WCL - Westside Corporation

[Wysiwyg]

The whole CSG sector has died in the A*@se

Except MEL but then MEL has dropped back a bit already ... there just doesn't seem to be the momentum there was before for some reason .. If any one person could accurately predict human behaviour including their buy/sell decisions that person would be a multi-trillionaire !! + some hehe

They all come off during September mate. A month before the All Ordinaries Index. MEL was an exception as you noted.

 

[johannlo]

Youngtrader you still there? LOL

Our turn at last!
"Gas reserves of up to 62 PJ (1P), 212 PJ (2P) and 514 PJ (3P) to be acquired"

- 50-80 million cost quoted depending on % of rights
- cash on hand 20 million as per Sep quarterly
- est outflow for next quarter 3.9 million = remaining cash now should be around 16 million. So what are the financing arrangements going to be?

Any experienced gas punters care to comment?

 

[growing]

Share Dilutions to raise capital with possible Share Purchase Plan offers to "retail" investors. That would be my guess, whichever way you look at it though - your shares will be diluted ... Your assets will shoot up as well. The million dollar question is will the assets be worth significantly more than the share dilution ??

We have to wait for more details hence the share price taking a dive back down

 

[Wysiwyg]

Share Dilutions to raise capital with possible Share Purchase Plan offers to "retail" investors. That would be my guess, whichever way you look at it though - your shares will be diluted ... Your assets will shoot up as well. The million dollar question is will the assets be worth significantly more than the share dilution ??

We have to wait for more details hence the share price taking a dive back down

Looks like they are positioning for the LNG export business which according to LNG (whom have begun construction on the plant) will be ready for first export in 2012 and I assume a late 2012.

With the capital raising, don't they use a VWAP to work out the share issue price? Anyway I will take a guess at 150 million shares issued if the deal goes through. Watching, waiting

 

[johannlo]

Might be less if we find a partner (BG? or too neat?) also if we only get 50%.

Sounds like they've been lining this one up for awhile though, there are a lot of parties involved.

Gossip on hotcopper is that MPO are unlikely to sell their tenements so it is highly feasible that we end up with only 50% (basicaly Anglo's share) and then partner w/ BG, that would be a good outcome, keeping costs and dilution to a minimum.

 

[ands]

Quote from the announcement:

"Westside intends to provide existing shareholders the opportunity to participate in the way of a pro-rata share issue. More details will be provided once there is certainty over ultimate interests to be acquired."

Maybe they saw how MEL screwed over their shareholders with their timing of a SPP (instead of a less dillutionary rights issue) and have decided to be good to us.

 

[johannlo]

OK very stupid question here: what is the difference between a rights issue and a SPP?

Is it that in a rights issue the shares already exist so no further dilution? If so who owns them in the first place?

 

[ands]

Rights Issue is when you are able to buy for example: 1 share for every 2 you own. eg Entitled to 100 shares if you own 200 shares.

SPP (Share Purchase Plan) is when you are allowed to purchase up to a certain value no matter how much of the stock you already own. For example: they may let you purchase up to $15,000 even if you own 1 share.

A Rights issue only causes more dillution to your holding if you don't take up your full entitlement. A rights issue also stops people buying the minimum $500 and then being allowed to buy as much through the SPP as someone who owns $50,000 worth of stock.

 

[johannlo]

Ah cool, I've participated in both but I always conflated the terms (ie I called both SPPs, but I do realise some SPPs - ie rights issues - restrict numbers based on existing stock held).

Thanks for that. I always hated the 'own 500 buy up to 15k' rights issues, dilution city indeed.

Happy NY to all holders and best of luck with this particular CSG long shot.

 

[Dukey]

It's a big plan for a small player isn't it? - comsec reports just 110Mill shares as of jun 09.

Market Cap = around 56$ Mill.
Could be a coup if they pull it off - but whats the Mitsui story?
anyone got the goods on them?
-e

 

[growing]

Anyone do the gas reserves figures based in this acquisition?? If we then also allow for dilution to raise capital for the purchase+more drilling etc ..

 

[growing]

Analysis or not, Westside is heading up strongly, I've been watching that StockAnxiety.com guy who seems to following it..

No technical data from him though

 

[Dangerous]

on a reserves certification basis WCL is the best CSG stock in QLD by a mile. The dawson deal appears to be a winner, even allowing WCL to book 1P! Comparing WCL, a $60m co, to BOW, a $400m company, it is clear to see that WCL is either grossly undervalued or BOW grossly overbought
WCL
1P 30PJ
2P 206
3P 1880

BOW
2P 114PJ
3P 2360

BOW appears to be the "darling stock" at the moment, so let us assume that it is fully priced. Its 2P reserves are valued at a ridiculous $3.50GJ and its 3P at $0.16. If you apply this metric to WCL it shows how under valued they are:


2P $3.50 Mkt Cap 722m $/s$6.51
3P $0.16 Mkt Cap 318m $/s$2.86

I understand that BOW drilling has shown some very good permeability in their tenements, but the other pro-WCL fact is that their 2P to 3P ratio is healthy. Looking back at QGC 2006 announcements one can see that their ratio of certification classes was 1:3, e.g. 1P; 1PJ, 2P; 3PJ and 3P; 9PJ. None of the small caps in 2010 are coming close to that ratio, but WCL has one of the healtheir ratios.

I should also point out that ICN and BUL have a combined market cap of $250m, that is a quarter of a billion dollars with not a single PJ certified. Add to this the fact that WCL has one of the multi-nationals as a JV partner and once the Dawson transaction completes WCL is buy, buy buy

 

[Nero64]

I should also point out that ICN and BUL have a combined market cap of $250m, that is a quarter of a billion dollars with not a single PJ certified. Add to this the fact that WCL has one of the multi-nationals as a JV partner and once the Dawson transaction completes WCL is buy, buy buy

Yeah you can throw COI in the list as well. It was on business Sunday on the weekend and not one PJ certified.

WCL was definetly a buy at 40c a few weeks back. Too bad I sold out at 43c I prefer MEL at these prices.

 

[Dangerous]

Yeah you can throw COI in the list as well. It was on business Sunday on the weekend and not one PJ certified.

WCL was definetly a buy at 40c a few weeks back. Too bad I sold out at 43c I prefer MEL at these prices.

I believe any company, such as COI, which is in drilling in the Galillee is wasting their time. I understand the coking coal deposits to be of a very high quality but limited by access to markets i.e. railways.

I have held MEL for a long time but am not 100% convinced that they will commercialize their fields on a large scale, let alone a medium size scale. They believe they can produce up to 30TJd for the Richmond Valley Power Station. I think it could be some time before they exceed such targets. That said, I expect a big buyer of the stock to appear and further to that, they are surrounded by AOE who have indicated they had some results in the Clarence-Moreton basin that will lead to further exploration. I have numerous postings on the MEL board, if you are interested in my opinion.

 

[growing]

Share Dilutions to raise capital with possible Share Purchase Plan offers to "retail" investors. That would be my guess, whichever way you look at it though - your shares will be diluted ... Your assets will shoot up as well. The million dollar question is will the assets be worth significantly more than the share dilution ??

We have to wait for more details hence the share price taking a dive back down

Haha, I'm going to quote myself from way, way back

It might not be so much about assets gained for the dilution but who is the big wig buying in?? New Hope??? This obviously gives intrinsic value to WCL although the Share issue expanding from 110 mil to 250 mil -- is a HUUUUUUUUUUUUGE dilution .. Market CAP should be around 120 - 140 million at the end of this lot ?? Does that still make WCL good value ???

Maybe future reserves need to be priced in now?? I'm buying in at 45cents though, especially given the large price increase of today - I dont think the market will drive it back down to 45 cents in a hurry ?? What does everyone think ?

 

[Dangerous]

Maybe future reserves need to be priced in now?? I'm buying in at 45cents though, especially given the large price increase of today - I dont think the market will drive it back down to 45 cents in a hurry ?? What does everyone think ?

just halve the values i quoted previously- still an absolute winner. STO, ORG, AOE and QGC have been only ones able to transition to producer. That puts WCL in pretty good company.


Once that cash is in the bank they will be a pretty attractive target and if they survive alone they will be able to toll gas through Gladstone. Risk is capability risk - will they be able transition to producer seamlessly?

I think floor will be $0.55 where NHC bought in. Two things of interest:
1. does not go ex-rights for a number of days - are they trying to drive share price up? could back fire come 19 April?
2. good to see retail investors looked after. I wonder how the institutions feel about retail price of 45c?

I have big expectations of this stock based on fundamentals - certified reserves and production!

 

[Dangerous]

Set to open at 72c. Those buying at this price have the right to buy at 45c. By buying at $0.72 you cannot lose unless the share price were to drop to 27c (72-45).

Interestingly were the share price to be 27c once the additional shares are issued, the mkt cap would be exactly that of the pre-issue capitalisation.

 

[ands]

If you bought at 72c your breakeven would be 58.5c.

72-45=27. 27/2=13.5. 58.5 - 45 = 13.5c profit. 72 - 13.5c = 58.5c.

 

[Dangerous]

If you bought at 72c your breakeven would be 58.5c.

72-45=27. 27/2=13.5. 58.5 - 45 = 13.5c profit. 72 - 13.5c = 58.5c.

Yeah of course it is - the average buy price is (72+45)/2=58.5.

Oops!

Will be very interesting to see price once share goes ex-right