WGP - Westralian Gas and Power

[krisbarry]

Re: WGP - Westralian Gas & Power

Additional info:

BP and CRA proposed development of a $2billion coal fired power generation at Kwinana W.A.

Negotiations ongoing with WGP to capture and store about 4 million tons of CO2 per annum.

WGP 54 million shares on issue .Todays 4 cent rise equates to only 2 million dollars.

What could this agreement be worth to WGP.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

I am quite suprised there is almost no discussion on this forum about WGP, and its recent announcments. Some big name companies have been thrown into the plot, and it is thickening. There is talk on another forum (Hotcopper) why BP or Rio Tinto did not consider just buying the leases from WGP instead of renting them.

Anyway on other news: we have seen more good flow results, and further drilling.

Here is the latest 3 month chart of WGP

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Is WGP a possible Takeover Target?

We might even see BP or Rio Tinto make a generous takeover offer to WGP. We do know that BP contacted WGP recently in regards to storage of Carbon.

Would a buy recommendation on WGP be to early to call?

 

[Profitseeker]

Re: WGP - Westralian Gas & Power

There is no chance of a takeover offer currently as otherwise we would have seen the offer already. What we do have is a company with a good plan. Secure revenue from Kentucky and the carbon trading; then drill the WA acerage. Short term Kentucy sucess will make it make new highs but the real company maker will be the results of WA. Come on give us the flow results!

 

[krisbarry]

Re: WGP - Westralian Gas & Power

It would certainly be possible if we saw a few "change of substantial notices" recieved over coming months and a rise in share price.

Stranger things have happened.

Alls we need is for BP or Rio Tinto to buy more than 20% of WGP's shares, then come out with a take-over offer!

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Here is an overview with sums from "Neil_WA" (member from hotcopper.com.au)

60 barrels of oil per day just about justifies much of the current Mareket Cap. using $US40/barrel profit ($A50) giving $3000/day profit, approximately $A1.1m per annum.

With around 77 million shares fully diluted (inc non-listed options though not the 13,700,000 Converting Incentive Preference Shares (“CIPS”) that are not convertible until SP hits 40 or 50c) the MC is about $11.5m.

This gives a PE of about 10 if no further production is found - which would be a bit high for an oiler (usually like about 6-8 due to finite resource).

Another 50 barrels per day would justify current SP alone without factoring anything for the value of their other projects and possible gas storage with BP. IF an agreement such as - "you drill the holes for us now, we produce the hydrocarbons and take any profit from them (or even 50:50 profit share), then you use the reservoir after we have finished" the WA plays could be brought to fruition very soon and with very little cost and major potential upside.

This remains very worth a punt - there is much less downside than many other plays because costs are very low and they are already producing.

If they manage to produce a total of a couple of hundred barrels per day things really start to look rosy - and with cashflow to fund their major plays (WA hydrocarbons) they could hit the big time - especially for option holders with a potential 10-30 bagger.

There is risk though - remember most hydrocarbon specs don't make big money - but the ones which do can pay for 20 plays that don't because the potential rewards are so high and come onstream so early (often only weeks to months from spudding well to break-even and from then it is profit - compare to uranium or Iron ore with MINIMUM three years from tenement acquisition to production (more likely 5-6 years for Uranium).

This is worth a punt though be prepared for 60% chance of a loss of some of your capital, 20% probability break-even or close to it and 20% probability of 5-30 bagger.

Here is the sums as I see them:

60% chance of SP fall to 5-10c justifies 4-5c of current SP
20% chance of breakeven justifies 3.5c of current SP
20% chance of multi-bagger (average 5-bagger, range 2-30) justifies all of current SP.

So I believe fair SP is currently about 23c.

If the next well brings oil at around 50bopd, the sums swing very much more in our favour, with probability of losing falling to about 10-20% (with suitably applied stop loss), break even about 50% and a multi-bagger 30%

 

[krisbarry]

Re: WGP - Westralian Gas & Power

In terms of charting we now see the formation of a "Dragonfly" Doji, (Marked in the red circle) which represents the bottom and a reversal signal is now current.

Definition:

The Bullish Dragonfly Doji Pattern is a single candlestick pattern that occurs at the bottom of a trend or during a downtrend. The Bullish Dragonfly Doji Pattern is very similar to the Bullish Hammer Pattern mentioned above. The distinction between the two is if there is a body or not. In case of Bullish Dragonfly Doji Pattern, the opening and closing prices are identical and there is no body. On the other hand the Bullish Hammer Pattern has a small real body at the upper end of the trading range.

Recognition Criteria:

1. There is an overall downtrend in the market.
2. Then we see a Doji at the upper end of the trading range.
3. The doji has an extremely long lower shadow.
4. However the doji does not have any upper shadow.

Explanation:

The market is in an overall bearish mood characterized by a downtrend. Then market opens and sells off sharply. However, the sell-off is suddenly abated and the prices reverse direction and start going up for the rest of the day closing at or near the day’s high thus leading to the long lower shadow. The failure of the market to continue in the selling side reduces the bearish sentiment. Now the shorts are increasingly uneasy with their bearish positions. If the market opens higher next day, many shorts will have a strong incentive to cover their short positions.

Important Factors:

The Bullish Dragonfly Doji Pattern is a more bullish signal than a Bullish Hammer Pattern. Its reliability is also higher than the Bullish Hammer Pattern.

However, a confirmation of the trend reversal implied by this pattern by either a white candlestick, a large gap up or a higher close on the next trading day is still suggested, to be on the safe side.

WGP Chart

 

[Sean K]

Re: WGP - Westralian Gas & Power

Here is an overview with sums from "Neil_WA" (member from hotcopper.com.au)

Here is the sums as I see them:

60% chance of SP fall to 5-10c justifies 4-5c of current SP
20% chance of breakeven justifies 3.5c of current SP
20% chance of multi-bagger (average 5-bagger, range 2-30) justifies all of current SP.

So I believe fair SP is currently about 23c.

If the next well brings oil at around 50bopd, the sums swing very much more in our favour, with probability of losing falling to about 10-20% (with suitably applied stop loss), break even about 50% and a multi-bagger 30%

I have absolutely no idea how anyone has come to these percentages, and conclusion that this is a 30% chance of being a 'multibagger'. Just abosolutely rediculous conclusions as a matter of fact. I'm perplexed to say the least. :dunno:

From a charting perspective, the divergence of the MACD to the chart makes it look pretty vulnerable, IMO. Amazingly low volume. The dragon fly doji is interesting, and the last one it had proved to be a reversal of some sort, but a previous one took it down from .175 to 15 in 3 days.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Yes its quite amazing how people read things so differently. The sums add up to this conclusion and the chart adds up to that conclusion.

So what do we do...throw the sums and charts away and read tea leaves?

Maybe its like the bible...an event occured in history, and then the story was told by so many different people, with so many different outcomes.

When it comes to T/A and F/A, I have no f_u** en idea, and it would appear that the experts tend to disagree on everything as well.

I constantly see examples of very well thought out T/A and F/A, only to have it shot down by another member.

On that note I put my hands up in the air, and await for Tuesdays close to confirm a bullish outcome, that will cement my Dragonfly Dijo as being correct. If not then I stick my fingers up to T/A, as it has no basis of being right!

Just by chance can anyone confirm without a shadow of a doubt that T/A actually works?

 

[krisbarry]

Re: WGP - Westralian Gas & Power

From what I can see the last doji took it from a bullish into a bearish pattern. This time the doji occurs at the end of a bearish run, signalling a bottom, and a reversal.

I stress though:

...a confirmation of the trend reversal implied by this pattern by either a white candlestick, a large gap up or a higher close on the next trading day is still suggested, to be on the safe side.

 

[Sean K]

Re: WGP - Westralian Gas & Power

On that note I put my hands up in the air, and await for Tuesdays close to confirm a bullish outcome, that will cement my Dragonfly Dijo as being correct. If not then I stick my fingers up to T/A, as it has no basis of being right!

Just by chance can anyone confirm without a shadow of a doubt that T/A actually works?

It does work, but only to probabilities. You know that STC! This individual situation is not the absolute judgement of TA, just another example. Just like all FA recommendations can be close to correct - one way or the other - pending other unforseen events.

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Well strike me bloody pink...I reckon T/A is actually working WGP is up slightly this morning, how ironic is that

Yes I have just been converted now...I see the light

Thankyou chartist, the dragonfly doji works, it really, really works!

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Look what is happening yet again: Another Dragonfly - Doji.

The last one that appeared caused a bullish run!

 

[moneymajix]

Re: WGP - Westralian Gas & Power

Current price is 15cents

Ann. out today.

Westralian Gas and Power Strikes Gas Deal with Electricity Generation
Developer; Expands US Oil Operations

July 4, 2007 Perth-based Westralian Gas and Power (WGP) is pleased to announce
the signing of a heads of agreement with ERM Gas. ERM Gas is a wholly owned
subsidiary of ERM Power a developer of gas fired power stations.
Under the terms of the deal, ERM Gas has the option to explore WGP’s coal seam
gas leases in south west Western Australia and fund their development with the
intent of supplying coal seam gas to ERM Power affiliated power stations.
ERM Power and its affiliated companies have interests in some 1700MW of gas fired
power generation in operation or under construction with several more major projects
in planning.
WGP Chairman Peter Briggs said he is delighted with the deal as it provides free
carry for WGP with all exploration costs through to production met by ERM Gas and
25 percent of gas reserves being retained by WGP. The Company’s initial
exploration program for the region has added weight to the concept that economic
reserves of natural gas are contained within the lease areas. With a substantive
partner keen on sourcing gas for power station projects, further exploration should
move along well. “Currently there is a gas shortage in Perth, and supply of gas to
power generation is a perfect fit for both WGP and ERM Gas,” he said.
WGP – A Diversified Energy Player: Since floating on the ASX in April 2005 as a
dedicated coal seam gas explorer, WGP has successfully transformed itself into a
diversified energy player boasting a portfolio of promising assets ranging from coal
seam gas exploration, oil and gas exploration, oil production, through to CO2
geosequestration.
Mr Briggs said: “WGP is committed to building its energy portfolio by seizing further
energy opportunities through increased exploration and beneficial 'free carry'
partnership arrangements (such as with ERM Gas). This will allow WGP to carry out
more exploration and drive other operations through to production.”

Kentucky USA: WGP 100 percent owns Sunset Energy LLC with 2,200 acres of
oil producing leases in Cumberland County Kentucky USA. This provides WGP an
ongoing and increasing revenue stream due to a successful and continuing
exploration program, which is to be expanded following a $350,000 capital raising
last week. The first of a program of 10 new wells are to be drilled towards the end of
July with more set to follow.

Perth Basin: WGP also holds two significant off-shore oil and gas exploration
permits with a 50 percent share of 4530 sq km of promising Perth Basin acreage
directly offshore Perth, Western Australia (Rottnest Island south to Mandurah). The
company also has last week acquired a 450 sq km onshore oil and gas exploration
permit EP455 located 12 km south of Eneabba.

CO2 Geosequestration: The Company is also investigating the provision of
geosequestration of CO2, from BP/Rio's proposed Kwinana power station, into
formations located in its Perth Basin lease area.

Stephen Thomas
Managing Director

 

[moneymajix]

Re: WGP - Westralian Gas & Power

Article in the Australian

http://www.theaustralian.news.com.au/story/0,20867,22024476-643,00.html



17c - up 9.677%

 

[krisbarry]

Re: WGP - Westralian Gas & Power

WGP just turned very bullish this morning with large trading activity. Finally more buyers than sellers. Might have been a delayed reaction to the last announcments.

Also note 10 oil wells to be drilled in July

Current share price 18.5 cents

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Drilling program of 10 wells starts this week in Kentucky, USA. Also note WGP has acquired more land leases.

See latest announcement.

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00739583

Current share price 17 cents

 

[krisbarry]

Re: WGP - Westralian Gas & Power

Current market cap of WGP is just over $10 million.

I see the current share price of 17.5 cents rising to at least 20 cents by weeks end just in pure speculation of the 10 well drilling program.

If WGP has any good hits of oil we are likely too see the share price spike to 40 cents or more.

If all 10 wells hit oil and bring the the surface about 30 bopd, then we have another 300 bpd to add to the market cap.

 

[Pommiegranite]

Re: WGP - Westralian Gas & Power

Current market cap of WGP is just over $10 million.

I see the current share price of 17.5 cents rising to at least 20 cents by weeks end just in pure speculation of the 10 well drilling program.

If WGP has any good hits of oil we are likely too see the share price spike to 40 cents or more.

If all 10 wells hit oil and bring the the surface about 30 bopd, then we have another 300 bpd to add to the market cap.

Dude...I'm interested in buying an energy stock.

However, having gone through this thread, I'm having a hard time taking any useful information out of it.

It seems to be full of predictions and contradictions, all by yourself.

Please can anyone lend weight to STC's price predictions?

 

[Joe Blow]

Re: WGP - Westralian Gas & Power

If WGP has any good hits of oil we are likely too see the share price spike to 40 cents or more.

If all 10 wells hit oil and bring the the surface about 30 bopd, then we have another 300 bpd to add to the market cap.

Kris, where did you come up with a figure of 30 bopd per well from? Did you pluck this out of thin air or is it based on something?