WE 5 Production Test, page-11

So lets just reflect on what's happened.
- The joint venture had excellent news from WE-4, which should have seen the share prices of both companies appreciate.
- The OPERATOR (in capitals) reported water flows, which they thought (after reviewing the technical data) was most likely caused by a perched water lens.
- Rather than go along with the interpretation, however, as they had done in the past, WGO management decided to present their own interpretation of the issue - the now notorious GWC hypothesis.
- Because of this highly unusual situation in which two JV partners published conflicting interpretations of the drill results (can't remember this ever happening before), and the fact the market was spooked by the prospect of a GWC, the share prices of BOTH companies fell.
- This allowed Strike energy to pick up an additional 3-4% of WGO shares cheaply, establishing a potential/partial blocking stake, and lowering the probability of a future takeover by a third party. This SEVERELY disadvantages WGO shareholders, many of whom are banking on a takeover offer to monetise their holdings.
- Following WGO's dramatic move, Strike's MD made himself available to answer questions in a public forum about the GWC issue and presented a whole bunch of technical data to support STX's interpretation.
- Meanwhile, WGO provided no additional evidence/data, even though the burden of proof should have been on them, given they made the dramatic (and value destroying decision) to release their own interpretation of the WE4 results. Even in the recent quarterly, they provided no extra justification other than to say they didn't want to present only one explanation to the market for the water issues, even though that's exactly what they did in their original WE4 announcement.
- And now, WGO's interpretation has been discredited, further damaging management's credibility in the O&G sector in Australia. Hopefully this doesn't effect the ability of the JV to raise development finance.

I just hope WGO shareholders will reflect on all this when they vote for management's performances shares at the upcoming general meeting as well as future remuneration reports. And also ask themselves, do they really need two CEOs when this is the standard of decision-making they are getting?

Having said all that, I hope both companies will see strong share price appreciation following the release of the WE5 results. Unfortunately, both share prices have a lot of a ground to make up after the debacle of the WE-4 announcement. By all rights, WGO should have been trading higher than 30 cents after the excellent WE4 flow rates, and moving higher on (hopefully) even better results out of WE5.

(Sorry, I know I said I wouldn't post of the WGO forum again. But I thought it was important to reflect on what has happened, so shareholders communicate clearly to management they don't want this stupidity happening again).