Good morning everyone. Welcome to the sixth Annual General Meeting of WestSide Corporation Limited.
During the 2012 financial year WestSide consolidated its position as a CSG production and exploration company.
While doing so we achieved significant momentum in our quest to unlock the latent value within the Meridian SeamGas business at Moura in Queensland's Bowen Basin.
This certainly is an exciting time for the Australian gas industry and more particularly in Queensland. More than $50 billion dollars of investment is pouring into the three LNG projects at Gladstone and within three years they will be exporting to a global market.
WestSide is ideally placed to participate in this market through its operating interest in Meridian SeamGas - the closest producing gas field to Gladstone with uncontracted 2P gas reserves available from 2015.
Throughout the extended period of takeover-driven uncertainty this year, WestSide has sought to remain focused on achieving its business targets and completing work programs to continue adding value to the Company's assets.
Production during the second half of the financial year achieved an impressive upward trend. This reflected the success of our well work-over programs and rising contribution from new wells which accounted for approximately 35 per cent of gas sales at the end of the period.
Since then several of Meridian's new high performance wells and other wells have had to be taken off line for work-overs and production has temporarily levelled-off. Of course, we have been concentrating on getting these wells back into full production as quickly as possible.
The Meridian operation is on the cusp of breaking even on an operating cash cost basis at current gas prices which are forecast to more than double to between $7 and $9 a gigajoule over the next few years.
The Company's reserves base also significantly expanded across all categories during the year, generating significant shareholder value at low cost through the certification of previously excluded coal seams at Meridian and recognition of production from new and rejuvenated wells.
WestSide has built a talented team of experienced oil and gas professionals who are providing the Company with an innovative edge.
WestSide remains well positioned to benefit from rising demand for domestic gas and feedstock for export LNG and the higher pricing that this growth is expected to generate.
However, despite our competitive advantages your Company still faces some significant headwinds and challenges in the form of cost pressures, increased regulation and constrained capital markets.
In this dynamic environment, your Board remains focused on growing and unlocking value by acting at all times in the strategic, long-term best interests of the Company and shareholders.
While WestSide's future looks bright, it is important to differentiate between the Company's business prospects and achieving the best financial return for shareholders.
In recognition of WestSide's progress and achievement, the Board received an indicative takeover proposal from Liquefied Natural Gas Limited (LNG Ltd) in February 2012.
Following receipt of LNG Ltd's indicative proposal, non-exclusive access to conduct due diligence was granted to LNG Ltd and its associated parties and other parties approached by Westside's advisers.
Clearly discussions with interested parties and the ensuing due diligence process developed into a lengthier exercise than the Board had initially envisaged.
However, your Board decided to explore all potential transactions with a view to maximising shareholder value and we were reluctant to set deadlines which might have hindered our ability to do so.
As announced on Tuesday, WestSide has received a new indicative, conditional, non-binding and confidential proposal to acquire 100 per cent of the shares in WestSide for a cash consideration of 52 cents a share.
The party which has submitted the proposal has required that its identity be kept confidential at this stage. Clearly however, it is not LNG Ltd as they have since advised the market that they had not submitted a new takeover offer to WestSide and have no intention to do so.
The Board has not yet formed a view on the indicative offer price and shareholders are advised to take no action at this time while the Board assesses the proposal.
The Board has agreed that WestSide will not solicit other competing proposals for a three week period to allow time for further due diligence and negotiation.
Uncertainty remains, however, as to whether any binding proposal will eventuate which the WestSide Board could recommend to shareholders.
On behalf of the Board, I would like to thank all members of the WestSide management team, our employees, our joint venture partners and contractors for your valued contribution and ongoing support.
I would also like to thank shareholders for their continued patience as the Board seeks over the coming weeks to negotiate a firm and binding proposal which can be measured against the value of the Company's other available development options.
WestSide Corporation Limited
About WestSide Corporation Limited:
WestSide operates the Meridian SeamGas CSG fields west of Gladstone in Queensland's Bowen Basin. The Meridian gas fields comprise a range of CSG assets including a petroleum lease, gas rights in mining leases and gas compression and pipeline infrastructure connected to Queensland's commercial gas network. WestSide holds a 51% interest in the fields with Mitsui E&P Australia Pty Ltd holding the remaining 49%.
Elsewhere in the Bowen Basin, WestSide is currently operating an exploration and appraisal program at the ATP 769P (Paranui) and ATP 688P (Tilbrook and Mount Saint Martin) sites. WestSide holds a 25.5% interest in the tenements with Mitsui E&P Australia Pty Ltd, which has a 24.5 % interest in each, and QGC, which holds the other 50% in each case.
WestSide also has a 51% operating interest in two Galilee Basin (Queensland) tenements (ATP 974P and ATP 978P) covering an area of over 13,280 sq km, with Mitsui E&P Australia Pty Ltd holding the remaining 49% in each.
WestSide Corporation Limited T: +61-7-3020-0900 F: +61-7-3020-0999 WWW: www.westsidecorporation.com
WestSide Corporation Limited
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