a case of premature speculation

I believe the recent volume activity and trades in NWE is a case of premature speculation by over-anxious hyperactive DayTrader's who flit from one stock to the next at the last minute trying to get an-board the next big thing ... and then bitch and complain if they get their timing wrong or there isn't an instant increase in share price.

There is also last minute accumulation by longer-term holders. I doubt whether there are any larger accumulations going on yet as they would have had to declare their hand once they tipped over the 5% reportable limit. There may be holders approaching this limit, ready to make a move on any solid announcement ...who knows.

My guess/hope for an announcement would be after trade on Thursday, or soon after the Easter break. An announcement any sooner would be wasted in my opinion as I am guessing the market will retreat a little prior to the break as the highly leveraged traders will want to clear their positions, so they are not paying interest over the long break ... and also they will be waiting for market direction from the US. The next few days could be good buying for accumulators!

As TheDhon, YoungTrader, GODS BROKER and sydney6791 and I (and others) have pointed out, NWE have many potential projects on the go.

I think too many people are getting hung-up over the timing of impending company announcements ... as Mr Miagi would say ... be patient grasshopper.

For me, the exciting prospects for NWE could come out of left-field. Don't be left blind-sided by announcements by other associated companies (either JV's or near-ology). i.e. the ones that could add significant value to NWE, without NWE having to spend a cent.

In my NWE Valuation posting, I commented on these briefly.

Shale Gas

The company has extensive acreage with a Norwest permit footprint of more than 1,000,000 acres (about 4050sq.km) (with 376,211 acres (1522.5sq.km) net to Norwest) in tenements EP386, EP426, EP413, L14 and TP15.

"The Perth Basin shale gas potential is of significance to Norwest," said chief executive Peter Munachen. "If you follow the US shale gas plays such as the Marcellus and Barnett, it's all about acreage. We have the acreage and we know that the shale is present throughout the Basin. It's now about dealing with the technical issues such as determining the recoverability of gas and whether it will be a viable commercial proposition." The Perth Basin has existing infrastructure, including pipelines.

AWE is kindly going to test this proposition for us in the neighbouring L4 tenement at Woodada. Any successful drilling result could see a feeding frenzy for potential shale gas acreage, the same as we have seen for the CSG deposits in Queensland.

Royalty

NWE has been positioning itself with a royalty stream both in the short and longer-term that could help defray the management/operating costs for many years to come i.e. they won't have to dip into shareholder's pockets as often diluting shareholdings.

L14 Jingemia 6.278% share
$750,000 to $1,000,000 pa royalty for five plus years.

AC/P22 Puffin 1.25%
Royalty on estimated reserves of 20.93 mboe Based on the P50 reserves of 20.93MMbbl for Puffin AC/L6, and other information contained in the AED data; and on Norwest's industry knowledge, Norwest has conservatively calculated that its 1.25% ORRI has a NPV at 10% of approximately A$15m. This is based on oil at US$80/bbl and an exchange rate of A$1= US$0.90.

AED/Sinopec JV targeting 600 mboe in AC/P22 in the current seismic campaign. If the target resource is achieved and based on approx. 35% recovery, NWEs share of the NPV of the increased reserves could potentially be worth 10 times the A$15m quoted for the current reserves. Very large upside potential for no cost to NWE. Currently worth approx 3 cents per share, could potentially be worth 30 cents plus per share.

JV Announcement

A JV announcement will help de-risk the project and could provide NWE free-carried into the first few wells. The income from which can be used to develop their other projects.

Take-Over

Don't discount the possibility of a take-over, if the shale gas story starts to heat-up or the oil reserves in either TP15 or the Wessex Basin are confirmed.

So if you want to play Russian-Roulette, with the timing of an NWE company announcement, or an announcement by an associated company, or from a near-ology company ... good luck.

I have been quietly accumulating and holding and not trading over the last 6 months because I believe in the potential this small company has and I didn't want to be caught out by an unexpected announcement and miss a multi-bagger.

What strategy you adopt is up to you!

Good luck to all shareholders,

GrayNomad :-)