NOG vs PPP

[FRED]

NOG has PRCC and Kupe over PPP. Both are long term projects that should come in. There are options that need to be converted mid-term.
The option factor will affect.

PPP has double the gearing to the current drill. If Pukeko fails then it is still double the gearing on 2 oil finds..a potential 3rd drill.. and IMO...production.

So today at NOG .69 and PPP .135 I favour the later.

Also for the equation. NOG have taken more PPP at .12 via friendly placement. This IMO is great because when the dollars are needed for production the small guy(PPP) is part owned by NOG. I reckon a deeply discounted cash issue that is almost like a bonus issue(or that follows), because the parent must cough also.NOG shareholders may also have to front up. Will not hurt and with the NOGOC scenario maybe well into the future.

Comments appreciated.

FRED

Disc....NOG and PPP

[Happy]

Good comments Fred.

I don't hold PPP but do NOG and AWE as my oil exposure, I also hold Shell brought in last few months ;)

If it is merely exposure to Tui, Amokura, Pateke, Pukeko and Kiwi you want PPP is cheaper entry, although significantly higher risk.

[FRED]

Happy

Disagree on the higher risk. Few people wiil have calculated the gearing and relative merits of NOG/PPP. Only last week did the publications I subscribe to start crunching the numbers.

Regardlees of Pukeko outcome these guys have an oil field. IMO the third hole will be drilled. It will be around Tui/Amokura. It will be a development well and therefore far less risky than a wildcat.

Whether it will turn up commercial after 2...3...or 4 drills...it will be commercial. The JV has a willingness to fast track it with first oil out in 2005/2006(depending on who you read).

Some are predicting that Tui could flow at up to 35000 bopd. Fire in a few more holes like that and we may need 2 ships to cart the stuff to shore.

Tui was an 8m column with Amokura 12m of oil.

There are few certainties in the share game however I just don't see this as risky at all.

Buy it on the ASX. Buy it now? On the dip when Pukeko comes in badly? Buy it on the screaming run as it breaks through .16 on Pukeko success?

Its a no brainer guys.

FRED

[FRED]

Stop press in todays StockAna lysis publication.

The rig is contracted to another party for 1 drill after Pukeko. Transworld is considering bringing the rig back to drill 2 quick wells Pateke and Kiwi.

PPP rising on good volume on the asx.

FRED

[Misc]

Hey Fred ... the drill after Puke is in PEP38482 , immediately north of Pateke/Tui/Amo. Operator is STOS. Could ignite the black gold-rush in this area if sucessful.
Then its onto Pateke I beleive.
Meanwhile PPP getting serious bid action in OZ today while NOG snoozes.
Good westerly blowing .... sure I can smell oil today lol.

MISC

[FRED]

Misc

Coming from the East where I am sitting. Slight whiff of dust.

More often than not in my experiance it will be the direction of morning bird flight that calls it early.

FRED

[CAM]

Wow...amazing to see the buy depth all but disappear on PPP this morning....how much of the price was on a success at Puke???...where do you think it will settle to?

[Happy]

PPP is a far more leveraged entity. It is closer to vapourware than NOG, hence the loss of depth...

Would like to see you #s on this Fred if you think otherwise. Unlike NOG it has fewer bankable assets (ie no Kupe or PRCC) and no "guaranteed" capex cashflow like NOG has with the OCs. Though accepted more upside exposure to the current drilling program at a cheaper price.

[Misc]

Freds asleep in the Jungle ....



Below is a summary from StockAnalysis on valuations.
Summary Pukeko Discovery Size
Valuations 250 mmbls/ 80 MMbbls
& Leverage $/share % $/share %
AWE 1.09 74%/ 0.35 24%
NZO 0.91 147%/ 0.29 47%
PPP 0.60 444% /0.19 142%

Gives you an idea of the leverage side of the equation.
Sure PPP have no PRCC or Kupe , but they do have 10% of PEP38460
which already has proven up around 50mmb from Tui/Amokura.
PPP's share , based on 'in ground' value of USD10/bbl = AUD71m
or about 30c/share.... plus they have resrves at Taunton offshore NSW , some dwindling gas cashflow and 3% share in Muggles propect to
be drilled next month in Oz.
PPP cap is about NZD25m vs NOG NZD100m approx , or $150m after exercise of options next year.
I'm sure Fred will critique these # when he surfaces.
rgds
Misc

[FRED]

Misc

Yep they are the numbers all right.

Grabbed a few PPP on the supposed bad news.

Gas and coal are all very well and good but the oil is the sexy one.

And a very pleasant jungle it was.

FRED

[Misc]

Oh , PPP also was awarded in Dec 03 , 10% of PEP483 , which is a huge permit to the West of Tui/Amokura.
Given the sucess of Tui/Amokura , and the fact STOS will drill in its permit (PEP38484) just north of Tui/Amokura , this could be extremely valuable license...... still need cash though , but fasttrack of Tui/Amo into production late 05 will help , especially with these wells spewing at 35,000bopd each !! That may drain both Tui and Amokura in 2 years flat but value after production costs of USD750 million .... PPP's share USD75m or AUD100m (AUD45c/share)... thats just Tui/Amokura , I dont think the market has yet factored in just how significant the sucess Amokura of is.
Treble these numbers if Pukeko hits!
;)
Misc

[bermuda]

Misc,
Maari will produce at 30000 bpd but I understood both Tui and Amokura would produce at about 5-7000 bpd each.Your numbers look great but where were they sourced?Fingers crossed for the next few days.Good to see the fish have stopped swimming in the negative direction and have now turned around.Cheers

[Misc]

Bermuda... look at NZOG website ... www.nzo.co.nz and check what it says under 'Tui' .... thats where I get the 37,000 bopd figure.
Is that what your question was ??

rgds,

Misc

[hoppy]

PPP got to be the the better BET total licence say 100 mill barels tui/amokura/pukeko/kiwi etc at daily combined 40000 BARELS PER DAY ppp at 10% must = 57c that share register is going to attract some bodys eye and (total 100m and 40,000) are on the low side. your views please hoppy ppp holder

[Misc]

Totally agree Hoppy :) and Fred has been proven correct . PPP up strongly today while NOG sleepwalks!
Register is wide open , may attract the likes of TapOil or even AWE ?
Or even NOG themselves ..... again lol

Anyway , as they say , every dog has its day ..

I hold PPP.

MISC

[Happy]

I must admit that yes PPP offers cheaper leverage into the exposure to the permit area, but also equally far less diversification and greater risk than NOG.

[Misc]

Happy ... I think the very real chance of corporate activity in PPP will underpin the sp short-term. You are right about the risk. But at 15c there is very little downside imho vs upside is potentially 3x in the short-term vs AWE/NOG may rise 'only' 30~50% on a positive Puke outcome. Certainly the punters in Oz seem to agree with this ... today anyway.

Misc

[FRED]

Misc

Agree with the potential corporate activity...although with NOG having a sizable chunk any suitor would have to pay.

Important for the comparison between NOG and PPP is the time horizons of the developments. Kupe/PRCC are both medium / long term cashflow givers. The oil could well be the first to supply the JV with cash.

PPP has double the gearing to this near term cash and that is what the market will and is focusing on currently.

And NOG still have those bloody options to convert just in the middle of all the fun.

Still seeing a swap between the 2 IMO.

FRED

[hoppy]

SERIOUS interest happening in PPP. in regard to the NZ SCENE PPP has been the forgotten :sheep: but if the black gold in total {260licence}turns up in sustantial volume 100mill ppp will become a50cent plus share( quicker than NRL PLAYERS CAN FIND THERE CELL PHONES}hoppy

[bermuda]

Some serious trades now occuring with 909,000 NOG changing hands TODAY.Compare that with the TOTAL for the YEAR ending 30 August 2003(from annual report page 36) of 18,173,314 shares traded.
Slowly but surely the NOG potential is being recognised....and we're only just getting started....

[waaihoek]

The real comparison should be between PPP and NOGOC !!

If PPP is heading for a 3x multiple in the near term based on Puks and Tui etc, then if Puks/Tui etc can indeed add that kind of value then it's reasonable to suggests another 50 or 60 cents on the NOG price. If NOG = $1.35 then NOGOC = 80c allowing 5c premium to the net exercise price for the time cost of money and future gearing potential.

Thus NOGOC could show a 3x multiple with added support for further multiples. Apart from Puks and Tui etc, NOGOC can hugelly benifit from progress and crystallizaation of the Kupe and Pike projects.

PPP only has Taunton, pretty smal fry, as a possible development, though whether Apache will push Taunton along this year remains to be seen. PPP does have approx $3m cash plus some gas production income from the Carnarvon basin, but this is rapidly decreasing, whereas NOG has $20m in the kitty.

PPP multiple growth potential is not so clear .... it will become increasingly more difficult to multiply its current 20c price, whereas for NOGOC every 25c increase in NOG's head shareprice will see another multiple increase over the present NOGOC price.

Also PPP is not in a strong position to raise significant funds for a Tui etc development, as well as new 3D seismic surveys over Puks/Hector, short of selling down its percentage (dilutory) or issuing new stock (also dilutory). NOG has a big option to sell down on Pike for near term development funds.

No doubt others will see it differently ....

W

[Misc]

Hmmmm , interesting thought. Cant agree though.
The key will be sp appreciation once Pukeko result is known.
PPP has the most upside imo.
It is likely there is at least 100mmb , possibly 200mmb in PEP38460.
This , if correct, is worth $100m to $200m to PPP inground or 40c to 80c per share.
Now , if say the sp can move up to 35c (to be conservative) , then the Co only needs placement of say 10~20m shares at , say 30c to pay its share of development costs on the 'black diamond' Tui/Amokura/Pateke/Kiwi fast-track production plan.
After that , its chequity cheque cheque cheque ! And no huge dilution ... may even be bank fundable with NO dilution.
Also , these valuations are fpr PEP38460 only ..... whats 10% of PEP38483 (west of Tui) worth NOW ?? Plus Taunton , plus Griffin Gas.
Thats my opinion for what its worth..... PPP will outgun NOGOC percentage wise in the near term , I think.
Meanwhile , time to top-up or enter AWE , Galleon South 1 to be drilled in acouple months off Dunedin , targeting 200~300mmb ... all this on top of the Taranaki action !!
Misc
Misc

[bermuda]

Waaihoek/Misc, absolutely agree NOGOC will outperform PPP over the next year.The finalisation of Kupe will lift NOG to a level where the exercising of the options will be a fait accompli so much so that NOG could hock off Pike River early and still have fat to spare.Either way NOGOC will outperform....but if Pike gets sold/distributed early, remember it is only the Head Shareholders that get rewarded.
Also NOG/NOGOC have exposure to PPP through direct ownership of approx 16 million shares by NOG.Will watch this scenario with interest as hold NOG,NOGOC and PPP....wonder what Monday's news will bring?Has been an exciting year that's for sure,...with more to come.

[waaihoek]

Misc,

There are no producible reserves yet proven in 460 !!!!!!!!!!!!!

There is the possibility of reserves at Tui etc, but even here their proven producible status will not be known untill all the data is worked up for Tui, Amo and hopefully Kiwi and Pateke. At this stage and for the next several months the sp can only but reflect the possibility of these reserves, we wait for the additional drilling results and then the reservior engineers will have to do their modeling etc, and then the bean counters will have a go at the financial numbers and try and estimate the bottom line before the JV spends maybe $200m on a field development.

The sp no doubt will anticipate the possibility of a successful field development, but trying to quantify and ascribe value to inground barells right now is not realistic.

Puks, if it does have producible oil, is even further down the track, and while one can think (and dreams are free) of what it might do for the sp, the value will be heavily discounted.

At best its up to each investor/punter/trader to gauge more by gut feeling what the likely risk/reward ratio might be for the oil in 460, and then to try and ascribe a value in cents per share for this gut feeling. But the gut feelings often lead to indigestion, hence the volatility of the sp.

But Kupe and Pike have proven reserves and lots of reservior and finacial numbers have been/are being crunched to model the various aspects of these two projects ... and this is likely to come into sharp focus over the next few months ... and this will add real value to the NOG head sp, and hence the options.

As Happy or was it Hoppy have suggested earlier, the PPP sp has the most "vapourware" of all the JV partners, and AWE the least because it has a number of maturing projects well advanced -- BasGas (similar to Kupe) starts to produce a revenue stream later this year.

So in my book over the near term the NOG options have the best mix of gearing plus projects maturing plus the drilling upside of Puks and Tui.

W

PS -- wrote the above before reading Bermuda's post which was posted while I was busy on the keyboard.

[hoppy]

mmmmmmmmmmm looks like ppp could be the more genuine going on aussy/nz markets.to much flip flop on nog/oc[:p][:p][:p][^][^] hoppy

[FRED]

A day when the brave purchased.

Oil and oil and oil fields.

FRED

[zig-zag]

in for a penny-in for a pound
now is the time to aquire more i feel to fred
runnin outa coin here, but otherwise wood.
next at 12.5 plenty of them tho......(1.2mil)
good effort

[clearasmud]

PPP could be made from next drilling round.
according to AWE sales poss from late '05!
Disc: hold

[bermuda]

Yes, as NOG Chairman Tony Radford recently stated 'we have a near-term oil development in our sights'.This little statement has been ignored by the market but expect a lot more significant news out shortly.And what's good for NOG is going to be even better %wise for PPP.I take it from 'Clearasmud's' post that AWE are now saying the same thing.i.e.Oil Development coming up shortly!! and I believe that's with or without Kiwi and/or Pateke.Hold on tight and enjoy the ride.

[Misc]

See attached link

http://www.asx.com.au/asxpdf/20040608/pdf/3lt7n2vknfg6s.pdf

Muggles to spud to June 23rd :)


MISC

[CAM]

ppp, nog or nogoc????

whichever one.... this surely has to be good for a company the size of ppp

[trendy]

Anyone care to provide some analysis (FA style) on the value of PPP currently and the potential SP valuation with a strike at Kiwi-1.

The leverage looks good with PPP having 10% stake in the prospect.

[Paper Tiger]

The issue with the PPP share price is that it hanging round the 20c mark, below bids can be in 0.1c increments and above 1c. 20c to 21c represents a 5% price change.

That puts a ceiling on the price until the next good news, but it is also an opportunity to sell at 1c more than you bought and make money.:)

[etrader]

quote:Originally posted by Paper Tiger

The issue with the PPP share price is that it hanging round the 20c mark, below bids can be in 0.1c increments and above 1c. 20c to 21c represents a 5% price change.

That puts a ceiling on the price until the next good news, but it is also an opportunity to sell at 1c more than you bought and make money.:)

Just cracked the .21c mark for the first time this morning with good depth in at .20c on the buy side, hopefully this will create the.01c cent movements up and down now.
Just picked up a bundle at .20c yesterday, so when the next well results come out, if they are positive there could be a rerating higher than todays levels.

Can anyone post the exposure % holdings in the different wells please.

[CAM]

Not sure but I think PPP has 10% of the permit area, with NOG having 12.5% and AWE 20% the rest being held by the operator

[etrader]

Any thoughts now the share price has come off 25% from its peak, seems crazy with all the good news of recent times and proven oil down there, that one well been dry has slammed the share price to this extent, anyone care to share any thoughts on PPP as a dual listed company where they are heading.

www.panpacpetroleum.com.au to visit the parent site or
www.nzo.co.nz .

anyone buying this stock over NOG or NOGOC

[kittydashwood]

Yes I'm buying this one long term. I hope to hold for the next five - seven years. I think a fair price for this share if they move towards production from the existing finds is.35 - .50 cents depending on just how big the finds at Pat & Amo are.

Disc. hold 84K @.145

[trendy]

NOG has a great report and PPP jumps 15% today on good volume. What's up?

[fish]

bermuda -i value your posts in particular
whats your opinion on the nzog agm today
cheers

[bermuda]

Hi Fish,thanks.Will enlarge later but in brief this company is now well on track to deliver on its 3 projects and I will not be selling until way past 2010.We are looking towards a company with gross revenues in excess of $160m per annum by 2007/8.This is not dream stuff,it will happen.The Kupe development which will be announced shortly is a real longterm gem for NOG with some really exciting upside.
PPP also looks well poised with a 10% share of Tui.
An excellent AGM.

[fish]

thanks bermuda'
just waiting for macdunk to sell off his stake then i will jump in with all my spare dosh-hopefully with the addition of 57 k when i get my access losses reimbursed-this is taking far longer than the bnz promised.
did the agm provide seafood and wine?
If so i will make sure i attend next year
Thanks in anticipation
P.s
eat as much fish as u can and drink red wine.

[cloggs]

Last time NOG had a big rise it went to just under 90 ct, and PPP followed then and went to 20 and 21 ct. NOG has now gone up to 94 ct but PPP seems to be staying in that 15 to 17 ct area. I realise they are 2 different shares, but kind of expected PPP to follow NOG after the recent Kupe news. Did I misunderstand?

[clearasmud]

quote:Originally posted by cloggs

Last time NOG had a big rise it went to just under 90 ct, and PPP followed then and went to 20 and 21 ct. NOG has now gone up to 94 ct but PPP seems to be staying in that 15 to 17 ct area. I realise they are 2 different shares, but kind of expected PPP to follow NOG after the recent Kupe news. Did I misunderstand?


PPP is being affected because of a little selling of ppp.asx by a few doing their sums on a disapointing 20m barrels for TAP ie2mbbl@$10/250mil shares= 8c share.
But imo this is temporary and PPP will start to move soon because
The prospectivity of their leases is just compelling.

Cloggs, PPP has no interest in Kupe.

[kittydashwood]

10$bbl? Clear as how do you figure this?
Also proven reserves could be more/less although the announced reserve for PAT is very conservative. Watch for an upgrade just after committment to development mid 2005.

On one thing I agree if there is a "fairway of oil' west of Maui then this is a compelling reason to jump on before further exploration.

[clearasmud]

quote:Originally posted by kittydashwood

10$bbl? Clear as how do you figure this?
Also proven reserves could be more/less although the announced reserve for PAT is very conservative. Watch for an upgrade just after committment to development mid 2005.

On one thing I agree if there is a "fairway of oil' west of Maui then this is a compelling reason to jump on before further exploration.


Kitty,Just an estimate for inground value of offshore oil.
Whats your estimate?

[kittydashwood]

I suppose 35% of the mean oil price, so @40$ bbl (.145 cents ps on the JV release figures estimate). Interesting how OBV is rising for ASX PPP and falling for NZX:PPP.

[ynot]

dont know much about PPPs relationship to NOG, [if any,] but can anyone explain why PPP has not moved anywhere during NOGs recent rise. thanks

[clearasmud]

quote:Originally posted by ynot

dont know much about PPPs relationship to NOG, [if any,] but can anyone explain why PPP has not moved anywhere during NOGs recent rise. thanks


A lot of the current NOG action is related to the coking coal side

[trendy]

Hmm...some of NOG rubbing off on PPP. If you can't buy a penny stock like NOG at less than 30 cents why not PPP....

[CAM]

yep could be...NOG own 10% of PPP if I remember correctly and Allan Tattersfield, the owner of Walker and Hall, has just announced a 5% stake. Maybe people looking at it as a play to get into the West Taranaki area where they are confident of finding more oil. Mitsui are to carry PPP for US$9.5M of TAP development costs which would be close to its share. PPP has the same % of TAP as NOG...12.5%. NOG could look at increasing its stake in PPP or maybe even AWE the other joint venture partner. Perhaps PPP has been overlooked with the mad scramble for NOG shares

[fish]

oil prices have dropped heaps.NOG has coaking coal which is increasing in value
It would be great if someone with more expertise than me could give a NTA of this stock at current oil prices and then for a range of prices

[bermuda]

CAM,
PPP is certainly one to hold.They have 10% of TAP.NOG have 12.5%.

[kittydashwood]

Seems that the OBV on the NZX has botttomed out and started to mirror the rise on the ASX. Still feel that large shareholders are at work increasing their holdings, maybe PPP will delist from the NZX, maybe the OBV rose on the ASX side without rise on the NZX side because of the 5% -2% discount.

PPP has been ignored over the last few weeks but with proven reserves at TAP and many good looking prospects to follow PPP will react swiftly upwards to any news.

Still think far value is north of .22 cents

Holding since late 2002

[blockhead]

kd,
Have not followed PPP too much other than its association with NOG, how silly would it be to take a bit of NOG profit and stack it into PPP, a bit like a bob each way ????

Blockhead

[trendy]

Blockhead you have leaked "our cunning plan" :)

[trackers]

i think i will send some money that way too - for the reasons mentioned above and also because i feel that once investors see a bit of confidence in oil and gas shares, they will jump on the bandwagon.

well thats the theory anyway.

[trackers]

umm yea also the buy 400,000 to sell 150,000 looks positive.

[CAM]

quote:Originally posted by trendy

Blockhead you have leaked "our cunning plan" :)


He sure has...but I am not too worried...most of my cunning plan is already in place;)

[etrader]

quote:Originally posted by CAM

yep could be...NOG own 10% of PPP if I remember correctly and Allan Tattersfield, the owner of Walker and Hall, has just announced a 5% stake.

Just picked up on the Walker and Hall 5% on asx but it is not on nzx
they have been progressivly buying for quite a few months now at good levels, sure they are on to a winner the same as the NOG options they are sitting on.

Yes PPP has sat flat for a while now, and never really moved when the Tui info came out that was alligned with NOG.

Could this stock have a re rating to come.

Have not heard any more about the Tubridgi sale that was conditional

Many holders out there have opions on this stock