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WestFire Energy Ltd T.WFE



TSX:WFE - Post by User

Comment by dmacdon Dec 05, 2011 12:42pm
276 Views
Post# 19292500

RE: Could be because of management underperforming

RE: Could be because of management underperforming
What makes you think they are not all over the Orion problems? Why don't you put in a call to the company if you want a detailed update. The update is changing weekly and WFE want to address the issue solidly, rather than throw money at it and perhaps make another mistake. My understanding is that WFE has retained top notch talent and are highly motivated to remedy this complex, sour wells situation. These things do not happen overnight, especially when you are dealing with a highly sour gas play. Remember that WFE bought Orion for the cash flow, and obviously Orion management obviously could have provided WFE with a better transition.

WFE got a bit unlucky with the floods and Orion timing. The gas is still downhole but they will have to spend some cashflow to get the production back on-line. Hopefully, there will be a learning from this development that will enable WFE to increase production or at least be more reliable in the future. This represents some great experience for the WFE team and should reduce their risk profile in the future as they continue to enhance production from the sour gas plays.
 
WFE learned that smooth operational transition is more important for highly technical fields and should consider place "smooth transition" bonuses for future transactions, and perhaps "closing penalties" if the balance sheet was found to be misrepresented per a mutually accepted independent auditor. Orion would likely have supported this approach, and actually should have pressed for this themselves.
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