Strategy:On the basis of the valuation above, I believe the...

Strategy:

On the basis of the valuation above, I believe the following strategy needs to be considered by the board of EWC.

Upon achieving operational certainty at Eromanga with the ability to provide definitive proof of the achieved gas price and a projected P&L, EWC must look at floating the Australian gas interest into a separately listed company.

That way, listing Eromanga at a valuation of say A$200 million (with minority Oz gas interests) and retaining say 50%, would deliver to the company an injection of A$100 million for deployment into realizing the completion of the Filipino assets without further recourse to shareholders.

Following that separation, and with the operational start of Gilmore down the track, EWC will be able to vend Gilmore into the listed entity at $200 million with EWC holding a 75% interest ($300 million).

The Australian gas assets can become a vehicle for the development of the LNG business and other gas opportunities without recourse to EWC shareholders. The market value of the EWC interest would be treated as a look-through valuation and immediately be reflected in the share price. This way the company can avoid an expensive a costly dilution of the existing shareholders in seeking to fund the Philippine assets.