The next two months or so will be interesting starting with earnings next week. I expect the sequential quarter comparison to be mixed with higher production revenues from slightly higher prices, no new wells, but higher production from existing wells. Drilling revenues are likely to be flat to down slightly due to the continued focus of producers in the region working to restore production from existing wells from the flooding, and not concentrating on new drilling, just like NEP. That said, the Q4 over Q3 improvement should be positive. The problem is that the year over year Q comparison will be anemic due to the strong Q4 last year. Due to restatements fo earnings in 2009, the financial year over year comparison will be great. That said, I don't expect much from the earnings announcement unless the forecast/outlook is positive, which I definitely expect.
Hopefully, within two weeks, we will hear about the close on the Schengyuan acquisition. Within a few weeks after that, we will have Q1 of 2010 production followed within a few weeks by Q1/2011 financials. NEP will be busy increasing production somewhat from existing fields and exploring/developing the new fields. With luck, NEP will become a growing cash cow throughout the rest of 2011, into 2012 and beyond. GLTA
tmcal6
