Austral Pacific Energy - APX

[CHEQUERS]

Can someone please enlighten me:

NZX last trade = 2.13 ( Buy 2.07 / sell 2.13)

US : Bid USD 1.76 (NZD 2.58) / Ask: USD 1.90 (NZD 2.79)
See http://quote.bloomberg.com/apps/quote?ticker=APXYF:US

Canada: Bid CAD 2.15 (NZD 2.48) / Ask: CAD 2.25 (NZD 2.59)

Shouldn't this stock trade at the same price on all markets? If this doesn't happen does this mean there are arbitrage opportunities here? This isn't just a "one - day" event - has been in this range for a few days now.
Presumably all shares on different exchanges rank equally? I think there are some restrictions on re-sale from the NZ IPO to US / Canadian citizens which may explain the difference? However would it not be possible for US / Canadaian citizens to buy in NZ via trusts / funds & likewise for NZ holders to sell in US at higher price to trusts / funds?

Any thoughts /comments / clarification welcome.

Cheers

[David Hardman]

I posted about this share when the capital raising opened in November but nobody showed much interest which was surprising. Didn't pick up any myself but have noticed that the head shares (APX) have already risen to $2.13 from the issue price and the warrants (APXWA) are at 40 cents which is an especially good return considering one warrant was given away for every 2 head shares bought.

But to answer your question CHEQUERS, the shares issued in the NZ capital raising (only 4,000,000 of them) cannot be traded in the US or Canada until 90 days after the issue date. Thus the discrepancy between the markets will continue until arbitrage opportunities are opened in about two and a half months time. Considering the company has about 7000 North American shareholders compared to NZ's 500 odd it is reasonable to assume that the N Americans are driving the share price and the Canadian and US share prices are actual value. It's possible to assume that the NZ value is wrongly priced - a fact that will be corrected once the arbitrage opportunities open. It will be interesting to see if anyone in the NZ market actually picks up on this anytime soon.

David

[CHEQUERS]

David,

Thanks - your comments seem to make good sense. It'll be interesting to see if & at what point the NZ / US / CND market differences iron themselves out.

Certainly looks like NZ is the odd one out in terms of current pricing.

Anyone else have any thoughts?

[Sid]

It looks to me the NZ listed warrants (APXWA) believe the US and Canada price more than the headshares (APX)do. The warrants give you the right to buy APX's at $2.10 (with)in 1 years time, so at $0.40 they are implying a forward APX price in the $2.40 to $2.50 range. (assuming no dividend, and not much time value). So my conclusion is the APXWA's look about right but the APX's are cheap.

Disc - hold from the IPO

[Sid]

NZX announcement follows (also refer to NGC announcement yesterday afternoon):

16 Jan, 2004, 11:28 GENERAL Kahili Gas Purchase Arrangements
Full Text of Announcement
Austral Pacific Energy Ltd. (formerly Indo-Pacific Energy Ltd.) today announced that final agreements have been executed for the sale of gas from the Kahili gas-condensate field in the onshore Taranaki Basin, New Zealand. The Kahili gas is expected to be available to the market by mid 2004.

Natural Gas Corporation (NGC) will buy all gas produced from the field, for which initial reserve estimates are in the 4 billion cubic feet range. Kahili was discovered in November 2002; and is operated by Austral Pacific Energy, which holds a total 45% interest in the permit.

Austral Pacific CEO Dr Dave Bennett said: "We are pleased to have achieved this further development, which will add value for shareholders in the company. The partnership with NGC is a good one and the synergies between us are excellent."

The field will be produced initially from the Kahili-1A/B well; which is expected to commence flow at 3-4 million cubic foot of gas and 120-150 barrels of condensate (light oil) a day.

The reserve estimates are likely to change either up or down after pressure tests following some months of production. At that time, consideration will also be given to drilling a second well and/or 'fraccing' Kahili-1A/B, to enhance production and revenues. 'Fraccing' is a process of hydraulically fracturing a reservoir formation to enhance flow rate of oil or gas from the well.

NGC will construct, own and operate a separation plant to process the raw well stream and install 12 km of pipelines to connect Kahili gas to the existing NGC pipeline infrastructure. Subject to receipt of the necessary planning consents construction of the facilities, at a cost of approximately NZ$8 million to NGC, will commence in February 2004.

"Finalising this agreement with NGC is an excellent start to Austral Pacific's upcoming drilling and production schedule," Dr Bennett said. "The deal proves that small onshore gas fields in Taranaki can be a commercially viable proposition for all parties involved and we look forward to the field commencing production."

In other news, additional downhole pressure data from Cheal-1was obtained in early January, following the extended production test late last year during which Cheal-1 production averaged 50 barrels of oil per day and 500,000 cubic feet of gas per day.

"Analysis indicates that this well is only accessing limited gas reserves from within a few hundred metres of the wellbore. Oil reserves cannot be estimated, despite steady oil production during the test. A means of selling or disposing the gas will now be sought in order to enable long term oil production to continue."

The Cheal structure is mapped as covering an area of up to eight km2 (2,000 acres) at this pay level, and Austral has decided to drill a third well from the Cheal wellsite, deviating to the north some 500m in order to test whether oil and gas pay extends across the structure.

"This well will also test the deeper Mt Messenger reservoir, in which oil was encountered in thin reservoir in Cheal-1, while a good Mt Messenger reservoir was encountered in Cheal-2. We are planning on drilling the Cheal-3 well in February," Dr Bennett said.

Following the change of the company's name to Austral Pacific Energy Ltd. at the start of 2004, the company's trading symbol on the OTCBB exchange in the United States has now been changed from INDOF to APXYF. The Company is now trading on the NZSX (APX), the TSXV (APX) and the OTCBB (APXYF). These three boards can all be accessed from the company's web site at
www.austral-pacific.com.

[Sid]

Interesting situation here given APX trade on 3 exchanges (refer to their website: http://www.austral-pacific.com./ ).

In summary using latest prices:

TSXV (Canada): CAD 2.65 (NZD equiv $3.05)
OTCBB (USA): USD 1.85 (NZD equiv $2.84)
NZX : NZD 2.28

From early May the shares issued in the NZ IPO will no longer have a Canadian resale restriction and should be able to be shunted to the TSXV for trading on that exchange.
So if you want an exposure to APX the NZX is the cheapest place to get them.

Discl. Hold from the NZ IPO

[CHEQUERS]

Agreed - this seems a crazy situation - US latest price is 2.25 (NZD 3.45) - a 40% premium to the NZ offer quote (2.44).

It appears that USA resale restriction was only for 40 days from issue date, therefore preumably US citizens can purchase on NZ market. 4 month resale restrition only seems to apply to Canada.

Can anyone advise why there is such a huge difference in prices betwen the various markets?

disc: Also hold from IPO

[Sid]

Continues to climb in the US (USD2.35 = NZD3.56) and Canada (CAD2.85 = NZD3.25).
Only 7 weeks till the Canadian resale restriction ends.

[Sid]

Another promising release from the company today (refer to NZX release). APX still trades mainly above NZD$3 on the 2 Nth American exchanges it is listed on, will be interesting to see if this announcement spurs it higher over there. Not long now before sale restriction ends (refer to earlier posts)

[CHEQUERS]

Today's announcement doesn't seem to have had much impact on the market price despite the very positive tone. Will be interesting to watch what happens over the next few days.

Resale restrictions to US / Canada end next week - should mean we either see a drop in US / Canada prices to NZ levels or an increase in NZ price to match overseas levels otherwise arb opportunities exist.

My understanding is that from 5 May stock can be "shunted" to Nth America exchanges where purchase / sale can then occur once stock is moved to US / Canada registry. This takes about 4 or 5 days.

[Sid]

Chequers, seems not many people are following this one. Another excellent announcement for APX today: "Austral Pacific and Genesis Power sign MoU to Drill Cardiff 2"

[Taijon]

I agree the company has made some excellent announcements and seems to be doing well. Problem is there are few sellers-people are holding onto their shares. If you look at the depth each day and the daily sales volumes these reflect a small level of selling interest.

I can buy 3 or 4 NOGs for 1 APX and at the moment and that seems a better way to go. However I'd be keen to here if anyone thinks differently. Why should I buy APX at the current price rather than NOG?

[CHEQUERS]

...Because if you can get APX at or around NZD 2.70, you've bough 'em 30% cheaper that the people in Canada and the US who just paid NZD 3.80 per share today!

Good luck

Chequers

[weasel]

Plenty of depth on the buy side. as for the sell side... thin. ;)

[CHEQUERS]

Up Up and away she goes.....up from 2.69 to 2.89 in NZ this morning. Looks like recent events are finally being noted by the NZ market.

More to come????

[bermuda]

This surge is due to the Cardiff announcement.It is not often that a Chief Executive comes out with such a strong statement as..."this has enormous potential for both companies"...the other company being Genesis.Have got a few but I think I will stick with NOG's 'Fairway to Heaven.'

[Sid]

For those that follow APX, Nth American NZD equivalent value from Friday nights trading is just above $4.

[CHEQUERS]

Consolidation at yesterday's record levels in US on big volume today. US volumes have been large relative to previous levels over past week or so.

NZ price still well below US levels.

Announcements re drilling programme seem to be coming thick and fastt now so hopefully some positive updates in the near future to send the NZ price further north.

Hard to value these things when so much is built on speculation of what might be aroyund the corner, but I'm holding for now!!!

Anyone have any views on when NZ / US price will move towards parity?
Why would these remain cheaper in NZ now resale clause has expired?

[Sid]

The warrants at $1.00 versus headshare at $3.07 looks better value to me, so I switched from heads to warrants this week. The price came back in North America on Tues and Weds, but stabilised on Thurs, after another positive announcement, at a NZD equiv of $3.60+. I would expect the price gap between NZ and Nth America to narrow further next week due to the end of the re-sale restriction.

The warrants can be exchanged for head shares with a further $2.10 to pay on 6 Jan 2005.

[etrader]

[quote]Originally posted by Sid

The warrants at $1.00 versus headshare at $3.07 looks better value to me, so I switched from heads to warrants this week. The price came back in North America on Tues and Weds, but stabilised on Thurs, after another positive announcement, at a NZD equiv of $3.60+. I would expect the price gap between NZ and Nth America to narrow further next week due to the end of the re-sale restriction.

Sid are you still holding onto warrants if so you made good profit this year, just bought into this stock this week and see today the drill is heading to required levels soon.

The stock up .35c today.

Anyone out there following this stock looking at a similar story to NOG.

[Sid]

Hi Etrader,

I've had a good run out of the warrants but did sell about a month ago and went into Independence Group (IGO) on the ASX.

APX still looks an interesting story.

[etrader]

A share with low volume is posting some good results from drilling
have followed for a while, seem to have some good prospects.


The Cheal-A4 well (Austral 36.5%, operator) has now reached its Target Depthof 1856m (6090 feet), and the well is presently being prepared for electriclogging, which is due to commence on Tuesday, November 2. Clear indicationsof oil pay, consistent with prognosis, were observed during drilling at boththe Urenui and the Mt Messenger pay levels. The significance of theseindications awaits the results of electric logging. After completion ofelectric logging, the well will be cased and completed for productiontesting. This is expected to commence next week. The Cardiff-2 well (Austral 25.1% carried, operator) is drilling ahead in 16"hole at a depth of 1179m (3868 feet) and is expected to reach its next casingpoint later this week. The Hihi-1 well (Austral 25%) is presently settingcasing at 451m (1480 feet) prior to drilling ahead

[Mungo]

Can someone please enlighten me....

When they dropped the sleeve in the hole...at Christmas, was it just bad luck?
Put it down to...the high risks associated within the oil industry?
Or was there a "gumby wumby" driving the rig that day.

Yeah yeah, 4 Ks down, 8.5 inch hole, I know the physics.
Does this happen often?

Discl: I brought warrants at 33 cents and have converted to head shares.
Prediction: When Cardiff 2? flow test results are released, the shares will increase (step) $2.

[bbob]

Reasonable to bring APX up for review again.
-Digging holes in PNG (Papua New Guinea License PPL 235 - Douglas-1) - supposedly roughly 1 in 3 chance of hitting hydrocarbon with potential 135mmbo (or absolutely nothing!)
-Attempting not to drop sleaves down Cardiff again and Cardiff-2A ST1 PEP 38738 Deep Rights (Austral 25.1%) pressure build-up of the McKee sands portion underway. Rem Sproule estimates a 50% probability of gross Gas (Condensate) in Place as 215 BCF ( 12.8 million barrels) and a 10% probability of 341 BCF (21.5 million barrels).
-Cheal: Grey hairs supplanted by white as further development of the "cash cow" is awaited ? to potential of 1500-2000 bpd.
Cheers
Bbob
Disclosure hold APX, OPL, NOG

[Toddy]

APX is bullish on Douglas.

APX
25/07/2006
MINE

REL: 1003 HRS Austral Pacific Energy Ltd

MINE: APX: Commercialising Douglas Gas Discovery to be Evaluated

Wellington, New Zealand - 25th July 2006 Austral Pacific Energy Ltd. (TSX-V
and NZSX: APX; AMEX: AEN)

PRESS RELEASE

Options for Commercialising Douglas Gas Discovery to be Evaluated

Austral Pacific Energy Ltd (Austral Pacific) announced today that the PPL 235
joint venture is about to embark on studies designed to evaluate the options
for commercialising its Douglas gas discovery in Papua New Guinea. Austral
Pacific has a 35% interest in PPL 235, the other joint venture participant
being Rift Oil PLC (65%).

The Douglas-1 well reached a target depth of 1978 metres on 26th May 2006.
The drilling and wireline logging results have now been fully evaluated and
the conclusion drawn by the joint venture's technical committee is that the
Douglas well appears to be an exciting gas discovery with a significant gas
resource of potentially several hundred billion cubic feet contained in a
large structure with a maximum area of over 40 square kilometres. The
discovery is also expected to serve to lower the exploration risk for other
identified prospects and leads in the licence. It is the joint venture's
current intention to proceed with a detailed feasibility study to determine a
commercialisation strategy for this resource.

The excellent results obtained from the drilling record, wireline logs and in
particular from the Multi-Formation Tester, indicate that there are two
reservoirs (Alene and Toro) of sweet gas with good deliverability and likely
moderate condensate content. The joint venture had initially considered
conducting flow testing on the Douglas-1 well but given the logs and MFT as
well as the knowledge obtained from data from nearby wells, the joint venture
believes it has a sound understanding of the envelope within which the
formation and fluid properties lie such that incurring the costs of flow
testing would not be warranted at this time.

The joint venture is also planning to acquire additional seismic in the
licence in order to determine the extent of the Douglas resource, to define
appraisal well locations on the Douglas structure and to define exploration
drilling locations on other prospects. The joint venture is planning to bring
forward to the 4th quarter of 2006 its commitment to acquire and process 50
kilometres of new 2D seismic. The new seismic data, when integrated with the
existing data base, will elevate the joint venture's understanding of the
prospectivity of the licence and will be critical in determining the best
locations for future drilling and enable the joint venture to maximise the
return on its investment.

In making the announcement Austral Pacific's Chief Executive Officer Rick
Webber said "The goal for our company is to create shareholder wealth by
establishing and growing a low cost, sustainable oil and gas production
profile. The discovery of gas at Douglas, the initiation of studies to look
at the options for commercialising the resource, and the acquisition of
further seismic in the Douglas licence to help us understand the extent of
the resource and the prospectivity in the licence area are key steps along
the path to that goal."

Clarification

At its recent Annual General Meeting, the Company stated that merger and
acquisition activity would be a potential component in its growth strategy
and since the meeting the Company has noted the existence of rumours of an
impending transaction involving the Company. The Company confirms that while
M&A activity remains part of its corporate development strategy, it is not
currently in any merger discussions with any party.

[Paper Tiger]

Cheal Oil Field Development Gets Green Light (http://stocknessmonster.com/news-item?S=APX&E=NZSE&N=134532)
300bpd at present from temporary facilities and expecting 1000 ramping to 1900 over the first half of next year.
In addition a step forward with the Cardiff gas discovery.

Perhaps the share price will stop falling now.

Disc: hold IFT which has 10%(ish) of APX

[troyvdh]

PT..good point.In fact I e-mailed folk at the comapny after the Press (?) did a full page splurge on this high-powered oil joker who is currently the boss......................and asked how many (in the office) owned any shares...also if this joker did......turned out ....me thinks that no one owns any...and the boss has been given options...dont quote me on this ....bit of a concern really....most shares are held in the states.....and appearently they enjoy hearing good stuff coming out all the time...that till now has not been happening.....its my understanding that these blokes know there stuff and are around for the long haul....

[Toddy]

The SP is having a good day offshore.

AUSTRAL PACIFIC ENE (AMEX:AEN) Delayed quote data

Last Trade: 1.80
Trade Time: 3:49PM ET
Change: 0.45 (33.33%)
Prev Close: 1.35
Open: 1.40
Bid: N/A
Ask: N/A
1y Target Est: N/A

Day's Range: 1.40 - 1.80
52wk Range: 1.10 - 3.10
Volume: 156,500

[troyvdh]

Its having a great day on shore.....17% up

[troyvdh]

...mmm...me thinks that things are happening here...problem being that most folk interested are abroad...there has been some buying from one source recently apparently...

disc...hold 10000...

am I the only one ?

[CJ]

quote:Originally posted by troyvdh
am I the only one ?
Is this the share that Infratil bought into as well?? and have someone on the board??

[zigzag]

Troyvdh. I have some to (8000) so that makes two of us. CJ Infratil has somewhere around 10% and David Newman from IFT is Chairman.

[living2]

I have heaps too.Looks like the short sellers in aen have now got the oil plug right up their a-----es

[COLIN]

Looks like the Infratil boys have given the CEO his marching orders, and David Newman is taking direct control. Should be some action now.
(Just wait a bit until I have filled my buy order, please!)

[troyvdh]

Infratil have been puting more dosh in....at about $2 each....now yp till 19%...perhaps these blokes drink at the same bar in Wellington.

[COLIN]

quote:Originally posted by troyvdh

Infratil have been puting more dosh in....at about $2 each....now yp till 19%

Yes, encouraging to see. I am sure that this is a carefully-calculated move by IFT. I will be putting on my watch list.

[troyvdh]

No news...low price...little volume...I am nibbling away...gee is this an opportunity or not...I wonder what the good folk at Infratil are thinking...

[troyvdh]

Yesterdays volume was out of the blue..like more than any day for a year.....

Phaedrus can one draw any conclusions ?

Like ABA MET NZO SMM PPP and a few others I have been bottom feeding this stock for a while...I know I shouldnt and its unwise but I cant help myself..

[peterb]

having upped their stake in Cardiff to 44.9%, Austral must really believe in this field. I think this is probably a good sign, although they didn't say in the announcement how much they paid for it.

[Toddy]

No news...low price...little volume...I am nibbling away...gee is this an opportunity or not...I wonder what the good folk at Infratil are thinking...

I attended the IFT agm on Monday. Lloyd Morrison was asked a few sticky questions about APX. He started off his reply with 'sometimes we make mistakes and get it wrong'. He carried on to say that the APX management had not performed and that hopefully the changes to management that were made earlier this year will deliver better results.

IFT are trying to learn more about the NZ oil and gas market and thought that APX was the way to do this. I for one would have liked them to go through this exericse with a more exciting company like NZO. They have not given up, but one has the feeling that if APX does not deliver sooner rather than later IFT will write off their investment (they have already written off $7mil odd I think) and walk away.

[peterb]

what percentage of APX do they hold? I don't think they could (or could have) find out much about the gas market by getting into NZO for a number of reasons: Infratil is into infrastructure and utilities, and in NZ oil production, especially offshore, doesn't neatly fit into this category. Having said this Austral's best asset Cheal is mainly an oil field, with some associated gas. NZO is involved in some big projects, but is only a minor stakeholder, and thus by buying in (considering the size of NZO) would have little influence. Also other utility companies already have a stranglehold on Kupe. Austral's big stakes in Cardiff and Kahili on the other hand mean that theres a potentially significant role Infratil would have in marketing the gas if they so wished to. While APX has disappointed people recently, I think the worst has come and the stock seems stable/recovring. The significant Cheal revenue should underpin this.

Disc. hold none but thinking abou it

[troyvdh]

I have just rung APX in Wellington to speak to someone-possibly MR Jewell who will be in after lunch.
I have contacted them before to sound them out.
I have in the past questioned if any staff etc have shares in APX and i believe they dont.Not sure about the boss-as yet.
It may prove a waste of time...I am just keen to get a sounding...specially after comments from Mr Morrison.

It may be old fashioned but to me if youve got your own dosh involved it means something.

[peterb]

Troy are you a shareholder? What was your average purchase price?

[troyvdh]

Given my previous posts (where I have said I held 10000)....yep am a holder....now 15000...as for average price.....its a wee bit north to what they are now...in fact I try hard not to look.....

[peterb]

I wouldn't be worried if I were you. Once they have their Cheal revenue pumping they will have the balls to sink some money into the mammoth douglas gas discovery as I understand it. Also what is your opinion of Cardiff and Kahili?

[peterb]

APX falls 35c - 17% on indifferent news... Their market cap is now only $51 million. They have net 2P reserves of 2.9mm BOE, so purely based on their 2P reserves the market rates APX $17NZD/BOE for reserves from an essentially completed oil and gas project with sales contracts and supply chain. That alone seems a bit cheap, but doesn't take into account their significant other assets: most importantly the douglas gas discovery in PNG. Consider the non-binding memorandum of understanding the Douglas JV signed with Alcan for 20 years supply of 40BCF per annum and you get some idea of the potential of this project: Austral has 35% stake in this. Does anyone else see the potential for this stock? I know there have been some management problems and delays, but it seems about ready to bring in the reddies and the market responds (though on very low volume) with punishment: nonetheless why would people sell at such a reduction to 20 day weighted average/ other indicators which shows a clear uptrend.

Disc. hold none, seriously keen, know people who do. DYOR

[troyvdh]

..peterb ..you sound like someone who knows what they are talking about.Me I tend to look at the big picture and then make a judgement call.This system over the past 30 yrs has seen me do alright.I tend to accumulate over the long haul on a good story.In the past I have done the same on MET SMM NOG PFI ABA CUE BHP CEN and a few res rentals.....APX.
I read and appreciate you boffins putting your bit in.

(I also liked and lost reasonably well on the RJI story...a lesson well learnt)

I like the APX story...the oil story...reasonably regular dollops of reasonably serious money.And if someone of Mr Morrison's calibre can be convinced to throw a few mill (twice ?)at APX then thats usually good enough for me.

Its my view that it takes all kinds when it comes to the SM....stock picking....making judgement calls... good ones...its afunny game....I ve meet some seriously bright cookies over time...gee they make some really goofy costly calls...

....why do people sell at 20 % discount ?...fear, fear of loss..the unknown...ususally irrational I know..thats what makes the "market" I suppose.

Me I am hanging in (it wasnt me !!!!)....I bought some at 1.70....today.

I spoke yesterday to the new Chief Financial Officer to get a feel....thats all about you can do.I asked stupid questions like does enjoy going to work...with a spring in his step perhaps ?
How many shares does he own..other staff as well.He had none currently...........
Re Mr Jewell....he has options (given to him it would appear).I was (as expected) directed to the last financial report.
He did however made mention of the fact that moving to APX was NOT a decision made lightly (given his previous appointments in the oil industry).

It would appear that a thorough clean out of management has occured...another 10 mill has arrived......

Like I said Im saying in ....waiting for it to track up to its previous 4.80 and beyond!

[peterb]

Thanks troy, but I wouldn't claim to know that much about the subject, but I'm having a good time learning. I like the big picture too, and thats the thing about Austral to me: its going to have a steady little production base which will keep it chugging along while at the same time its got the exciting potential of all the other pies its got its fingers into. Some of them mightn't come through, but I believe some of them will. I just need to get my hands on some cash- 19y.o. student you see, like my other investments.

[PLK]

is apx going to declare bankruptcy Jan next year?
anyone has any though?