Ann: Placement & Company Update, page-84

A lot of talk on this thread re WDL doing a T/O of PCL. In my opinion that is highly unlikely as WDL will obtain 56% if it elects to exercise option after completing analysis of 3D seismic and drilling a hole. If PCL elects not to contribute finances for the second hole and drop to 10%, then equity of WDL rises to 66%. Even at a 10% equity for a junior like PCL, it is still very difficult to retain this percentage simply because of costs associated with ongoing exploration/appraisal activity. PCL may even elect to go to a royalty and if so, WDL go to 76%.

For WDL a 56% to 66% (or 76%) is a lot for potentially a very large project and most majors will usually have 25-40% in JV with another major on a project of this size. I simply cant see WDL bothering with a T/O of PCL as it can simply gain further equity in the project by making cash calls to its junior JV partners and watching them sweat as to how they raise the money to maintain their positions. Also, the only thing of interest for WDL in PCL's portfolio is Saturn; so why would WDL bother taking over a company when it will simply likely secure more of Saturn by PCL not contributing at some stage?

I dont know what SP will be if 3D seismic shows strong results, nor what it will be if we hit good oil intersections after drilling. I recall FAR went to approx 12-13 cents with similar? SOI after successful first drill hole. Mr Hustler will remember exact details am sure!!