massive buying to occur this arvo, page-24

An important issue to consider when investing in any spec is the risk-reward analysis.

They are currently producing a smallish amount of oil in the order of about 60-120 barrels per day from fields that typically produce for long periods of time (These types of wells are often slowly replenished from a larger deep reserve that may be in fairly tight rock that would not produce in it's own right but will slowly leach hydrocarbons into higher formations).

Even IF they found no more oil, the current production
gives an income of about $1-1.5 million per year after expenses are taken out, and given a likely long production life justifies as PE of 6-8 at least. This justifies the current market cap.

Even if all they are doing in WA comes to nothing you will lose little, if any, of your money.

Further success, which looks very likely from their current campaign, will even more strongly underline their market cap and probably justify a MC of around $15-$20m, or SP around 20-30c.

The heads are thus a fairly safe bet, much safer than the multitude of non-producing Iron ore, Uranium, Gold etc specs that are years from production, and there is potential 100% upside on the US projects alone.

The options are currently a long way out of the money (25c exercise) though have three years to run.
The US oil farming is unlikely to make the options a very profitable venture, for the options to be really worthwhile one of the major projects in WA has to be successful. If that were to happen however the SP could rise well above the 50c mark or likely much higher. Blind freddie can see just what a winner the options would be if this were to happen, and would come out as at least a 6-10 bagger from the current 4c. If the WA projects do not come off prior to option expiry you may lose on them even if the heads do rise into the low 20s. I hold mainly options as I think that the US projects are likely to push the value of the heads to around 20-25c at which time I expect options to be worth around 8-10c, so about a 2-2.5 bagger from here, and I've now held them for about nine months so I'll get a CGT discount shortly (otherwise I would likely cash some in and redistribute half to the heads)

What the above means is that there is little downside as the stock has solid cashflow, low costs, produces a product in limited supply that is becoming increasingly scarce, and has a very good PE ratio. If a major project is successful you will make a small fortune!

Note that through all this market turmoil WGP are down only about 1c from the SP just prior to "subprime". Most non-producing specs are down to around half (or less) of their prior value, so I would say it is pretty solid myself.

These seem like good reasons to invest in WGP to me, and to call WGP "a dog" is an indication of someone who has not done their homework, or someone who expects to make 100% on every trade every day (those people very rarely actually make any money at all!).

I just wish the incessant posters who are incessantly ramping WGP without any supporting information would post less frequently so that reasoned debate might occur in this forum, rather than hollow ramping which just puts investors off (who would "invest" in EGO with such a bunch of traders/rampers on board - creates too much fear that this is just a pump and dump).