Westmount Energy Share Discussion Threads

[zingaro] 06/8/2007 12:14

why the large drop in the last couple of weeks ? The NAV may have gone down but not that much.

[deswalker] 16/7/2007 17:14

The requirement to maintain a website falls under Rule 26 of the AIM Rules for Companies ....



Details of what needs to be presented are on pages 1 and 2. In particular page 2 states that all AIM companies need to implement the new requirements by 20 August 07 so we should get something by then.

[deswalker] 06/7/2007 08:46

A very similar investment to WTE is LTR.

Fully diluted market cap (at 4.25p offer) = £13.23 mill for which one gets ...

- Option adjusted net cash = £4.344 mill
- 4.8 mill Western Goldfields shares (TSX:WGI) = £6.453 mill
- 9.6 mill Tanami Gold shares (ASX:TAM) = £0.613 mill
- 85 mill Tamaya Gold shares (ASX:TMR) = £9.40 mill
- 15 mill Tamaya Gold options which have decent value but assume they're worthless.

Total NAV = £20.81 mill excl the value of the Tamaya options. Currently offered at a discount of 36.4% to its fully listed holdings plus cash.

The one proviso is that the Tamaya holding is in consideration for a sale of a Chilean gold project from LTR to Tamaya (announced yesterday) and it still needs Tamaya shareholder approval at an EGM (standard practice for a sizeable acquisition). However the Tamaya bosses are already talking about their intentions for the project as if it's a done deal.

Liquidity of the holdings is good and LTR looks good value to me on the same basis as an investment in WTE. WTE has the added kicker of the Eclipse stake only being valued at book whereas LTR has the (smaller) added kicker of 15 mill Tamaya options being priced at zero in the model.

Might be worth a look if you're a TBV discount junkie like me. DYOR.

Des

Edit: I should add that of one works on undiluted numbers the discount actually increases to 39.3% because the 41.85 mill LTR options have a weighted average strike price of 4.645p which dilutes the NAV to a small degree.

[thetworonnies] 23/6/2007 12:05

We're pleased as well Mr Walker!

[deswalker] 23/6/2007 10:31

Thks. Very good news about the website. Just call me Des btw :)

[whackford] 23/6/2007 09:12

Thanks Deswalker for confirming my figures and elaborating on other outstanding options. I recently contacted WTE re. CDS so do not feel inclined to do so again.

I too hope WTE are not asleep. They have 2 new directors so somebody should be keeping an eye on things.

Now here's a funny thing! (as Maxie Miller used to say). I'm told that WTE will be putting up a website - apparently its an AIM requirement. This should make shareholder contact with the company possible by email - good.

[deswalker] 22/6/2007 15:53

whackford - Re CDS, yes your figures look correct to me but in addition there are all the other outstanding warrants and options to include. The upshot appears to be (according to my cursory glance) that there is considerable dilution (circa 40% or more) at a tenth of the current price. As I mentioned in my previous post I sure hope WTE aren't asleep at the wheel and are lightening up at these levels but I doubt it. Ofcourse CDS/Paraguay could be a real winner but it is currently very fully valued at the moment IMO.

[deswalker] 20/6/2007 15:50

Mick,

Not sure what's going on with CDS. I wouldn't be too unhappy if WTE were releasing some cash into this rise but I doubt it somehow. I'd rather they sold down here instead of SEY or DES.

I guess you saw SEY's RNS saying that Thunderstud looks promising (multiple zones etc) and that testing will be later this year.

Also DES look set to drill next year plus Eclipse coming to market.

Des

[mickinvest] 20/6/2007 14:27

From my post 1st June

Market Cap £6.4m @ 87p

Sey 30m x 15p £4.5m
Des 5.5m x .325 £1.78m
Cash £650k
CDS 37.6m x 2p £750k
Eclipse 244,000 x £7.50 £1.8m

= £9.48m

Now

Market Cap £7.06m @ 95p

SEY 30m x .1575 4.72m
DES 5.5m x .3025 = 1.66
CDS 3.76m x .325 = 1.22
cash £650k
Eclipse £1.8m

= £10m

[mickinvest] 20/6/2007 14:19

I've took a couple of kicks at the tyres on the back of CDS rise.

Mick

[deswalker] 06/6/2007 09:13

whackford - No I've heard nothing about Eclipse but I'm still hoping for a flotation sometime in the next 12 months.

I'm done buying now with an average price of 92p. I shall sit and watch developments and expect some cash windfalls as the portfolio matures, starting with SEY and DES.

[whackford] 06/6/2007 08:41

DesWalker - I agree with your figures and method of adjustment for options. Nice to see some posting on this board. I've heared nothing about Eclipse Energy - has anybody else?

[deswalker] 02/6/2007 19:50

Steve,

Ta very much for the info and the link. That's the first place I've seen the term used beyond the link I gave and that's after a fair bit of googling. So far the well looks promising but will it flow ....

Cheers,

Des

[chopsy] 02/6/2007 18:25

Ah, not the ones I'm used to, sorry, just don't post here.

[thetworonnies] 02/6/2007 18:20

Main one does!

[stevie blunder] 02/6/2007 18:20

Hi Des, this is a bit out of my field, but from what I can gather a "dryhole tree" is a safety tree put on a well being temporarily left uncompleted. The well will have no pressure in the tubing, as it has not been perforated, but they need something on the top just in case the casing leaks in the meantime.

Here is an Example Well Plan I googled, which mentions such a procedure. Look under 2.4 Production Hole Interval part C Cement, item 3



"Test packoff as directed. Nipple-up "dryhole tree" on tubinghead for temporary abandonment. Close all valves and remove all wheels and gauges. Install locking nuts on wellhead equipment to protect against theft."

I can't tell much from the well history, except to say that this is a realtively deep well and running liner is expensive, so they must have something to test.

Not much you didn't know there ;-)


got to go, my tea's oot, as they say up here

good luck,


steve

[deswalker] 02/6/2007 17:52

Message for StevieBlunder:

Hi Stevie,

I'm currently following the progress of the Thunderstud well being drilled by SEY in Louisiana. The Louisiana government have an excellent website detailing the progress of each well drilled on their patch. The details for Thunderstud are here ...



The Scout Info dated 21/5/07 says that they have ran a 7-5/8" tieback liner, installed a Dry Hole Tree (DHT), released the rig (RR) and are waiting on a completion rig (WOCR).

Now from the Schlum directory it appears that a tieback liner is positive as it is often done in preparation for flow testing and obviously WOCR is positive too. However, I cannot find any indication what a Dry Hole Tree is for ? Some of the guys on the SEY thread seem to think its a temporary cap whilst we wait for the completion rig but I don't like to hear the words Dry Hole anywhere near my oily investments. Can you help ?

Based on what you can tell from the drilling record what does the well look like to you ? Any thoughts very gratefully received.

This is quite a big well for SEY and also for WTE although the WTE share price is already very well underpinned even if it comes in dry.

Many TIA,

Des

[stevie blunder] 02/6/2007 17:51

Hi Des, fire away, I'll help if I can!

[chopsy] 02/6/2007 17:33

None of the threads seem to have the charts in the header.

[deswalker] 02/6/2007 17:30

Cheers Mick. I'll check out the MRS board for Stevie. Des

[mickinvest] 02/6/2007 15:22

Afternoon Des

Thanks very much for the detailed explanation yesterday, all makes perfect sense. Afraid I'm more a ballpark figure man when researching things and tend to leave out quite a few of the smaller details and something I'll keep an eye on in future. Happy to see the directors at Dragon only have a few options in the money and a real eyeopener to see the cost of the options that Venture Production cashed in this week!

You'll find steve on the Melrose Resources (MRS) thread and dropped him a quick e-mail to let him know he's a wanted man. More of a golfing and fishing man myself so won't be any use for your query :>)

cheers

Mick

[deswalker] 02/6/2007 14:31

Mick,

Are you in the oil industry and if not do you know where StevieBlunder hangs out these days ? I've got a technical question I want to ask.

Des

[deswalker] 01/6/2007 17:24

Mick,

I simply add 750k shares to the current shares in issue and add 750k * 1.035 = £776,250 to the current cash balance. Technically I should discount this amount back from when the options are exercised to today but that is being a bit too precise.

So at the SPs listed above I have

SEY = £4.5 mill
DES = £1.7875 mill
Eclipse = £1.83 mill
CDS = £0.75 mill
Current Cash = £0.519 mill
Option Cash = £0.776 mill

Total excl Option Cash = £9.39 mill
Total incl Option Cash = £10.16 mill

Undiluted Shares = 7.425 mill
Diluted Shares = 7.425 mill + 0.75 mill = 8.175 mill

Undiluted NAV per share = 9.39/7.425 = 126.46
Diluted NAV per share = 10.16/8.175 = 124.28

So if the discount was to close completely the share price would need to converge on the 124.28 figure (as opposed to the 126.46 figure) as in that instance the options would move into the money and so would need including in the correct NAV per share.

HTH,

Des

[mickinvest] 01/6/2007 16:37

One query on the above Des, if they are straight forward options that they have to pay for at £1.035, how would you account for the £776,000 that the directors have to stump up to buy them in the first place?

If I'm on the right track, surely they need to stump up the cash and irrelevant after buying them whether they sell some or keep them all.

Would the cash not go to the company balance sheet if they need to issue the shares?

Mick

[deswalker] 01/6/2007 16:06

Mick,

Yes they lapse if the share price isn't greater than 103.5p at maturity but when calculating a fully diluted NAV I like to assume that all options have been exercised rather than just those that are in-the-money at the current share price

For example imagine that they had 20 mill options outstanding at a strike of 103.5p. I certainly wouldn't be happy to ignore them because the current share price is 90p. They would have a real dampening effect on my final sale price expectations as the dilution above 103.5 would dramatically reduce the upside. Consequently, in this instance I wouldn't have bought as many as I have because the the risk-reward (upside-downside) ratio would be a lot less attractive than when they only have 750k options outstanding (as is actually the case).

So the NAV diluted by all outstanding options helps me to assess my reward whereas the NAV only diluted by those options currently in the money helps me with my downside risk.

Hope that explains my logic.

Des