good read SF.HY - your right - the SP is frustrating as hell.I...

good read SF.
HY - your right - the SP is frustrating as hell.
I am sorry, but i am jotting down things on HC as I read your posts, instead of sitting down and posting in one hit.

HY - all the way thru the AGM AK made specific reference to the fact that s/h were not happy with the communication, with the lack of flow rate figures, drilling activity, and particularly the SP. "Free float" of shares low as Top 20 hold 70%. ( I think Top 20 will be more than 70% as concentration of ownership has increased eg Tui and me!).
(as I mentioned in my earlier post, WCL is a share for investment - not trading).
He said he would address these issues.
It is blatantly apparent that he ACTUALLY LISTENS to s/h - that is probably a plus for smaller coys, and for the fact that he has his shirt riding on the coy's fortunes.

The questions was asked why sp was so low.
He pointed to the fact that very little liquidity, low t/over. S/h pointed out that SP was partly a function of perception. BOW markets itself, plenty of ASX releases and presentations, promotes its tenements etc. WCL needs to do same. AK said he planned on doing preso to instos with results of laterals from Tilbrook 8, but then one lateral became blocked.

( I asked AK if other coys report their coal discoveries differently to WCL. He said that WCL only report NET coal seam thicknesses and have a cutoff of ??millidarcies? It seems that other coys report their coal seam thicknesses as gross intervals and have a less confining cutoff(what does Bow do?)

The AGM was good, because it was biggest attendance in the 3 yrs, big (Aust) s/h represented, and heaps of WCL mgt. They had Drilling Mgr sitting beside me, other drilling guys, Expl Mgr, etc etc. So all available to chat with.

Of the s/h, question was asked re Proxies appeared to represent no votes from biggest s/h (Bumi and SAAD). AK said Bumi supported all resolutions but for some unknown reason only sent in proxies for only one of three parcels of their shares. SAAD he said was "being very quiet". It still appears that these two are still solid supporters of WCL.

Whilst Mitchell was naturally there, also present and keen was "Ron"? (the principal) of RLMS who holds 1.9m shares on Top 20. He raised issue of Corp Gov, and asked when AK was going to seperate role of Chairman and CEO. AK said he was having fun, but knew he would need to do that - think he said Board would look at it over next few months.

Indonesia - he said Bumi is awaiting confirmation that they have been awarded permits. AK said Bumi confirmed that Bumi would document that WCL had 50% interest in permits. AK said WCL had a legally binding agreement to that effect - English Law - but that we are operating in Indonesia. AK confirmed that WCL now focussing all resources on Aust dev't, and that no money is being spent on Indonesian assets (hooray !!)

*** AK was talking about obj of WCL - he kept referring to commercialisation of reserves. he said WCL was looking to cashflow/revenue and EBITDA. He said WCL would not just charge ahead and simply prove-up heaps of 3P - he wanted revenue. Q was does that mean WCL was looking at becoming a smaller Arrow? I think he said "interesting comparison".
He said no point in proving-up 3P without proving 2P.

One s/h was questioning conv of 3P to 2P. How much of 3P would be conv to 2P by Dec 09??? Think they hoped for 30% - 35% (but unclear). I guess that depends on certifiers. Naturally I heard no commitments on that.

He said theyn are already drilling new laterals in Tilbrook.

FYI - seems "Chevron" laterals are "V" shaped laterals going to a vertical well. "Radial" drilling is one vertical well with lateral well coming off that vertical and extending for 200m-300m in different direction.

AK also said they are well progressed on application for Prod licences. For that to happen they need the 2P (so it WILL happen).
AK said (i think) they were well into investigation of power generation equipment - looking at 3 x 3mwg generators for cash flow. Not sure where they were going.
Paranui and Anglo fields closest to Gladstone.

He said WCL now had 4 active and highly pros permits - GB, Para, Tilbrook and Mt St Martins area.

GB - he kept referring to GB as such a big resource - which is why looking at farm-ins. he pointed out our blocks surrounded by big boys - and that Origin was underbidder (maybe Origin might be logical farm-inee??? -my words).
GB is closest permits to Mt Isa, and Hughendon (don't know whats at Hughendon).
GB may prove biggest CSG province in Qld - said people say producers may not be able to control water flows, but they believe there is a cap on water - and that same people said that about Bowen and Surat Basins.

He said current price of domstic gas $3gj, but in couple of years will be at least $5 gj - much more attractive for devt. No more coal p/stations. Charts show latent demand for domestic gas (but I recall reading that Clive Palmer c/mine in GB will be coal fired with carbon sequestration??).
On slide 18 he would not expand on what "-Small scale downsteam value adding opportunity" would be. I am guessing something to do with LPG as they have referred to that on previous occasions.

AK said WCL had enough cash on hand to complete drilling program and prove up the targetted reserves.
He said current market valuation metrics for gas reserves was 40c/gj for 3P and $1.00/gj 2P.

(so if WCL prove 111pj @ 2P and 1710pj @3P (or 1710 less 111= 1599pj net 3P) thats $111m for 2P plus $640m for 3P. Totals $751m. Even if we ignore 3P completely, thats still $1 per share for 2P alone !!)by end 2010.

The things I got out of this years AGM were:
- 2P 2010 target now down to 111pj (WCL share) from 250pj (i think because of blockage), but 3P up from 1,000pj to 1,710pj. (I vaguely recall AK may have stated that 250pj was QGC and WCL combined share)-not clear to me.
- WCL clearly undervalued
- WCL aiming at becoming production coy with revenue streams and focussing on EBIT returns- rather than just an exploration coy which "flicks-on" its discoveries ( a mini-Arrow would be great),
- they are looking for more opportunities
- sounds as though will be more small sector CSG M&A
- big s/h retaining shares - so liquidity will remain an issue
- AK will resist dilution - so good for me!
- GB asset is HUGE
- WCL smart - will farm-out % of GB and get free carried and free up cash (he was aying we simply don't need 100%)
- WCL likely sniffing around Anglo (smoke theres fire)
- Schramm Rig a bleedin' masterstroke - they said drills 60m/day, most modern in Qld/Aust, will do any job, operate 24/7 soon, much cheaper operating cost, at call for WCL, can operate in wet season, can do laterals- Mitchell on Board),
- WCL has drilling program for GB in 2010
- will use Schramm drill rig to earn working interests in other permits ( save WCL cash)
- WCL focussed on improving SP - directors aligned with us
- AK seems astute and free of BS (frankly similar no-muck around attitude similar to Ron Prefontaine from BOW - both impressive)
- my feeling is we got GB assets very, very cheap!

It seems clear to me that 2010 will be a very busy, and probably very rewarding, year for WCL.
If liquidity is thin, then frankly, its tough luck for those who do not have a position now.

It's funny - i have just go to a number of AGMs - often s/h ask questions and get wishy-washy responses - yes HY like politicians. But with WCL AK, Board and Mgt- if you ask a question you get an answer - even one where AK simply says "no confirm or deny" - at least you know where you stand!

WCL - "Wait - Cleanup - Laugh (all the way to the bank)