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RESEARCH REPORT
Taylor Collison --- (contact them for full details)
31st March 2014

WestSide Corporation (ASX: WCL)

Speculative Buy

Gas Flowing, 20 Year GSA Secured

Key Points
? WestSide Corporation (WCL) has announced a 20-
year Gas Sale Agreement (GSA) with GLNG. The
contract allows for a staged ramp up at the
Meridian SeamGas operation (WCL 51%, Mitsui
49%) in the Bowen Basin, to 65TJ/day and is oil-linked
pricing from 2016.
? Current Gas Sale Agreements (GSA’s) are at a
value of ~$3.50/GJ (expire in 2014). The terms of
the new contract are confidential, but an average
predicted price of between $7-$8/GJ is more in
line with current market conditions.
? WestSide plans to drill 6 production wells
starting by May and (pending success) a follow-up
campaign in late 2014 to ramp-up production into
new GSA from CY15. The drilling contract will be
awarded soon, now that the GSA has been signed.
? WCL is currently under a takeover bid from
China’s Landbridge Group Co. at 36c/share. In
light of the recently announced GSA, the
WestSide Board has formed the view that the bid
is “manifestly inadequate”.

Our View
WestSide Corporation (WCL) has undergone a
transformation over the past 6 months, with a
focus on optimising gas production (aiming for
$2/GJ operating costs once in full production).
WestSide is in a unique position to tap into the
existing GLNG pipeline that feeds straight into
Gladstone. The gas reserves are located adjacent
to this infrastructure and hence the low projected
capital outlay ($1.5m per well) in the initial phase.
Based on these favourable conditions, we
maintain our Speculative Buy recommendation.

.......The WCL directors have determined that entry into this gas sale agreement is commercially significant; which was a key deliverable in keeping with the business plan and was well publicised prior to Landbridge’s initial approach. In addition, WCL has considered the price included in the conditional proposal and has formed the view that it is inadequate with the company’s current market position.

......The Meridian gas field is in a suitable area for gas production expansion. The topography of the land located within the Bowen Basin is relatively flat; allowing for ideal locations to drill and easy development of any further pipeline work (should be minimal due to the main gas pipeline delivering into Gladstone running through the WCL permits). The quality of the gas reserves is well established, with favourable high methane percentages reported and minimal water content to deal with. The gas lends itself to a number of end-users based on these characteristics and is one of the main reasons why the GLNG partners have signed a contract of such longevity and favourable terms to WestSide.