Ann: West Erregulla Update, page-89

@TJ1988 ..."do we think this company can ever get to $1.30 a share?"

How long is a piece of string would be the easy answer to give. The real answer is going to be 'depends'.

It would depend upon a number of factors going the companies way, like a great hit in South Erregulla of both Kingia and perhaps the shallower Wagina as the basin goes further South and East.
It would also depend upon the demand and price for gas going forward along with favourable equity markets etc.

Other criteria like how many cap raises need to happen to develop these assets and also at what prices any equity raises would be.

At current number of shares on issue the Mcap of the company would be around $2.2B if $1.30/sh. One would expect a company to be earning some good money of around $150-$200M per annum on a P/E basis, so have revenue of $500M-$800M or thereabouts. How much gas would we need to sell per annum to get there?? That is roughly 160 Billion cu ft of gas sales at $5/Gj.

South Erregulla by itself if successful would be around 1.6T cuft, so 10 years of sales at the 160B cuft rate.

So yes we could get to $1.30 if a lot of things went correctly and we allow plenty of time, as in 5-10 years.

IMHO our partners don't come into the picture much at all. With just WE I don't think the share price would go anywhere near $1, there is just not enough gas there, especially after allowing it to be divided by the 2 companies. For me the big prize is now EPA82 and perhaps EPA 99 further South and East if Wagina proves up nicely in those areas. We have the land capable of producing a few Trillion cuft of gas, but will need a bit of luck along the way.

I suspect management will be concentrating a lot more on the Southern areas where we own 100% if/when South Erregulla proves successful, while doing the minimum (including sales) from WE where the gas is shared.
IMHO it was foolish for WGO to reject the T/O offer, because when SE is proved up there is not the same incentive to worry much about WE. It can wait until later for further sales, gas plant upgrades etc while Strike concentrates on 100% owned assets.

Imagine what the share price differential will be with a successful SE1 find next year.