Niko Resources* (NKO : TSX : $26.95), Net Change: 0.15, % Change: 0.56%, Volume: 370,289

It was setting up so perfectly, and then you came along. Niko Resources announced that it had to prematurely abandon its first

offshore Indonesia exploration well due to mechanical failure. The company will now move the rig to its next location

(Ratnadewi-1). In addition, the company’s reserve report on its D6 block offshore India has now been delayed until the

company reports on June 28. Canaccord Genuity International Oil & Gas Analyst Christopher Brown had suggested that

investors accumulate NKO after the reserve report, which he estimated could be a negative event for the company, and before

drill results from the company’s first Indonesian offshore well. Given recent events Brown believes the market has overreacted

to the mechanical issues as geologically the block continues to look very prospective. Brown’s base reserve value for NKO is

$25.60, which he believes is conservative given his 2P NAV estimate, as it includes a 25% write-down on the company’s D6

block.