Enjoying the ride on the Buccaneer ship In the rough and tumble world of oil and gas juniors, investors are actively avoiding exploration risk but that doesn't mean there isn't room to make big returns - just look at the 30 per cent rise in Neon Energy last week, and Buccaneer Energy's shares which have more than doubled in the past three months or so. The reason for explorers not enjoying the same level of investor support can in part be traced back to the shale gas revolution, which only started in earnest less than 10 years ago, according to Canaccord Genuity's energy analyst Johan Hedstrom: Only five years ago a share price normally had a run up as drilling commenced, but now that's not the case. There have been too many disappointments and most investors have lost money punting on exploration wells. The game changer has been shale gas revolution, which has taken away much of the exploration risk, and replaced it with engineering and completion risk. Investors would rather punt on this than wildcats, where the track record has been patchy. In Neon's case, last Tuesday the oil company with operations in California and off-shore Vietnam updated the market regarding the much anticipated drilling of the latter. And about time! In the past couple of months its shares had drifted down until the announcement. The company is finally getting its act together and said that drilling at Block 105 had uncovered four reservoirs with gas. The complicating element is with the fourth and deepest, which experienced big pressure, or a "gas kick." Without going into details, Neon is stabilising the hole and will re-drill this section to gather data on the thickness and amount of oil and gas. This will take time and money. Neon has farmed the venture out to an Italian operator, ENI, which paid the first $25 million of development costs. Now that costs are blowing out, Neon is on the hook for its 25 per cent share. At this stage Neon might have to pay $5 million, up from the $2.5 million originally budgeted. Neon has $18 million in cash, and is getting money out of its Californian wells. If its Vietnam wells come off, we're talking about a deal worth hundreds of millions. Neon's shares will have exploded and then the inevitable capital raising won't be a problem. Also on Tuesday, Buccaneer Energy announced that its jack-up rig for its offshore program in the Cook Inlet, Alaska, is having stability problems with the sea bed because of big tides. It is being moved 450 feet away and the company is hoping for less tidal currents. The development is a disappointment because it is entering into the winter period which means operations will be further delayed and drilling results won't be known until spring, when work can recommence (April or May 2014). In the past few months, Under the Radar has reviewed the stock favourably on the basis that its near and long-term funding issues were taken care of. The company has cash in the bank of $40 million and has a deal with US based EOS Energy, which will fund a significant part of its exploration program for its offshore program in Alaska, to the tune of $200 million. The thing is, Buccaneer's shareholders can afford to wait, which is reflective of the rather muted reaction in its share price which has come down from 7 cents to 6.7 cents in the past week and a half. Remember, it was trading at 3 cents in late June when it fell short by 95 per cent in its attempts to raise $35 million to continue its onshore gas development. What a difference a couple of investors with big pockets can make! It raised the $35 million easily and now has funding for its offshore program to the tune of $200 million. When you've got the money, investors are betting that the technical problems will sort themselves out. Click here to access the fortnightly newsletter Under the Radar Report: Small Caps, edited by Richard Hemming. Visit here for more Under the Radar articles.