WGP - Westralian Gas and Power

[krisbarry]

Re: WGP - Westralian Gas & Power

Drilling Success - Riddle Well 6 Kentucky USA

Riddle #7 producing in excess of 20 barrels per day with no pump yet fitted

This equates to a minimum gross revenue of US$475,000 per year from this well alone.

Further good news that Riddle # 5 is being readied for production.

It also appears that Riddle # 6 has been successful.

Could we be looking at production of at least 100bpd from these 3 wells alone?

 

[ta2693]

Re: WGP - Westralian Gas & Power

The performance of this share today is very weak. It looks like everyone in this share is insider trader and know the news beforehand.

 

[Profitseeker]

Re: WGP - Westralian Gas & Power

This news was expected though. Once flow results are announced is when the real fun should start. If the drilling at the next premise is positive then it should really fly.

 

[ta2693]

Re: WGP - Westralian Gas & Power

This news was expected though. Once flow results are announced is when the real fun should start. If the drilling at the next premise is positive then it should really fly.

What if they got a dry well next time, how negative effect would be on this shares? Will it be pushed back to 10c?

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Very unlikely the share price would slip to 10 cents, given the current flow rates of past wells, and the oil already collected. Once pumps are connected flow rates will most likely increase, thus increasing the chances for more oil to be collected and hence the share price will rise accordingly.

Trading ranges of 22 to 25 cents has been discussed on Topstocks.com.au

...and a few members like myself are predicting ranges in the 40 cents very soon.

Once all wells are drilled and pumps added to those that are needed who knows how much oil will be collected and what the share price will be.

 

[ta2693]

Re: WGP - Westralian Gas & Power

Very unlikely the share price would slip to 10 cents, given the current flow rates of past wells, and the oil already collected. Once pumps are connected flow rates will most likely increase, thus increasing the chances for more oil to be collected and hence the share price will rise accordingly.

Trading ranges of 22 to 25 cents has been discussed on Topstocks.com.au

...and a few members like myself are predicting ranges in the 40 cents very soon.

Once all wells are drilled and pumps added to those that are needed who knows how much oil will be collected and what the share price will be.

Bad luck, they got a dry well. But they still got two good well and the potential is not identified. Stop clock do you still believe the price will come to 40c after the annoucement?

 

[krisbarry]

Re: WGP - Westralian Gas & Power

What if they got a dry well next time, how negative effect would be on this shares? Will it be pushed back to 10c?

Bad luck you didn't get your target entry price of 10 cents after the dry well, better luck next time

 

[Profitseeker]

Re: WGP - Westralian Gas & Power

I think we could get drill results tomorrow. I'd also like to think we will get flow results at the same time.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

On fire this morning, looks like oil is not the only thing leaking from this company, but information about flow rates too. Large trading activity means someone has a big mouth

 

[professor_frink]

Re: WGP - Westralian Gas & Power

Very unlikely the share price would slip to 10 cents, given the current flow rates of past wells, and the oil already collected. Once pumps are connected flow rates will most likely increase, thus increasing the chances for more oil to be collected and hence the share price will rise accordingly.

Trading ranges of 22 to 25 cents has been discussed on Topstocks.com.au

...and a few members like myself are predicting ranges in the 40 cents very soon.

Once all wells are drilled and pumps added to those that are needed who knows how much oil will be collected and what the share price will be.

Hi Stop the clock,

Why should this company get to 40c?

Can you provide some analysis as to why you think that will happen?

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Each 1 bpd repays itself within 9 months according to WGP' announcement.

If flow rates come in as expected between 150 to 400Bpd with all wells combined, then the share price will at least double from its current price.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Here is a little more to add:

Current Market cap of 9 million.

If they prove up say 100-150 barrels of oil per day form riddle, which is quite possible - and they may even exceed that significantly if success continues - they will have a profit from that operation of around 1.5 million per year (at 100 barrels per day) which would justify twice the current price so I think the downside is limited.

This cashflow will provide a means of undertaking other exploration without too much further dilution, and if they were to hit gas or oil big time in WA the market cap could easily reach $200 million plus.

 

[doctorj]

Re: WGP - Westralian Gas & Power

Probably netting about A$45 per barrel after expenses, royalties and production taxes (these wells are generally very cheap to produce).

400bopd gives an annual operating cash flow on the existing of approx $6.5mill. 150bopd gives about $2.5mill.

Against a market cap of $9mill, even ignoring capex and admin costs, they're probably fully priced at the low end of the 150-400 bopd range. Should production reach the higher end of the range, they may be undervalued at current prices however at this stage, they obviously need to be discounted for risk.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

they obviously need to be discounted for risk.

Strange quote considering the opposite could be said..."they obviously need to be more expensive for reward."

 

[doctorj]

Re: WGP - Westralian Gas & Power

My point is two fold.

You wouldn't expect the mere prospect of 400bopd to result in a valuation of 400bopd. If production was to be in the range of 150-400, you could argue a valuation based on the lower end of the range and hence a discount on the potential.

Also, these wells can seem to flow forever and a day, but production does tend to taper off, even on pump. Hence its unfair to assume they will flow like this indefinitely.

Given flow rates are probably more likely to come in at the lower end of that range, you could argue that on a risked basis, they are fully priced. I certainly wouldn't call it a bargain.

 

[Profitseeker]

Re: WGP - Westralian Gas & Power

Doctorj,

I can see your point. However I do think there is an opportunity to trade them. They hit a high of 27c just on the news they had found oil. I think if the flow rates are around the 110bl mark then we should see a similar opportunity considering they are now at 18c. 2 days ago they were around 15c.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Overdue for an announcement considering 11th of May stated 1 week for expected flow results. So heres hoping Monday bringes expected good news. I still reckon WGP is a buy at current levels considering there is far more upside, than downside.

Low cost drilling, with plenty of potential, makes investing in WGP less of a risk, than other oilers who have high cost drilling exercises.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

More gushing oil just discovered; 8.5 barrels an hour. Nice find and well done to the drilling boys

 

[krisbarry]

Re: WGP - Westralian Gas & Power

200 bpd is over $4ml per year just in this new discovery- plus it only takes 2 tanker loads of oil to cover their drilling costs.

Riddle 11 has huge potential and they will sort out 5 & 7 in no time.

I still think WGP is way undervalued infact this probably an understatement.....

Todays announcement reads:

Riddle # 11

Westralian Gas and Power Limited is pleased to announce that it's Riddle #11 well spudded yesterday Kentucky time, has intersected the first of the predicted oil zone at 545 ft (165m).

The zone is flowing oil to the surface at an average of 8.5 barrels per hour. This flow rate was established over a five-hour test period.

The well is flowing unassisted with no water cut into a 210-barrel tank on site. The well will now be allowed to flow under reservoir pressure while setting up to place on pump as soon as possible.

This new discovery well consolidates the Company's view that it is well placed in a significant oil fairway in this part of the Cumberland County.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Awesome annoucement just out:

WGP is now in talks with BP and Rio Tinto for carbon storage

BP Came to them ....This will put WGP on the media radar screens.

PLUS 200 BARRELLS A DAY FREE FLOWING...HOW MUCH MORE WILL FLOW UNDER PUMPING..AND THEY ARE HOOKING THAT UP THIS WEEK...

200BP X 365 DAYS X $65 A BARRELL = 44.7 MILLION A YR

ADD IN THE OTHER WELLS

AND THIS HAS TO FLY

SOMEONE ELSE CAN DO THE REST OF THE MATHS...i'VE SEEN ENOUGH

GLAD I HELD