Ann: Presentation - Excellence in Oil and Gas Con, page-16

re: Ann: Presentation - Excellence in Oil and... Hey Jake,

Remember your post earlier?

"or will the bid remain at 65c, given that the origonal offer was made prior to the release of a significantly increased reserves position?

when the proposal of 65c p/s was announced, WCL had 369pj of 3P.
On 16 Feb WCL announced a new increased reserves figure of 725pj of 3P to WCL.

so at 65c p/s and with 254m shares on issue the proposal was worth $165m.
At $165m values the old reserves at 44.7c/gj of 3P. (is that right?)

SO, even if LNG does not increase the rate per gj it pays, then the bid should total $324m (ie 44.7c/gj x 725pj of 3P).

After the R/I WCL will have 356m shares.

So a bid totalling $324m is worth 91c !!!!


And thats not so silly imo.
-PES was t/o at about 40c/gj 3P. that was in "heady" days and was a contested bid-but PES was not in production.
-BOW was about 18c/gj 3P but flow rates evidently are not so flash, its in high water area, not contested bid, and not in production.
- ESG was about 50c /gj 3P. Santos already held 20% s/h and bid was not contested.

- difference with WCL is that WCL is in production, it has proven it can get gas to flow, it is closest to Gladdy, it can supply LNG in the time frame needed by LNG, if combined with Mitsui's share the reserves are significant, if combined with MPO assets the reserves are doubled again, and there are significant infrastrucure already in place. Included in the assets of WCL are about $70m worth of pipelines, compressors etc with the ability to increase prod'n to 60tj/day.
- do not underestimate the importance of the difference between a 3P reserve where the field has proven flow rate and is in production, compared to that of a 3P reserve figure that is in a field that is not in production.

SO if LNG maintains the rate of 44.7c/gj as origonally offered, then a price of 91c is not unreasonable.
If LNG maintain the offer price of 65c x 356m shares = $231m total cost.

But if LNG were to retain their bid at $165m + $23m (R/I proceeds), thats only an offer of about 53c/share. And they can get stuffed imo!

On the new reserves figure of 725pj of 3P, and offer of even 30c/gj of 3P gives a value of $217.5m or 61c p/s.

So imo, we are still looking good. "

Nothing has changed from the above.

And there is NO chance, LNG will walk away (IMO). If LNG can't get hold of this gas asset, there is nothing for them to do but throw their hands in the air and say "Sorry folks, show is over - we've tried multiple times to get our hands on some gas and failed each time - have a nice life" - lol

53 odd cents does not take into account the reserves upgrade where 3p Increased 48%...

One could argue 2P value not increased by THAT much but one could also argue, Westside have a proven track record of being able to convert 3p to 2p with no troubles at all.

So what do we have ?? 53 cents? possible LNG will throw that offer down but just as likely our board will argue that deal is out of the question. A deal will then be struck to take into account the reserves upgrade. What that deal is remains to be seen.

What we can say is 53 cents is the bottom price and this is based on MB coming out boasting he can put together a deal taking into account the rights issue.

The rest is up to the top 20 who own 70% of us and any competition who decide they dont want the Chinese playing in Gladstone with the other boys.