"several"

I posted this message elsewhere on Thursday night...

On Thursday WGP came out and clarified a few things:
-$562,000 was raised since 31/12/2010 as part of its raising announced in November at 2 cents per share.
-Cash expenditure was unusually high due to repaying costs (why they didn't explicitly mention this in the quarterly, I don't know).
-This quarters costs look to be around $232,000, therefore normal cash burn rates look reasonable and not greedy.
-The company is pursuing 'several' joint ventures with Australian and International companies in the area of unconventional gas exploration.

NOTE the operative word in that last point. 'Several.' This is the first time they have said they have more going on than with just one company, namely AWE. I have talked to a few 'oilers' and there is talk of a decent sized major jumping onboard. To make this even better, AWE are aiming at farming out their high equity stakes, which is only going to attract bigger and better quality farminee's.

So we now know that WGP should be funded for $246,000 + $562,000 = $808,000 or at least the next 2 or 3 quarters of activity. By then, it's not unreasonable to see the options in the money (especially if adajacent drilling in Arrowsmith-2 goes well (pun intended) - remember Arrowsmith-1 flowed at 4mmcsf per day on a vertical well...still horizontal to go.)

To reiterate where WGP lie in respect to AWE and the mapped structures, see below:



Their 100% owned block DR11 looks to have a lot of grunt - especially with 55,000 acres. Some companies in the states have 15,000 acres net and are billion dollar companies. I'm not saying DR11 has exactly the same characteristics as we don't know yet, but even the gas only scenario is a good one given the high gas prices of W.A.

The announcement on the cash position gives me a little more confidence in WGP for the time being, and considering there is 190m options at 5 cents expiring this year, I would think the management will be pushing hard to get these over the line ($9m for the coffers would go a long way...).

The chart has turned upwards too, with liquidity drying right up and I had to pay 2.6, 2.7 cents to get any on Friday after bidding pretty early (kept on getting trumped!) There was a trendline break of the 6 week downtrend and this was confirmed with volume too.



WGP still going cheap. $123 an acre.

So in summary, WGP have "several":
-joint venture partners on the sniff
-quarters of cash at least
-indications to know how prospective the blocks are from drilling of NWE/AWE first.
-indicators ticked off on the charts.
-bags to be made?