regards gas prices too.

I am waiting patiently as I haven't been stopped out, but it is still a very risky share in my view.The company haven't given any info out for ages which makes me suspicious, but we will know before Christmas hopefully, although with Neo you never know.

 

[silverfox]

Re: NEO : Nuenco Nl

I got back in on NEO at 4c after a flutter on Ur stocks while awaiting the exciting period that will follow connection of the gas pipe..I hear from another site that it may be only a few weeks away... but you never know...

 

[canny]

Re: NEO : Nuenco Nl

Kain's doing more broker presentations in Melbourne this week, after recovering from going to the AFL final and losing!!!!
NZ Roadshow went very well - the kiwis are in big in the Top 20 and building higher stakes.
I'm really looking forward to watching market sentiment on it this week as the news starts to unfold more.

 

[Dwib]

Re: NEO : Nuenco Nl

Big volume for NEO today (15.6 million shares traded). Would anyone like to offer their view on this?

 

[doctorj]

Re: NEO : Nuenco Nl

A couple of people have messaged me about NEO in the past few days, I thought it'd be good to post a couple of quick points here.

- At the cash burn rate as per their last quarterly, they were going to run out of cash some time this quarter. They've sinced raised $1.2mill @ 3.5cps which should see them most of the way through next quarter.

- NEOO expires on 16.2.05 with an exercise price of 5cps. The 280mill odd options at this price would see NEO with $14mill to play with.

- NEO closed today 4.4cps ie out of the money. Either way, NEO needs a placement to fund its operations. Options exercised at 5cps is preferable to further placements at 3.5cps for current holders - less dilution.

- Between 2-13 and 3-13, JackHammer is producing at 2.9mmcf/d. Assuming that gas prices remain above USD$14 (unlikely), they'll nett USD$12.50 per mcf or there abouts once they get the pipeline. NEO has a 37.5% share, which works out to be just under USD$5mill per year to NEO or an EPS of only about 0.6cps (fully diluted).

- Assuming a P/E of 8 (about what these Junior Oilers like to sit on), this puts NEO on a valuation of about 4.8cps. Remember, this is assuming that gas prices remain at record highs for the foreseeable future.

- NEO and their partners don't plan to complete the pipe required to begin selling the gas until they've proved up the field. At the moment, these two producing wells are being burnt off.

- Given that they will not complete the pipeline required to make money for a while yet, option holders are facing the inevitability of time. NEOO should continue to be sold down as we near expiry.

- Even if NEO do pull something from their nether regions and get the share price above 5cps before expiry (perhaps they connect the pipe early or get another well producing at 1.5mmcfd) expect the share price to suffer from a horrible overhang. They are attempting to increase their shares on issue by more than 50%. People will find they have over extended themselves and will sell FPO's to fund their exercise.

In short, the next 3 months or so will not be pretty for NEO. Even in the best case scenario and they get the sp above 5cps and the majority of people exercise their options, I wouldn't expect the share price to get too far away from 5cps for a month or so after the expiry (enough time for people to rebalance their portfolio or sell to enter better trading stocks in a reasonably orderly fashion). NEOO is going to get pretty ugly soon. This may also drag down the FPOs. In short, if you like the look of Jack Hammer, look at OPL which offers far stronger cash backing and diversification without the option overhang. Failing that, wait till after feb 16th where its likely that even if 'good things' happen, the share price will be under valued anyway.

 

[canny]

Re: NEO : Nuenco Nl

A couple of people have messaged me about NEO in the past few days, I thought it'd be good to post a couple of quick points here.

- At the cash burn rate as per their last quarterly, they were going to run out of cash some time this quarter. They've sinced raised $1.2mill @ 3.5cps which should see them most of the way through next quarter.

- NEOO expires on 16.2.05 with an exercise price of 5cps. The 280mill odd options at this price would see NEO with $14mill to play with.

- NEO closed today 4.4cps ie out of the money. Either way, NEO needs a placement to fund its operations. Options exercised at 5cps is preferable to further placements at 3.5cps for current holders - less dilution.

- Between 2-13 and 3-13, JackHammer is producing at 2.9mmcf/d. Assuming that gas prices remain above USD$14 (unlikely), they'll nett USD$12.50 per mcf or there abouts once they get the pipeline. NEO has a 37.5% share, which works out to be just under USD$5mill per year to NEO or an EPS of only about 0.6cps (fully diluted).

- Assuming a P/E of 8 (about what these Junior Oilers like to sit on), this puts NEO on a valuation of about 4.8cps. Remember, this is assuming that gas prices remain at record highs for the foreseeable future.

- NEO and their partners don't plan to complete the pipe required to begin selling the gas until they've proved up the field. At the moment, these two producing wells are being burnt off.

- Given that they will not complete the pipeline required to make money for a while yet, option holders are facing the inevitability of time. NEOO should continue to be sold down as we near expiry.

- Even if NEO do pull something from their nether regions and get the share price above 5cps before expiry (perhaps they connect the pipe early or get another well producing at 1.5mmcfd) expect the share price to suffer from a horrible overhang. They are attempting to increase their shares on issue by more than 50%. People will find they have over extended themselves and will sell FPO's to fund their exercise.

In short, the next 3 months or so will not be pretty for NEO. Even in the best case scenario and they get the sp above 5cps and the majority of people exercise their options, I wouldn't expect the share price to get too far away from 5cps for a month or so after the expiry (enough time for people to rebalance their portfolio or sell to enter better trading stocks in a reasonably orderly fashion). NEOO is going to get pretty ugly soon. This may also drag down the FPOs. In short, if you like the look of Jack Hammer, look at OPL which offers far stronger cash backing and diversification without the option overhang. Failing that, wait till after feb 16th where its likely that even if 'good things' happen, the share price will be under valued anyway.

Doc j - In the interests of fair play and not wanting mis-information quoted, I emailed your post to Anthony Kain this morning, and received a reply early this afternoon.
This is what the company has to say for everyones' interest.


This is way off the mark. The most blatant mistake among many is that we are burning off 2-13 and 3-13 gas now after we have repeatedly told the market we have shut these wells awaiting connection to the pipeline which we will be doing asap. Please read the review of operations in the Annual Report filed the Friday before last, this pipeline is just about completed and we have paid for it and all the production equipment needed to produce gas into it which will start with 2-13 and 3-13 but will be added to as we successfully test other wells.



If this person thinks OPL gives better leverage to Jack Hamar than NEO with current prices I disagree and please ring me if you want to discuss these other points. We will update you on “substantial news” as soon as it happens.



Regards,

Anthony Kain

--------------------------------------------------------------------------------

Sent: Thursday, 13 October 2005 8:40 AM
To: Anthony Kain
Subject: Re: Nuenco news



Hi Anthony -

To save the phone calls - I just wanted to send through a posting I have read recently that concerns me somewhat.

Can you please comment on this post - and also let me know when we are likely to hear substantial news please?

Broker presentation was great - but of course I'm more interested in flow rates and any problems occuring out there.

Thanks,

 

[doctorj]

Re: NEO : Nuenco Nl

Good to hear he's passionate! Thanks for correcting me - in my defense it was a quick job late at night (check out the spelling of 'jack hammer' as opposed to 'jack hamar'. Interesting to read the points he has elected to highlight when there are, to my mind far more serious issues for holders.

The most blatant mistake among many is that we are burning off 2-13 and 3-13 gas now after we have repeatedly told the market we have shut these wells awaiting connection to the pipeline which we will be doing asap.

In the slew of annoucements I read last night prior to the post, I must have missed they had been shut in. Either way, the pipeline is not complete, they're not selling gas and simply can't sell gas until the pipeline is complete. Whether its being burnt or has been shut in, isn't quite the point.

Unfortunately, this is where my second error kicks in (hey, we're all human) - I neglected to mention that they had completed laying the pipeline and were waiting on production equipment.

If this person thinks OPL gives better leverage to Jack Hamar than NEO with current prices I disagree

I'm not sure where he took the 'better leverage' part from. There is no doubt that NEO, with 37.5% of the project and a 30mill market cap has better leverage to success than OPL with a $120mill market cap. My point was that OPL is involved in more projects, has better cash backing and doesn't have to go through a large option expiry (ie. capital raising) which in my experience tends to depress the share price for a period post-expiry.

It's great to see Mr. Kain has taken the time to respond to his shareholders and has done so passionately. Good management is priceless.

The unfortunate problem he faces is that he needs to get the options 'over the line' or current holders face further dilution with more issues at inevitably less than 5cps. Even if they were able to start selling gas today and gas prices were to remain at USD$14 and the market valued this appropriately, they are still not worth more than 5cps on a P/E basis. Successful testing of Jack Hamar 2-1 would get them over the line. For current holders and Mr Kain, I hope this is the case but the clock is ticking on towards 16/2/06 very quickly.

 

[canny]

Re: NEO : Nuenco Nl

Heads up that after all the November 1st anns re buying out NEG - the operator, and now being a 50/50 partner with Orchard, there will be a string of activity.
The market so far has not responded well, making NEO a great buy at these prices.
Fat Profits will have a positive write up as will intersuisse brokers. They're the ones I've heard of so far.
Cheers.

 

[doctorj]

Re: NEO : Nuenco Nl

I'm still not sure. Acquiring more land is great news on face value, but my main concern remains - what is going to happen between now and expiry. I still believe the options are going to get a little messy.

 

[canny]

Re: NEO : Nuenco Nl

I'm still not sure. Acquiring more land is great news on face value, but my main concern remains - what is going to happen between now and expiry. I still believe the options are going to get a little messy.

doc - I'm quietly confident that we'll have great things happening before year end - and hopefully enough to get the oppies into the money.
A lot of red tape had to be cleared up before the next stage, and NEG was holding them back.
Hoping for fast and furious now - Kain is pleased to be able to move on quickly now the agreements are all signed.

 

[mime]

Re: NEO : Nuenco Nl

Is the company earning revenue yet?