As bullish as Westralian Gas & Power (WGP) looks after today?s very impressive break out, trading this from yesterday was not an easy thing to do. From a fundamnetal perspective this was a pretty clear cut buying opportunity yesterday as it was based on this very impressive announcement from AWE Ltd about 20 Tcf of shale gas being identified, some of which was on acreage that Westralian Gas & Power had farmed out AWE.
Our local market got hit by a bout of jitters today with many stocks being sold off and this stock got hit as well.
It was only after the market had closed that saw the stock price jump to a closing high of 2.4c as buyers rushed in during the last 2 minutes of the closing auction.
From a fundamental perspective the prospects for Westralian Gas & Power are strong and this was affirmed when the company made the following announcement late this afternoon:
WGP ENCOURAGED BY PERTH BASIN SHALE GAS FINDS
Unconventional Gas explorer Westralian Gas and Power Ltd (ASX:WGP) is encouraged by the finds of its joint venture partner AWE Limited (ASX:AWE) in its AWE`s Perth Basin Shale Gas Update announced on 9 November, 2010.
AWE?s Woodada Deep ? 1 is located adjacent to WGP?s EP455. EP455 is also adjacent to AWE?s EP413.
AWE Limited farmed-in for a 90 per cent equity share in WGP?s Exploration Permit EP 455 in the North Perth Basin earlier this year.
AWE paid $200,00 to WGP for the equity share and carry of EP455 through a gross permit expenditure of up to $7,500,000 after which AWE will pay 90 per cent and WGP 10 per cent of approved work programs and budget expenditure. AWE plans to
secure a suitable drilling rig to begin drilling at EP455 early in 2011.
WGP Executive Chairman Peter Briggs said that AWE?s estimates of 13 to 20 trillion cubic feet (Tcf) of Gas in Place in the middle interval of one of the shale intervals (the Carynginia Shales) confirmed the prospectivity of both EP455 and WGP?s wholly owned DR11 acreage south east of the AWE target areas.
?This is exciting news for everyone involved in unconventional gas exploration in Western Australia,? he said. The exploration for shale gas in Australia is in its early stages but the technology could enable our State to be a major shale gas producer in the years ahead.
?Our Board decided earlier this year that a strategic partnership with AWE was the best way to explore for shale gas in the Perth Basin
?WGP is very well placed with its joint venture arrangements with AWE and with its own ground to be at the forefront of this exciting new resource industry.?
Mr Briggs said that while shale gas had traditionally been difficult to extract, modern hydraulic fracturing techniques developed in the United States have enabled new sources of natural gas to be exploited.
As good as the news is, a sell off in the market could still see a collapse here. Major resistance was broke today however and the chart is now very bullish thanks to the late rush of buyers in the dying minutes of the closing auction.
I?ll stick my neck out and predict much higher prices in the near future.
Nice little finishing statement from the Guru LOL :)$$$
happy days
GB:)$$$$
WGP Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
