The IPO listing of 100 milion shares at A60c per share on the Australian Stock Exchanges is expected to increase the company's market capitalisation to about $A150 million.

The offer is scheduled to close on May 16, 2007 with shares planned for listing on May 30, 2006.

Capital raised after expenses from the IPO will be used to carry out a five-well drilling program on drillable prospects, further pre-drill exploration on other leads in NGE's portfolio and for working capital.

Drilling is expected to start in the third quarter of this year.

NGE has an inventory of six drillable prospects, 10 high graded leads and a further 43 leads with significant oil and gas potential over six petroleum prospecting licences that cover 52,000 square kilometres. Another licence covering 8000sq.km is under application.

"NGE has built a significant portfolio of assets in a known oil-producing province. We are now seeking capital to undertake a drilling program targeting our best prospects and look forward to results that can take the company to the next level," managing director Jeremy Towner said.

He added that NGE's prospects are adjacent to several existing discoveries, with the Tarim re-entry targeting estimated reserves of between 41 million and 66 million barrels of oil equivalent while the largest drillable prospect, Lake Murray, has estimated reserves of about 199MMboe.

The company's licences are located within the Papuan Basin petroleum system where other explorers have discovered about 1 billion barrels of oil and condensate and 15 trillion cubic feet of gas.

"We believe that our portfolio and expertise compares favourably with companies active in PNG and the surrounding region. We are committed to implementing a value-building strategy that aims to take the company to production as a significant independent oil and gas entity," said Towner.