NZ Oil & Gas (NZO)

[fish]

Hi, Fish. I am curious about that. Honestly, not many people would invest in shares purely for the sake of dividends. Have you or anyone you know went through such investigation? How do IRD expect us to justify that we weren't investing for the capital gain?

I understand they use a number of criteria-which include frequency of trading .
After reading about it today I decided I didnt want to inadvertently get taxed on all the nzo gains I will be making since I bought a large amount of rights about a year ago .
Hence I will not be buying or selling anymore this year .

I am not sure of the ird intentions-from todays news it doesnt sound good .

In my business I do get lots of riduculous claims from the ird-for instance today they wanted me to pay gst plus penalty tax for a gst payment I had already paid but they couldnt find-required bank statements and signed statements from me before they would believe it ,
Seems you are guilty until you can prove innocence .

[fish]

I think IRD are "targeting" on-line trading, which i take to mean the likes of trade-me, etc. This is not the same as share trading on-line as I doubt that it matters "how" one buys or sell their shares ("on-line" or via a broker) in determining whether or not one is a share trader.

Thats a relief-thanks !

But I guess a high net worth individual who buys and sells shares with the intention of making a profit could be investigated and deemed a trader

[friedegg]

Thats a relief-thanks !

But I guess a high net worth individual who buys and sells shares with the intention of making a profit could be investigated and deemed a trader

they used to let you buy/sell 7 cars a year until you needed to be a registered mvdi dealer(although i never remember anyone procecuted over this)and until ird come up with some strict guidelines ill take this approach

[manxman]

Hi, Fish. I am curious about that. Honestly, not many people would invest in shares purely for the sake of dividends. Have you or anyone you know went through such investigation? How do IRD expect us to justify that we weren't investing for the capital gain?

I am not a lawyer but......... You are allowed to invest for capital gain. Its good for the country FFS. What IRD are on about is people who convert all their taxable income into non taxable capital gains.

Example....... In 2003 I invested in NZR. NZR spent all their retained (tax paid) profits and then some on the "Future Fuels" project. They scored a major hit because they commissioned the new plant right into a regional shortage of clean diesel. They made a bomb and the share price appreciated.

Question...... How much of the appreciation of the share price was due to the reinvestment of tax-paid profits, which is in no way "capital gain" and how much was due to the foresight of the management, the vagaries of the market and a major refinery in Australia dropping the ball on a similar project thus causing the regional diesel shortage.

I don't think that the IRD really wants to go there.

If you buy shares, you are allowed to have an exit strategy. For instance I would not normally buy a share where the PE was greater than 10 because of my financing costs. I would have my finger on the sell button if the PE(based on my idea of the next year's earnings) got too exited. Stagging new issues and other short term strategies are clearly taxable but even there the IRD has not announced enforcement on a triumphal scale. It might really help genuine investors if they did, but the market seems to need stags to get new issues away. Is this a legitimate need? Conventional economists would hold that stags are expected, and therefore are stabilizing influences on the market, and help capital raising.

If you buy anything with the intention of selling it at a profit, then that is taxable. Buying shares with the intention of holding them should not in our present regime, give rise to a tax liability. If you then see the shares going pear shaped, you can get out without tax obligations. There is no lemming law which compells you hold them over the cliff.

On the other hand, has anyone thought of deducting their capital losses? A good way to really attract attention.

[digger]

I understand they use a number of criteria-which include frequency of trading .
After reading about it today I decided I didnt want to inadvertently get taxed on all the nzo gains I will be making since I bought a large amount of rights about a year ago .
Hence I will not be buying or selling anymore this year .

I am not sure of the ird intentions-from todays news it doesnt sound good .

In my business I do get lots of riduculous claims from the ird-for instance today they wanted me to pay gst plus penalty tax for a gst payment I had already paid but they couldnt find-required bank statements and signed statements from me before they would believe it ,
Seems you are guilty until you can prove innocence .

Fish ,starting in 1984 i was a trader but after 11 years gradually moved over to buy and hold. I discovered i was not smart enough to beat the market and good growth stocks that you hold for eventual dividends was the way to go.Note that while i discovered i was not smart enough to beat the market,i was smart enought to discover that.Many poster have yet to come to grips with that fact
Since 1962 all my yearly accounts are done through an accountant so records are always available. Your comments re a GST non payment that was paid says you did not have an accountant to supply this info. Over the years i have run into similiar problems but the accountant always sorts it out.Since 1997 virtually never sell shares and will live very well on future dividends,all which will show on the books.
The entire tax system needs looking at and has for many years.The non taxing of capital gains on land or building held for less than three [or 5 ] years is a killer to the working weekly tax payer.The taxing of young cattle reared on a farm and not yet sold is another killer compared to a quick turn over of property where all profits are pocketed.In Aus oil and gas has to have a tax provision if the reserve is increased,as i understand it so you can be sure the reserve is not increased until necessary.Another stupid tax law. The system is outdated and needs to be seen to be more fair on all types of income. AMEN

[COLIN]

I am surprised that anyone is worried about being suddenly classed as a share trader by the IRD in respect of the year ended 31/3/09! Would you not welcome the opportunity to offset the year's losses against other taxable income? Maybe there are some rare individuals out there who actually made capital gains in their portfolio but they would be very rare indeed. I certainly didn't. But, of course, if you tell the IRD you want them to commence classing you as a share trader for the year just past, you will then be faced with an ongoing interest in your trading activities for the future - they could prove hard to get out of your hair.
Just a point by the way, that some may not be fully aware of: Any gains on sales/maturity of bonds, etc., (as opposed to equities) are taxable in the year of disposal/maturity, irrespective of whether they were bought with the intention of making a profit or not. They are classed as "financial arrangements".
Taxation discussions, of course, should take place in the appropriate forum.

[boysy]

New Zealand Oil & Gas Ltd (NZOG) has been advised by the Operator of the Kupe project,
Origin Energy, of an update to the project schedule.

Origin Energy has advised that the first raw gas from the Kupe field, which lies off the
coast of south Taranaki, will be brought ashore in the fourth quarter of calendar year
2009. This will effectively signal the commencement of production.

Origin’s Executive General Manager, Major Development Projects, Andrew Stock said
“Construction of the offshore facilities wells, wellhead platform, pipeline and controls
umbilical is complete, and the overall project including the Production Station near
Hawera is nearing completion, with testing and pre-commissioning occurring later than
planned.

“Capital costs for the Kupe project remain in line with previous expectations.”

Some of the facilities are already active as part of the current pre-commissioning and
the balance of facilities will be progressively readied and commissioned over the coming
months.

NZOG Chief Executive David Salisbury said “We had previously presumed three calendar
quarters of Kupe production in the 2009/10 financial year. Although production rates
during commissioning are difficult to predict, it is now likely that production during
the December Quarter will be reduced.”

Production forecasts for later years are not affected. Over the next 15 to 20 years Kupe
will make a significant contribution towards meeting New Zealand’s gas supply needs,
providing an estimated 254 petajoules of natural gas, as well as 1.1 million tonnes of
LPG and 14.7 million barrels of condensate.

It is expected that Kupe will meet approximately 15 per cent of New Zealand’s current
annual gas demand and 50 per cent of New Zealand’s LPG demand.

ENDS
Participants in the Kupe Project are:
Origin Energy Limited (through its subsidiary Origin
Energy Resources (Kupe) Limited) 50% (Operator)
Genesis Energy (through wholly owned subsidiaries) 31%
New Zealand Oil & Gas Limited (through wholly owned subsidiaries) 15%
Mitsui E&P Australia Pty Ltd 4%

[digger]

Teething troubles. Thank god for the delays so far,it would have been a bast--ard if Kupe had been up and running from last july just in time for the big fall in value. So the small delay has some advantage.

[Xerof]

Does anyone know if the long term supply agreements in place with Genesis and Vector are at a fixed price? If not, how is price determined?

Clearly condensate will be sold on the spot market

[blockhead]

An interesting ann, suggests there has been some delay but doesn't explain what or why, just we were "presuming" production for 3 quarters (09 - 10 year) but now production in the Dec quarter is "likely" to be reduced.

Leaves me pondering as to what actually is happening