NZ Oil & Gas (NZO)

[Casa del Energia]

You've been reading Mary Holm too much. No 5 is straight out of her thinking. Everyone on this thread intends to beat the market.
(sic)
My house is insured. It was insured before I looked at the sharemarket. Did that make me overweight in fires?

Mmm. My comments of the other day have opened up a hornets nest of debate. This is a very good thing, actually.
A lot of good points have been made and none are invalid:- Becuase - yes, personal
investment in equities is just that - personal; and therefore there are a phalanx of valid apporaches.
The old hands who have been investing in the bourses since Adam was a cowboy will not appreciate being told how to suck eggs - and I appologise for any impression of that - but not an intention. Just being devil's advocate.

Anyway - a confession: one of my reasons for 'rule breaking' (apart from the glaring fact that NZO is underpriced)
by holding NZO was that it is a fun share to own - pure an simple. It is just gangs of joy to hear about this or that progress report etc etc. And the reason I have never invested in any banking
scrip whatsever is becuase banking just is not that sexy. It is dull.

So what if the oil/gas fields go belly up and I loose 1/5th of my equity becuase I didn't obey 'the rules' - who cares!

"There are no pockets in a shroud" - but I had a blast going broke.

(By the way - I spent 40 mins transporting my daughter to netball - a four mile journey but the traffic was as thick as pea soup. Gas hit $2.12 this week (Yuss! - I own oil shares) - so how come the traffic has become more dense? - - it just don't figure - riddle me that, Batman).

[digger]

2. Never deliberately overweight your portfolio[

[I]....I guess it is to reinforce my statement that being overweigh in PRC is not breaking any rules in my personalised investment Stategy at this moment in time, so I have no problem...

...perhaps if the NZOOD causes the breaking of rules in your strategy.. rectify the problem.[/QUOTE]

Remember Warren Buffett's first rule is that diverssation is for those who do not know what they are doing. The proof is in investing in PRC

[airedale]

Hi Digger, one of those other Wall st gurus used the term "diworsifcation" meaning to make things worse by diversifying.

[macduffy]

Remember Warren Buffett's first rule is that diverssation is for those who do not know what they are doing. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ so right digger; that sums up 99%of brokers:):)

That works for Warren Buffett.
We should be careful not to think that we are all Warren Buffetts!

;)

[Wilkins_Micawber]

Mate, it must cost you over $200 to fill up the tank. I used to have a Range Rover. Nice SUV and I love the 8 cylinder grunt, but once it hits a certain age, things start to fall apart and the repair cost is huge. I prefer to buy a maintenance and hassle free new vehicle to drive around.

Yeah, not cheap to fill, but I am spreading my running costs over the year and taking less hit when I sell - so I can see the cost rather than it being hidden. But it's each to his own, just like investing (as just said on this NZO topic) - and there is smart investing as well (just like the 3 year warranty I took out when I bought the Range Rover) so maintenance doesn't cost me that much either :), just a small excess which would be less than getting the same repairs on a Toyota.

[zorba]

Hi Digger, one of those other Wall st gurus used the term "diworsifcation" meaning to make things worse by diversifying.

Great post,

And how about the effects of "divorsification" on your investment fund !!??

This can do be very bad for your assets ...... been there done that.

And once bitten twice shy --- always have an opt out contract handy !!!!

Z

[Dr_Who]

there are people on this thread who recomend to borrow to purchase shares------------they allso should remember they are not warren buffetts

OPES PRIME!

[Nitaa]

Going back into 5 years of history.(Feb 2003).

Taranaki Tension Builds For NZOG

Ocean Bounty starts 'interesting year' for NZOG as it drills Tui-1 exploration well.

The semi-submersible Ocean Bounty rig has started an "interesting 12 months" for New Zealand Oil and Gas (NZOG) as it drills the Tui-1 oil prospect (PEP 38460), with possible reservoirs of up to 1.1 Bbbbl, in the offshore Taranaki field.

The Tui-1 exploration well is the first of up to five wells being drilled, or about to be drilled, in permit areas that NZOG holds equity in this year, as part of its $NZ3.5 MM exploration programme. The other wells are Tabla-1, which is being flow tested, Tuihu-1, which will be deepened after being drilled previously by Fletcher Challenge Energy, and possible green lights for Ray-1 and Mangatoa-1, depending on the outcome of data analyses.

NZOG Chairman, Tony Radford, speaking at the company's annual general meeting late last year, said the company would be embarking on a: "range of exploration opportunities that will be put to the test in the coming year. It will be an interesting 12 months."

NZOG has interests in 10% of the Taranaki Basin, totalling 2.3 MM acres, through four offshore and five onshore permits. "Several significant prospects have emerged within our licences as a result of work our explorationists have done over the past year", Radford said. "For example, the newly acquired permit PEP 38478 provides the company with full coverage over the very substantial Mangatoa gas prospect. "Other new prospects relate to younger Miocene-Pliocene sediments within areas we hold under permit between the Kupe-Kapuni and Maui-Maari fields."

NZOG Exploration Manager, Eric Matthews, said drilling at Tui-1 (PEP 38460), which started at the end of January, was expected to take 24 days to reach a total depth of 4000 m. "The Tui prospect's main target is the Kapuni 'D' beach sands at approximately 3,400 m depth. "Other objectives are the 'F' sands and the shallower Moki Formation. The Eocene Kapuni 'D' sands have a cumulative potential of 700 MMbbl, the Miocene Moki 'A' sands 400 MMbbl, and the deeper Kapuni 'F' sands 50 MMbbl." The Kapuni Group beach system is the most prolific hydrocarbon reservoir fairway in the Taranaki Basin and provides reservoir in the Maui and Pohokura fields.

The Tabla-1 well (PMP 38148) was drilled to a depth of 1600 m in December before it was cased for flow testing that is scheduled for early February. Matthews said wireline logs indicated a 10 m gross hydrocarbon-bearing interval below 1419 m within the Mt Messenger Formation. He said flow testing was required to confirm the hydrocarbon type and producibility of the interval.

The Tuihu (PEP 38718) gas prospect is NZOG's most recent investment, after it bought into the prospect in November, operated by Swift Energy. Matthews said it will be deepened this year with a good chance of early production. The drilling will target the Tariki Formation which has an estimated potential of about 50 Bcf, and the Kapuni Formation with potential of another 50 Bcf. The well was originally drilled in 2001 by the previous operator, Fletcher Challenge Energy. Matthews said the new joint venture is looking at drilling through 4500 m, targeting Kapuni and Tariki sands, after the previous drilling programme's exploration budget expired at this depth.

NZOG's other possible exploration targets, Ray (PEP 38472) and Mangatoa (PEP 38478) are creating some excitement at head office, particularly Ray. Ray is a lead picked up in the south eastern sector of PEP 38472 as part of another lead called Gamma. "The Gamma lead has multiple zones of potential, through stacking of postulated Miocene turbidites sands between 1200 and 2500 m across a regional-scale anticlinal nose", Matthews said. "Currently, this area is being mapped at several levels and the character of associated seismic amplitudes is being compared with that known to be associated with hydrocarbon-charged sands of this type."

Chairman Radford said Ray had revealed "a tantalising possibility of containing a very large oil field." "What excites us about Ray is the potential to drill an oil target of massive size, once closer definition has been achieved with new seismic, which will be obtained early in 2003." Matthews said a 400 km seismic survey in PEP 38472 has started. "At this stage, Ray is the prime lead. It is a large stratigraphic feature which could contain some 500 MMbbl", he said. Drilling could occur in late 2003 /2004, depending on the results of the new data.

Seismic reprocessing in the northwest sector of the permit, over the Manuka lead, has also been carried out, with more than 2000 km reprocessed, showing a marked improvement in data quality. "This has resulted in improved definition of both structural and stratigraphic features", Matthews said. "Manuka is in an area of extensive faulting northeast of Maui and has demonstrated strong seismic amplitude changes of the type often related to the presence of oil and gas at relatively shallow depths."

NZOG's final exploration drilling prospect for 2003 could be Mangatoa in PEP 38478 which is a large sub-thrust play at Cretaceous level, extending into NZOG's PEP 38729. "The structure is a north-south elongate feature, sealed updip by the Jurassic and Triassic rocks of the overthrust", Matthews said. "The primary target is the Cretaceous Taniwha Formation."

A previous well in PEP 38478, called Te Ranga-1, was drilled in 1986 by Shell BP Todd. "It intersected about 140 m of predominantly sandy Taniwha Formation in the northern (offshore) part of the structure, at a depth of approximately 3,750 m", Matthews said. "Significant gas shows were recorded, but the reservoir was not flow tested. "NZOG's analysis of the Te Ranga log and core data indicates an average porosity of 13% and permeability of 0.5 mD. "Given such parameters, these sands may be capable of flowing at a daily rate of 3 MMcf, from a single well."

Matthews said mid-case potential for Mangatoa-1 was estimated at 1.7 Tcf of gas (within a range of 0.5 to 5 Tcf) with 119 MMbbl (20 - 500 MMbbl) of associated condensate. "As the Te Ranga-1 well did not drill to the base of the Taniwha sands, the total thickness of hydrocarbon-bearing sands may be greater, and consequently could increase potential reserves and production rates", he said. NZOG has almost finished reprocessing the existing seismic data and is about to update delineation of the structure, integrating data obtained from the Opito-1 well (PEP 38729).

The Opito-1 exploration well was drilled during May - July 2002 to a total depth of 3031 m and was plugged and suspended after encountering minor oil shows in the Kapuni 'C' sands. NZOG holds 75% of the permit. "It appears that the well drilled the southeastern flank of the Opito prospect and may be off the petroleum migration pathway", Matthews said. "As substantial untested potential may lie updip of Opito-1, the well was suspended to enable a deviated well to be drilled from the bore hole to the north, if current technical studies confirm this potential."

Another well drilled early last year, the Makino-1 (PEP 38728), encountered Tariki sands. "While the oil shows within the deeper Kapuni-equivalent sands were encouraging, results did not justify flow testing", Matthews said. "The shallower main objective of the well, the Tariki sands, were not intersected because the thickness of the overthrust Murihiku was greater than expected, placing the truncation of the Tariki sands to the west of the well bore. He said the Makino-1 well will be sidetracked later this year, or early next year, to the Tariki sands further to the west, after the post-well re-evaluation of seismic data was completed.

In August 2002, NZOG was awarded two new onshore permits, PEP 38754 and PEP 38755, which it applied for under the competitive bidding system. Reprocessing of existing seismic data over the permit areas, which is currently underway, should determine whether the permits have prospective features similar to those in the adjacent offshore PEP 38472.

While NZOG is keeping busy on the exploration front, it also trying to increase production from its Ngatoro field in PMP 38148 which is the company's core earnings base, having already produced 3.5 MMbbl since 1992. Daily production was 660 bbl of oil and 2.4 MMcf of gas at December 2002.

NZOG is keen to maintain production rates and is trying to get approval from its joint venturer, Greymouth Petroleum, and the New Zealand Government, to carry out a water injection programme. The water injection proposal follows a fracture stimulation exercise of the productive formation in the Ngatoro-1 well last year, which increased flow rates to help offset natural decline from the field.

But the two companies have yet to agree on the water injection programme and, accordingly, NZOG has triggered an independent expert process to adjudicate on how best to proceed with the water injection proposal. Chairman Radford said NZOG wants to start work on the water injection programme "immediately". "We hope the differences between NZOG and its co-venturer, Greymouth Petroleum, on how to maintain pressure support at the maturing Ngatoro field are resolved soon", Radford said. "NZOG believes that an additional 1.8 MMbbl may be recovered through injecting water into the reservoir."

Matthews said the Ngatoro field's estimated life span under natural decline was 10 years, but could be pushed out a further 5 - 10 years by using pressure support, which will cost NZOG about $NZ 1 MM to implement. "The configuration of the pressure maintenance programme continues to be discussed with the joint venture, with an expectation that the programme will commence within the next six months", he said.

NZOG is looking at developing the Kupe field, one of the two significant undeveloped gas fields in New Zealand, following changes in the domestic gas market due to the shorter than expected life span of the Maui field. NZOG increased its equity in the Kupe field (PML 38148) to 19% last March in anticipation that the field, first discovered by the company back in 1986, with assessed reserves of 260 PJ of gas, 16 MMbbl of oil and 300,000 t of LPG, could become competitive. NZOG Finance Manager, Gordon Ward, said there was additional potential in prospects such as Stent and Marshall to the south, which could be linked into the development.

"Recent indications of early depletion of Maui gas reserves mean that a rapid increase in demand for other sources of gas, such as Kupe, along with higher gas prices, could be imminent", Ward said. Kupe is owned 70% by Genesis Power, the NZ Government 11%, with NZOG holding 19%. "Genesis (a state-owned company) is New Zealand's largest electricity and gas retailer and has stated its wish to see the Kupe gas/oil field onstream by 2006", Ward said.

Pre-requisites to development of Kupe include front end engineering studies to confirm the preferred development concept, access to the Maui pipeline for gas transport, and a gas sales contract to take in the order of 20 PJ pa from the field. The initial development at Kupe would occur within the central area of the field (CFA) where three wells have already confirmed reserves.

"NZOG supports the concept of a low cost development using a basic offshore production facility and a single pipeline to transport oil and gas streams to shore", Ward said. Once CFA production is underway, NZOG expects prospects such as Stent and Marshall to the south, will be drilled. "These prospects exhibit direct hydrocarbon indications, similar to those over Kupe, and potentially could double or treble reserves", he said. Gas marketing discussions are in progress and are expected to take several months to conclude. "It is well known to potential purchasers of substantial new gas (supplies such as Kupe or Pohokura) that prices will need to increase substantially above the current price of about $NZ3.50/GJ", Ward said.

Although NZOG is an oil and gas company, it also has an involvement in a coal mining project at the Pike River Coalfield, in the Westland province of New Zealand's South Island, through a 72% interest in the Pike River Coal Company Ltd (PRCC). The mine has been estimated to contain recoverable reserves of 15.5 MMt of coking coal, with a potential value of between $NZ 70 - 110 MM, after tax (discount of 8%) and factoring in other variables including coal prices and exchanges. But there is a catch. The mine can only be accessed through 9 ha of land controlled by the Department of Conservation (DoC).

PRCC is in the process of gaining resource consent and access approval, which has included submitting an updated assessment of the environmental effects and safeguards to the DoC. PRCC still has to carry out a corehole drilling programme and groundwater modelling to assess the potential for acid mine drainage to affect water quality, before the Conservation Minister makes a final decision on whether the project will proceed.

"While PRCC considers this to be a remote risk, it will undertake this work programme over the next two months", Ward said "The minister has advised that once this work is done, all information for him to make a decision on access will be on hand and a decision will be made promptly." PRCC must also organise construction contracts, transport arrangements and financing prior to the development proceeding.

[manxman]

Hi Digger, one of those other Wall st gurus used the term "diworsifcation" meaning to make things worse by diversifying.

That guru was Peter Lynch, of Magellan Funds, who gives a truckload of advice on how (and why) the private investor can beat the institutions most of the time.


Anyway - a confession: one of my reasons for 'rule breaking' (apart from the glaring fact that NZO is underpriced)
by holding NZO was that it is a fun share to own - pure an simple. It is just gangs of joy to hear about this or that progress report etc etc. And the reason I have never invested in any banking
scrip whatsever is becuase banking just is not that sexy. It is dull.

And Peter Lynch would agree: If the technology fascinates you, go for it. I wouldn't touch retailing either because it just doesn't grab me. Pike River does. Kupe does. Tui does.

Brent Sheather in the Harald reckoned that the average "balanced fund" was about 3% into commodities/resources. In hindsight, that looks horribly underweight. This is because the funds invest in proportion to the size of the segment in the stockmarket. Why? - Because that's what they have always done.

So enjoy yourself Casa. Its been a great time to be a bit contrarian.

Mx

Go for it.

Mx

[duncan macgregor]

[QUOTE=duncan macgregor;204640][QUOTE=duncan macgregor;203386][QUOTE=duncan macgregor;202999][QUOTE=duncan macgregor;202415][QUOTE=duncan macgregor;201047]Competition to select NZO share price on conversion date June 30th
in the event of a tie the winner is the person with the correct score posting first
I will list you in posting order.
1,AMR 180c, 2, OILER 165c, 3,Macdunk 159c. 4,MATTYROO 158c.
5,SEAMUS 135c, 6,SERPIE 131c, 7, LIZ 120c, 8, STRAT157c.
9TRACKERS 168, 10, COLIN 170, 11,THE MACHINE 210c. 12,MALCOLM 200c.
13,SPOOK 172, 14,BIG BOB184c, 15,ZORBA 155c, 16, REMY 167c,
17 AMERICAN PSYCHO 175c 18 SHASTA 161c, 19RONTHEPOM 171c 20 PHAEDRUS 160.
21SHREWDY 169, 22 BERMUDA 149, 23 MORV 183c, 24 COALIE 188c
25 DIGGER 173c, 26 blank, 27 NITA 181c, 28 SUMMER NED 193c.
29 QOH 179c, 30 WK6332 225c 31 BALANCE $10-60 32 KS 162,
33 TOK3N 145c, 34 SHANE M 162.5c, 35CORRAN 156c, 36 MICK100 300c.
37 DSURF 154c, 38 SKEET 185c,39 MIBO 177c, 40 JAY 162c,
41 ZACMAN 187c, 42 GAMBLER33 115c, 43 ANUBUS144c, 44 BRUCETO9 164c.
45 romer 163c.46 HOOP 147c 47 RABBI 148c 48 ROTWEILLER 153c,
49 MINGEATHINAIOOS 150c,50 MANXMAN 195c, 51 MACDUFFY 146c, 52 BLOCKHEAD 198c,
53 777 226c,54 SWISSBOY 174c,55 AIRDALE166,56 CLIPS 178c,
57 PADDIE 196c,58 FOODEE 176, 59 BK152c,60 MPC182c,
61 STEVE 151,62 ONTHEMONEY 143, 63 LION 186, 64,TIM23 189c,
65 BOB C 190 66 RIF RAF 191c 67, OUT TO LUNCH 194 68 SEHNSUCHT888 192c,
69 PIETRADE 220c,70 ZAC 197c, 71,CAM 245C,72, CHALICE 214c,
73 GLENDOONIE 142c 74,UPSIDE_UMOP 159c,

[STRAT]

[quote=duncan macgregor;204640][quote=duncan macgregor;203386][quote=duncan macgregor;202999][quote=duncan macgregor;202415] This competition closes on friday the twentieth with the last sell price being the winning number. If you have not entered you still have time to enter if you can find the winning number not already taken. Entries taken right up to the closing bell. MacdunkHolly Crap if this thing trades flat for a week it could leave me looking way smarter than I actually am :eek: lol:D

[777]

[quote=duncan macgregor;206712][quote=duncan macgregor;204640][quote=duncan macgregor;203386][quote=duncan macgregor;202999]Holly Crap if this thing trades flat for a week it could leave me looking way smarter than I actually am :eek: lol:D


As long as it is not 159. We would never hear the end of it.

[duncan macgregor]

[QUOTE=STRAT;206714][quote=duncan macgregor;206712][quote=duncan macgregor;204640][quote=duncan macgregor;203386]


As long as it is not 159. We would never hear the end of it. You got it in one 777 i might even buy a pile on friday before the close if the price is still below just to win crowing rights. Keep close watch my friend i am sneakier than most. Macdunk

[Crypto Crude]

mackdunk-Keep close watch my friend i am sneakier than most.

I Totally Agree...
I reckon you would buy something like 3 shares at $1.59 if you had to...
I bet You would not even shell out for a few thou...
:D
.^sc

[spook]

In case anyone's forgotten the options picking comp closes on Friday. Just a reminder here are the lucky numbers!

Rabbi 1.5c

Rif-Raf 5.7c

Dsurf 6.5c

Rotweiler 7c

McDunck 9c (Scotch)

Airedale 10K

KS 11.5c

bk 12c

777 13c

Zorba 14.5c

Tim23 15c

clips 17c ( Waitemata-)

Brucey09 17.6c (Sauza Tequila Gold )

Mibo 21c

PieTrade 22c

BobC 23c

Trackers + MPC + Upside Umop 24c

Lion 25c

Digger 27c

Chippie 28c

QOH 30c

Out To Lunch 35c

Taijon 38c

Malcolm 46c

Toulouse-Luzon 53c

WK6332 55c

For the record my personal pick was 20c. Not looking so good now!

[777]

You got it in one 777 i might even buy a pile on friday before the close if the price is still below just to win crowing rights. Keep close watch my friend i am sneakier than most. Macdunk


But remember two(or more) can play at that game.

[duncan macgregor]

But remember two(or more) can play at that game. Its going to be fun teasing the blue eyed brigade this week. I cant allow my mate STRAT to win with his $1-57 at any cost. The winner will be in the low $1-50ties i expect. Macdunk

[Nitaa]

Its going to be fun teasing the blue eyed brigade this week. I cant allow my mate STRAT to win with his $1-57 at any cost. The winner will be in the low $1-50ties i expect. Macdunkexpect the unexpected md.

The difference between an average investor and a great investor is the great investor sees the things the average one doesnt.

[Zaphod]

Must be election year.....

Govt consultants to study oil companies

The Government has commissioned an independent study into the operation of oil companies in New Zealand, Commerce Minister Lianne Dalziel has confirmed.

A consultancy company is undertaking the study, but it has not been identified.

Ms Dalziel said the Government wanted to find out whether there were any factors hampering competition, Radio New Zealand reported today.

It quoted the minister as saying that while the fuel price depended on the international market, New Zealanders deserved transparency.

The consultancy company will also look at whether the Australian fuel monitoring scheme would be useful in New Zealand.

The Automobile Association said it hoped the study would help to increase competition and keep petrol prices as low as possible.

The chairman of Parliament's commerce select committee, National's Gerry Brownlee, said he wasn't sure whether the study would have any real benefit for motorists.

The steeply rising cost of petrol has been worrying all the parties in Parliament, and there have been calls for the Government to reduce or scrap the excise duty on fuel.

- NZPA

http://www.stuff.co.nz/4584816a11.html

[Nitaa]

I thought this would be an ideal time to put my view on magin lending for people who are considering it with NZO.

History would show that those who used margin lending (through Mcquarie i think) around nzooc time got burnt to some degree. Although NZO looks a spectacular investment over the short to medium term at least it still has its risks. The biggest risk at present is the oil prices which are becoming extremely voloatile. Translate that into sp movement especially after June 30th then 10, 20, 30% losses or increases in the sp could be quite the norm. This means the ones who are heavily geared are quite likely to be called to cover the margins at short notice.

IMO. If you have the funds to cover against such events then no problem. If not then i strongly sugest you do not put yourself in that position otherwise the gamble is extremely high. High risk versus high reward.

Case in point with regards to property. A friend buys a property ealry last year.. borrows 100% of loan to subdive, sell etc for a quick captial gain (even if proporty prices dont move). Over 12 months later, $1,000 interest pw and cannot sell the other property. Current position. Going backwards $1,000 per week plus any depreciation on his property investment.

The point i am trying to make, oil like property will go up and down. Often its not until its too late that that one ends up holding onto a stock that is in decline and the investor gets phoned to cover the losses. You may be forced to sell even though the overall trend of a stock is upward.

Just a word of caution as we do not know what is going to happen tomorrow or the next day.

discl. not a profession and just my opinion only. Please dyor

[Trent]

See link for some interesting data on the large oil exporting countries

http://www.energyandcapital.com/articles/oil-export-crisis/712

[fish]

[QUOTE=Nita;206788]I thought this would be an ideal time to put my view on magin lending for people who are considering it with NZO.

Nita -do you really believe all margin lending with nzo is high risk and high reward .

ASB seem to have a fairly safe system for the prudent investor .
Your warning about margin calls is relevant-obviously one should not lend most or all of the limit that could result in a margin call . However it does appear to be an easy low cost way of lending to convert the options if you have a portfolio of shares which you dont want to sell but are prepared to use as security to secure a floating loan at 10.59 % to convert the options .
If a margin call is made all you do is sell shares by midday the following day to stay within your limit . This is easy and quite different to your analogy with property .
All investments have risks . Not least property and finance companies that pple blindly invest in .
My own belief is that nzo have minimal downside and lots upside in the next few months .
This is similar to recent broker reports-look at the latest -Hamilton hyde and greene and also Forsyth Barr-both value nzo at around $2-17 and state minimal downside lots upside .
Their valuations are conservative and dont take account of the current tapis price over US $140 and the sudden fall in exchange rate to 75 cents . With tui producing nearly triple expectations and current prices so high nzo share price will be upgraded . Dont forget the wonderful happenings of prc and kupe plus the high probability of momoho .
To sell options worth around 65 cents on fundamentals for 5 cents is taking a loss . It is a great pity that small shareholders have been put in this position .
I feel the small risk/high reward of margin lending for nzo is preferable to taking such a loss.

I am not happy about the contradictory information about the Tui upgrading-and even the lack of a firm date for annoucing it-nzo i think last said it would be mid june-ie next week -or even tomorrow -awe have been quoted as end june-?after options cease trading .No doubt some inside people should know .

It is interesting that nzo have stated you dont need to pay for the options on 30/6/08-just post a cheque to catch the last post stamp of the day .Therefore rather than sell options at 5 cents this week if you cant afford to convert you could hold on to them and sell other share on the 30th june to fund your conversion . A risky position i know but dont share prices normally go up on the 30th june-the last day of the financial year for many funds ?
Awe

[777]

"but dont share prices normally go up on the 30th june-the last day of the financial year for many funds "

If there is a big buyer out there then maybe they will show their hand after the options stop trading but before the 30th June. Would help give a boost to the head share and they would show a profit immediately.

[Nitaa]

Fish.

Yes you can you other shares as security. However i dont like being in a position to sell something unless i want to. If for others they are ok about it then that is fine.

Another point. i am not sure what the interest rate is.. approx 10% pa but at that rate i would sooner rather mortage the house at a cheaper rate that pay brokers a preium interest rate AND i am not forced to sell stocks i dont want to.

EG. if the stock price is at 1.60 at june 30th then to break even after 12 months is 1.76 (give or take). For a risky (more appropriately a volatile investment) the odds of being called upon to cover some losses is quite high.

My opinion, i believe the brakes will be lifted well and truly come post conversion date but that doesnt change my view that the stock could take a hit on many different fronts. EG. Momoho failure, PRC problems (still many risks), oil prices crashing (anywhere up to 50%), global moultdown on the markets, sub prime and so on.

The flip side has many positves which have already been outlined by myself and others.

disc. My cheque is already written out and waiting for the last 7 days of June to post it. ps. Using cash and defintaly not margin lending

[Rabbi]

I've met Lianne dalziel and she is nothing but an overweight (fat) femininist toady of the Prime minister. As a minister of the crown she couldn't hold down a job, too much stress. They love interferring now they know they are losing power. What a pack of power crazy egotistical PC green sucking ars.....

[zorba]

See link for some interesting data on the large oil exporting countries

http://www.energyandcapital.com/articles/oil-export-crisis/712


Trent,

Intersting post, very interesting !!

Z

[Nitaa]

Trent,

Intersting post, very interesting !!

Zit was a very interesting post except for one thing. it is only considering historical data and projected data without considering new oil finds, more economical fields etc. the inital problem is even if there are significant finds it you can safelysay that the average time to bring it to production is at least 5 years. Tui was an exception and its worth remebering that tui set a WORLD RECORD for paying itself off. Something like 3 to 4 months.

Why am i so bullish on nzo. Very simple based on rough calculations.

PRC = $170m
Tui = $600m (after roylaties, tax, op ex based on current prices over 10 years) Im expecting a minimum of 50mbo
Kupe = $300m (over 15 yrs) not including Momoho (bit unknown)
Options conversion = $160m (80% conversion)

Based on above figures the market cap would be around $560m on current prices.

Here you have a stock that if they sell PRC at current prices plus option conversion plus tui for the 12 months will be close to the current market cap. That is why nzo is an absolute steal today and the ones who sell anything below $2.50 need a bullet to their head.

happy to be challenged on any prices and it is late at night

[Bilo]

I reviewed a few of the broker valuations over the weekend as crunch time approaches for option conversion. :mad:They started to make me angry when I saw assumptions like the Hamilton Hinden Green Research one for the price of oil to be USD80 per barrel from 2013 onwards! This should be censured for blatant down ramping - apologies should be forthcoming. Have they been buying up options? Anyone who sold their shares on the basis of the $2.18 target price based on USD80 oil should have a legal case to go HHGR. What credibility could you provide the author to any part of their report? They did provide some good research and a valuation range and were possibly the best of the broker reports that I looked at, but sloppy valuation work really for professional advisers...
It emphasises the fact that you must do your own research and become comfortable with your own maths...:D

Oh and by the way, as a result of my research, unless the world destructs (or it is cheaper to buy heads, or my world implodes before June 30, or options exceed 50c) I will be converting all my options and maybe some more... borrowing a phrase from Bermuda - backing up the trucks, truckloads coming my way:)

[jdg]

a plug for NZO at the bottom of the article.

from the sydney morning sun herald - with thanks to patpat on another forum

Among brokers, Oil Search is the standout stock with nine buy recommendations, compared with three for Woodside (nine say it's a hold or sell) and seven for Australian Worldwide Exploration.

And that's more because of its huge reserves in Papua New Guinea of gas, an alternative to oil.

Well-regarded middle-sized oil explorers include Roc Oil with seven out of nine brokers covering the stock calling it a buy and the other two a hold; and Beach Petroleum which also has extensive gas interests and has six buys out of six broker recommendations. Although the oil price has become a speculative bubble, the same can't be said for speculative stocks.

The prices of many of the smaller oil explorers have barely budged from a year ago.

Partly because the bigger producers are such a sure thing that there's no need to take extra risk in a volatile sharemarket to start with, analysts tend to give the oil speculators short shrift.

There's also a bit of science and a lot of luck involved.

"You have to look at the fundamentals such as their drilling prospects and the size of their reserves," said Valibhoy.

Still, two stocks that he says pass the test are Cue Energy and New Zealand Oil and Gas which have already started drilling.

[duncan macgregor]

BILO, Its not what the shares are worth this week that counts its what they will be worth in the near future after conversion of the options. The company is now super cash rich in a business where to progress will require truck loads of cash. They passed out a dividend to keep the numbskulls happy which is contradictory to raising more cash with the options which reduces your share in the company. The share price has been trending much lower than need be simply because of the new money required to convert the options. I fully expect the share price to drop this week making the options worth about my initial estimate of 5c.
The long term share price depends on their next move which seems to exclude Taranaki so perhaps a play in the southern basin coming up. I dont think borrowing to convert is a wise move that would be extreme risk. I would think it a wise move to have a reasonable stop loss level on this company after conversion. Macdunk

[trackers]

BILO, Its not what the shares are worth this week that counts its what they will be worth in the near future after conversion of the options. The company is now super cash rich in a business where to progress will require truck loads of cash. They passed out a dividend to keep the numbskulls happy which is contradictory to raising more cash with the options which reduces your share in the company. The share price has been trending much lower than need be simply because of the new money required to convert the options. I fully expect the share price to drop this week making the options worth about my initial estimate of 5c.
The long term share price depends on their next move which seems to exclude Taranaki so perhaps a play in the southern basin coming up. I dont think borrowing to convert is a wise move that would be extreme risk. I would think it a wise move to have a reasonable stop loss level on this company after conversion. Macdunk

I agree with you there Macdunk, though don't think NZO is interested in GSB (well iirc (big if there!) they said that they didn't plan on bidding on any acreage anytime soon)

[croesus]

Would any one know... if Momoho was spudded yesterday ?.... am guessing there will be no tangible results till July ?

[Casa del Energia]

it was a very interesting post except for one thing. it is only considering historical data and projected data without considering new oil finds, more economical fields etc. the inital problem is even if there are significant finds it you can safelysay that the average time to bring it to production is at least 5 years. Tui was an exception and its worth remebering that tui set a WORLD RECORD for paying itself off. Something like 3 to 4 months.

Why am i so bullish on nzo. Very simple based on rough calculations.

PRC = $170m
Tui = $600m (after roylaties, tax, op ex based on current prices over 10 years) Im expecting a minimum of 50mbo
Kupe = $300m (over 15 yrs) not including Momoho (bit unknown)
Options conversion = $160m (80% conversion)

Based on above figures the market cap would be around $560m on current prices.

Here you have a stock that if they sell PRC at current prices plus option conversion plus tui for the 12 months will be close to the current market cap. That is why nzo is an absolute steal today and the ones who sell anything below $2.50 need a bullet to their head.

happy to be challenged on any prices and it is late at night

No challenge - I've taken a thumb nail due diligence approach - the sp below, comes to $2.42 per share. There are assumptions all through it, and I've valued Kupe and Tui by two difference methods - but it's all art anyway. The salient point is that we're not far apart even with different approaches. Must give some comfort:----


PRC = 520 x .31 = 161

Tui 1 yrs ops = 270 mill

All opts excercised = 200

Kupe 400 (10% return on capital for purchaser- hard to tell with Kupe because the gas price is up for speculation - take it at around $5/Mj (who really knows?))

Tui sale value - (60% of revenue) 162

Minus 225 for all development costs - bundling kupe. Tui, PRC, Hector duster, overheads, debt and unused debt facility for kupe together

1.192 billion / 400m shares

= $NZD2.42 per share

[Rif-Raf]

I reviewed a few of the broker valuations over the weekend as crunch time approaches for option conversion. :mad:They started to make me angry when I saw assumptions like the Hamilton Hinden Green Research one for the price of oil to be USD80 per barrel from 2013 onwards! This should be censured for blatant down ramping - apologies should be forthcoming. Have they been buying up options? Anyone who sold their shares on the basis of the $2.18 target price based on USD80 oil should have a legal case to go HHGR. What credibility could you provide the author to any part of their report? They did provide some good research and a valuation range and were possibly the best of the broker reports that I looked at, but sloppy valuation work really for professional advisers...
It emphasises the fact that you must do your own research and become comfortable with your own maths...:D

Oh and by the way, as a result of my research, unless the world destructs (or it is cheaper to buy heads, or my world implodes before June 30, or options exceed 50c) I will be converting all my options and maybe some more... borrowing a phrase from Bermuda - backing up the trucks, truckloads coming my way:)

Ok so what price should HHG have used for their POO assumption? I would agree that the $80 may seem conservative given current levels, but noone can predict the future with accuracy so just because your crystal ball is differnt to theirs doesn't make them negligent when they are later proved wrong and having clearly documented their assumptions.

[Dr_Who]

Whats more important to me is how management will spend all that cash sitting in the account. It wont last long if it goes to drilling dead ducks.

[Bilo]

BILO, .... I dont think borrowing to convert is a wise move that would be extreme risk. I would think it a wise move to have a reasonable stop loss level on this company after conversion. Macdunk

Concur Dunk but after many years in this company my best purchases have been when I have followed the big money, and nearly every time there has been an abundance of soothsayers pointing out the error in my investment decisions. My reading of the company is that they want to search for oil and gas close to where they have already found oil and gas. That is where you have the best information available and the odds are greatest. As you suggest, their funds are still limited as they are in an expensive business, and prudent spending is likely to continue with the current board, who appear to have behaved consistently and conservatively to me. Don't expect that to change. They will soon have three earning projects in three markets; gas, oil and coking coal. So IMO they have less chance of becoming a complete loss than my house - which is a much greater risk really in this turbulent world, although insured against most things.

So no to stop losses (which IMO only encourage the unscrupulous and unsociable market participants to trip them) but am prepared for a decent (although in all probability short-lived) retracement as the same manipulators love any opportunity to short whenever defences are committed/stretched.

thanks for your concern McD
PS I tried to participate in your little sweep but you eliminated me after accepting my entry at 156 cps, so I got the pip and withdrew...

[duncan macgregor]

BILO, I only withdrew your entry because you second picked another entry which meant you would not have a chance to win. You should have worked it out and picked my $1-59 instead simply because i am not allowed to win, so whoever second picked my score would still have a winning chance. I think CORRAN at number 35 had your pick first. macdunk

[upside_umop]

right on rif raf...
its what the market as a whole assumes the POO or any underlying revenue stream to be that counts. if you have outrageous assumptions, you will generally be mistaken in the long run, as 'your' intrinisic price will never be realised....

i think nzo is undervalued at current POO, coal etc, but this is coming to very volatile times. volatility means risk, and the market is simply pricing that into NZO atm. if was a general consensus that the world could live with $130 oil, then we would see a different story. but not right now...there is risk of a 50% retracement, which would still keep us in the bull market.

how do people get a valuation on tui of $600 million?
or kupe of $400 million?

[COLIN]

I see that ACC have taken their interest to 7% now, by acquiring a further 1.8 million options on market. I wouldn't be surprised if they are still buying, and account for some of the larger option purchases going through.

[fish]

I see that ACC have taken their interest to 7% now, by acquiring a further 1.8 million options on market. I wouldn't be surprised if they are still buying, and account for some of the larger option purchases going through.

I think colin you were around at the time TTP tried to rip off small investors with the agp split . ACC played a very astute game and did exceedingly well without the hassle of arbitration and appeals court .
They will do very well out of this unless small investors wake up and stop giving away their options at 5 cents

[STRAT]

Its going to be fun teasing the blue eyed brigade this week. I cant allow my mate STRAT to win with his $1-57 at any cost. The winner will be in the low $1-50ties i expect. MacdunkLOL Macca, Does this mean if need be you might SELL a few to make sure? :eek:;):D

[fish]

Ok so what price should HHG have used for their POO assumption? I would agree that the $80 may seem conservative given current levels, but noone can predict the future with accuracy so just because your crystal ball is differnt to theirs doesn't make them negligent when they are later proved wrong and having clearly documented their assumptions.

Agree they have documented over 9 pages their valuation methodology to arrive at a figure of $2-18 cents .They obviously have not accepted that the oil price has gone up forever-its not realistic to expect it to drop back to $80 .

They have also for instance predicted the nsd/usd will be .77 for next year-well it has already fallen to .75 and tapis is still over 140 ( they have tapis at 100 this year ) .It is a very conservative valuation and likethe forsyth barr indictes minimal downrisk and max uprisk .

It seems that stupidity ,fear or lack of funds has driven the option price down to 5cents .
there is a very high probability a lot will regret it next month

[temptation]

As long as HHG have used the same assumption of $80 pbo for all of the oil stocks that they have assessed, then there is no reason to take offence. It just means that if we are right in our belief that oil will never drop to $80 again, then all of the oil stocks remain undervalued.

[COLIN]

I think colin you were around at the time TTP tried to rip off small investors with the agp split . ACC played a very astute game and did exceedingly well without the hassle of arbitration and appeals court .
They will do very well out of this unless small investors wake up and stop giving away their options at 5 cents
Fish: You have a long memory! Would you believe, I took some AGP shares (for portfolio diversification & forex reasons!), missed out on the opportunity to sell them off at 40p to SEA (they only had that window open for a week and unfortunately I was away on holiday when the offer forms arrived), and - for my folly - have suffered the ignominy of seeing the AGP price (on AIM) slip-slide away (in disgust I haven't even bothered checking the price lately.) Only about 3% of AGP is not yet controlled by Mr Lu, and I guess he is playing the patient Chinese Waiting Game, just picking up whatever comes onto the market. However, I am determined to outlast him! I communicated my frustrations to the UK "independent" Chairman, but to no avail. Somewhat to my surprise, though, the company is promising a dividend (Yes, a dividend!) subject to satisfactory performance in the current year - I can hardly wait!
Back to ACC: Yes, they are astute operators. And I agree that anyone who sells NZO or NZOOD into the current market is being ridiculously foolish (if it is possible to be foolish ridiculously!)
Cheers - and I wouldn't hesitate to borrow (at manageable levels) to convert any options you are holding.

[Lion]

Tapis price today NZ$187.83
NZOOD exercised so far 3,189,388

And I fully agree, COLIN, ". . that anyone who sells NZO or NZOOD into the current market is being ridiculously foolish"
and " . .I wouldn't hesitate to borrow (at manageable levels) to convert any options you are holding"

[Unicorn]

I reviewed a few of the broker valuations over the weekend as crunch time approaches for option conversion. :mad:They started to make me angry when I saw assumptions like the Hamilton Hinden Green Research one for the price of oil to be USD80 per barrel from 2013 onwards! This should be censured for blatant down ramping - apologies should be forthcoming. Have they been buying up options? Anyone who sold their shares on the basis of the $2.18 target price based on USD80 oil should have a legal case to go HHGR. What credibility could you provide the author to any part of their report? They did provide some good research and a valuation range and were possibly the best of the broker reports that I looked at, but sloppy valuation work really for professional advisers...
It emphasises the fact that you must do your own research and become comfortable with your own maths...:D

Oh and by the way, as a result of my research, unless the world destructs (or it is cheaper to buy heads, or my world implodes before June 30, or options exceed 50c) I will be converting all my options and maybe some more... borrowing a phrase from Bermuda - backing up the trucks, truckloads coming my way:)

I have no problem with a broker valuing oil at $80 from 2013. As long as they are up front about their assumptions, which they appear to be. Oil could be anything in 5 years - if you consider where oil is now, and try to work backwards to where it should have been back in 2003 you will probably come up with an inaccurate result.

There are many assumptions that need to be made in assessing prices 5 years out, and some are bound to be wrong. If someone makes different assumptions to me that just means at least one of us is wrong (most probably both). Don't get angry, be happy making money by being a better forecaster than the broker!

[Unicorn]

it was a very interesting post except for one thing. it is only considering historical data and projected data without considering new oil finds, more economical fields etc. the inital problem is even if there are significant finds it you can safelysay that the average time to bring it to production is at least 5 years. Tui was an exception and its worth remebering that tui set a WORLD RECORD for paying itself off. Something like 3 to 4 months.

Why am i so bullish on nzo. Very simple based on rough calculations.

PRC = $170m
Tui = $600m (after roylaties, tax, op ex based on current prices over 10 years) Im expecting a minimum of 50mbo
Kupe = $300m (over 15 yrs) not including Momoho (bit unknown)
Options conversion = $160m (80% conversion)

Based on above figures the market cap would be around $560m on current prices.

Here you have a stock that if they sell PRC at current prices plus option conversion plus tui for the 12 months will be close to the current market cap. That is why nzo is an absolute steal today and the ones who sell anything below $2.50 need a bullet to their head.

happy to be challenged on any prices and it is late at night

I think your Tui value of $600M is incorrect if calculated at current figures.

Another 33M barrels to be produced (47M as announced less the 14M produced thus far).

Production cost is US$545M, being the FPSO lease announced recently.

Income from 33M barrels @ $140 is US$4,620M (excludes freight and quality adjustments, for simplicity)

Net Profit = US$4,075M

@.75 exchange rate and 12.5% interest in the field is NZ$680M to NZO over 14 years

Less accounting profits royalties say 17.5% = NZ$561M

Spread over 14 years, with production and FPSO lease loaded towards the initial years, at 10% discount rate is currently worth NZ$400M

Less tax @ 30% gives NPV of $NZ280M after tax - about half your figure.

[fish]

I think your Tui value of $600M is incorrect if calculated at current figures.

Another 33M barrels to be produced (47M as announced less the 14M produced thus far).

Production cost is US$545M, being the FPSO lease announced recently.

Income from 33M barrels @ $140 is US$4,620M (excludes freight and quality adjustments, for simplicity)

Net Profit = US$4,075M

@.75 exchange rate and 12.5% interest in the field is NZ$680M to NZO over 14 years

Less accounting profits royalties say 17.5% = NZ$561M

Spread over 14 years, with production and FPSO lease loaded towards the initial years, at 10% discount rate is currently worth NZ$400M

Less tax @ 30% gives NPV of $NZ280M after tax - about half your figure.

Unicorn-at current production of 45000 barrels a day nzo share =5625 barrels a day therefore nzo gross income at todays tapis and exchange rate is nz $1,050,000 per day !At this rate nzo will have banked $680million in a little over 2 years . Sure there are expenses taxes and royalties but brilliant cash flow . Taxes are paid later and we get them back through tax credits . why then do you apply such a penal discount rate for so long ? Does not the cash flow add to the value and reduce net debt or even add interest recieved to the profit ?

Next the announced reserves appear to me to be what is proven and published-but a lot more is likely recoverable-we have not been given an estimate of what this might be (hurry up please awe and nzo and announce it before the options expire ) . Surely This must have some value .?

regards
fish

[tim23]

Duncan - you are way wrong on the dividend recently paid, you are treating this options issue like a rights issue. If it was a rights issue then your arguement would be fine, the options were issued over 2 years ago.

[duncan macgregor]

Duncan - you are way wrong on the dividend recently paid, you are treating this options issue like a rights issue. If it was a rights issue then your arguement would be fine, the options were issued over 2 years ago. Tim to give a dividend then raise money diluting your individual share value with more slices in the cake is plain stupid thing to do. It would have been much better to do one or the other without that contradiction. Timing is not important they must surely have known the likely outcome from way back. They dont need the money so why the options?. If they do need the money why the dividend which is only being paid to appease the brain dead. Macdunk

[tim23]

You still miss the point they could hardly have cancelled the options could they? I think they wanted to pay a divy (and the share price was still around $1.40 when they went ex-div so the options were out of the money) to reward shareholders I don;t see a problem with that - a lot of companies pay dividends, NOG included now!

[Awamoa]

I agree with you Duncan.To me there is no logic in giving with one hand and taking with the other.
Its seems that they are only proving that they can pay dividends.
Personally I would rather the share price was 5 cents higher and those funds were still in the Reserve Account.

[Unicorn]

Unicorn-at current production of 45000 barrels a day nzo share =5625 barrels a day therefore nzo gross income at todays tapis and exchange rate is nz $1,050,000 per day !At this rate nzo will have banked $680million in a little over 2 years . Sure there are expenses taxes and royalties but brilliant cash flow . Taxes are paid later and we get them back through tax credits . why then do you apply such a penal discount rate for so long ? Does not the cash flow add to the value and reduce net debt or even add interest recieved to the profit ?

Next the announced reserves appear to me to be what is proven and published-but a lot more is likely recoverable-we have not been given an estimate of what this might be (hurry up please awe and nzo and announce it before the options expire ) . Surely This must have some value .?

regards
fish

At 45,000 barrels per day for another two years the Tui field will have produced all of the currently announced oil - which is the figure that Nita's rough valuation was based on. It is not reasonable to assume that will happen, given that the FPSO is now committed for another 7.5 years and the water cut is increasing.

Ten percent is not a penal discount rate - there is risk in the business and current bank interest rates are up over 8%.

The valuation is based on current and announced figures. Possible increased reserves, and discoveries are not part of this calculation.

[tim23]

You also miss the point these are two separate issues - you are getting confused at the timing being just a few months apart. Would you have the same arguement if the options wer due to expire in 2009?

[duncan macgregor]

You also miss the point these are two separate issues - you are getting confused at the timing being just a few months apart. Would you have the same arguement if the options wer due to expire in 2009? You also miss the point TIM. To raise money after paying it back so soon is counter productive. I suppose it is only to keep the people happy that have no understanding of how the market operates. The more options converted TIM the less of the pie you own. The more the company pays in dividends the more they will have to dilute the share price in the future raising more money to prospect with. They are in a high risk very expensive industry there is no need to raise money diluting your share or pay dividends. Its a very poor business decision. Macdunk

[digger]

I think your Tui value of $600M is incorrect if calculated at current figures.

Another 33M barrels to be produced (47M as announced less the 14M produced thus far).

Production cost is US$545M, being the FPSO lease announced recently.

Income from 33M barrels @ $140 is US$4,620M (excludes freight and quality adjustments, for simplicity)

Net Profit = US$4,075M

@.75 exchange rate and 12.5% interest in the field is NZ$680M to NZO over 14 years

Less accounting profits royalties say 17.5% = NZ$561M



Spread over 14 years, with production and FPSO lease loaded towards the initial years, at 10% discount rate is currently worth NZ$400M

Less tax @ 30% gives NPV of $NZ280M after tax - about half your figure.


Hi Unicorn,
You seem to have doubled up in your FPSO expenses. Firstly you have deducted all the costs then later over 14 years doing it again to achieve a smaller figure.I can not understand that logic.
From memory this was also done some years ago with oil about 35 dollars and by the time all the rolalities and tax was done and oil projected to fall to the teens the TUI field was a loss case and should never have been developed.I know accountants do this and i have delt with several over the years and following there results and comparing them with mine i have full stop ended up the richer.
Given the way you have shaved the figures and started off with only 47 million from TUI[the latest JV estimate] i get an investing feeling that NITA 600 million is not too consertive to work with.The 47 million will turn out more like double that long before the 14 years of discounting you are using regardless of what the accountants believe.
Oldly enough i was with my accountant today and afterseeing my results over 40 some years and listening to what i had to say about tui and pike,kupe he is going to exercise his fathers options. He particulary liked the bit about the Aus tax requirements needing to be accounted for if a field is upgraded. From his experience that would go a long way to explaine why the upgrade will be as small as possible and just accidently happen at the start of the new finanical year.
So while we all have to do our own research I want to arrive at a picture that i can go back and look at in 2 to 5 years and know i was somewhere near the traget.This can only be achieved if a balance is struck between all that can be deducted is added to all that can go positive.Now as i look back on value i struck some years ago it has all balance about even with some gains and some losses.
Still you have given us the floor value which some investers use exclusively and that explains why they end up the poorer. For those of us that want the bigger picture there is added wells to drill,oil to continually rise,NZ dollar to drop,and some of that tax to come back with dividends. Roll on the future.

[joey]

I agree with you Duncan.To me there is no logic in giving with one hand and taking with the other.
Its seems that they are only proving that they can pay dividends.
Personally I would rather the share price was 5 cents higher and those funds were still in the Reserve Account.

Exactly correct. Especially since a dividend is taxed in NZ and a capital gain is not.

[Unicorn]

Hi Unicorn,
You seem to have doubled up in your FPSO expenses. Firstly you have deducted all the costs then later over 14 years doing it again to achieve a smaller figure.I can not understand that logic.

Given the way you have shaved the figures and started off with only 47 million from TUI[the latest JV estimate] i get an investing feeling that NITA 600 million is not too consertive to work with.The 47 million will turn out more like double that long before the 14 years of discounting you are using regardless of what the accountants believe.


Hi Digger

I did not double the FPSO expense. I just assumed that, as indicated in the FPSO extension announcement, the FPSO costs would be roughly aligned with oil production. That is the FPSO would cost more in the first couple of years and a lot less down the track as it was delivering less oil. If you don't do this you get artificially large up front profits and losses at the end of the term.

Nita's figures were based on current values. I just did the math on those figures, and it came up with a much lower end result. Earning a few million dollars in 14 years is not worth much now - but by the time those 14 years have gone by the earnings are likely to have changed drastically.

I quite agree that the current figures do not give a good indication of what will happen over those 14 years that the FPSO is available for. But that is a different issue.

Personally I think NZO is very cheap at current prices (just shook out a few things and bought some options). In addition there is an enormous amount of further potential - the last few holes being dry does not necessarily mean Taranaki is out of undiscovered oil!

[777]

Exactly correct. Especially since a dividend is taxed in NZ and a capital gain is not.

With the amount of profit being made, any dividend will be fully imputed like the last one.

[Corporate]

With the amount of profit being made, any dividend will be fully imputed like the last one.

That still means your getting taxed....just not twice if the dividend was not fully imputed.

No tax on capital gains

[Bilo]

That still means your getting taxed....just not twice if the dividend was not fully imputed.

No tax on capital gains

But capital gains aren't realised until you sell - and the market has to provide the depth and liquidity to enable you to sell at the market price -which it doesn't frequently...dividends are OK to ensure that long term investors get some of the gains - not just the traders and mates of NZO...

[fish]

I have been watching the numbers of options for sale everyday for some time and I dont know if its coincidence or not but there always seems to be just over 6 million shares left over at the end of everyday . Even more strange was the way they appeared last month-one day i looked and buyers outnumbered sellers many times the next day the market was aflood with sellers and yet there hadnt been any news.
Now several million options are sold every day and you would expect the number of sellers to dwindle but it stays the same at 6 million .
millions of these options are spread out at prices which clearly wont sell .
Would it be possible for a big buyer to deliberately create a false impression of selling pressure by putting some options up for sale at prices that wont sell in order to force those that need to sell in the next few days below those prices?
This way of course they could gradually accumulate at prices below that of a fair market .

[morv]

you are on to it

[Mingeathinaikos]

I have been watching the numbers of options for sale everyday for some time and I dont know if its coincidence or not but there always seems to be just over 6 million shares left over at the end of everyday . Even more strange was the way they appeared last month-one day i looked and buyers outnumbered sellers many times the next day the market was aflood with sellers and yet there hadnt been any news.
Now several million options are sold every day and you would expect the number of sellers to dwindle but it stays the same at 6 million .
millions of these options are spread out at prices which clearly wont sell .
Would it be possible for a big buyer to deliberately create a false impression of selling pressure by putting some options up for sale at prices that wont sell in order to force those that need to sell in the next few days below those prices?
This way of course they could gradually accumulate at prices below that of a fair market .

If you firmly believe that the price is being manipulated, would you not buy yourself??

[Nitaa]

I think your Tui value of $600M is incorrect if calculated at current figures.

Another 33M barrels to be produced (47M as announced less the 14M produced thus far).

Production cost is US$545M, being the FPSO lease announced recently.

Income from 33M barrels @ $140 is US$4,620M (excludes freight and quality adjustments, for simplicity)

Net Profit = US$4,075M

@.75 exchange rate and 12.5% interest in the field is NZ$680M to NZO over 14 years

Less accounting profits royalties say 17.5% = NZ$561M

Spread over 14 years, with production and FPSO lease loaded towards the initial years, at 10% discount rate is currently worth NZ$400M

Less tax @ 30% gives NPV of $NZ280M after tax - about half your figure.I appreciate your resposne Unicorn. You are correct to a degree is you base the figures soley on past and what is projected so far. The big difference for me is the projected earnings and estimated recoverable oil for tui. as long as oil stays over $100 a barrel then i am convinced tui will produce not just 50 mbo as ive stated but at least 60 mbo. This does not include any tie ins with other explorations with the tui area. My view is looking at how production is going compared to previous models they have measured against then this adds more substance to argument that tui on current values will produce closer to 60 mbo than 50mbo.

Kupe is an interesting prospect. given NZO's investment is well over $100m they would proably be looking at least a 15 to 20 % net return pa. Seems like a great passive income basically guarenteeing divies for many years to come.

Much water to cross under the bridge but medium to long term this stock looks very good. My main hope is it doesnt get bought out in the next couple of years.

[Oiler]

Would any one know... if Momoho was spudded yesterday ?.... am guessing there will be no tangible results till July ?

Croesus...... there is a lot of helicopter activity heading south towards the Ensco ;) Probably mud engineers etc getting ready for the drill? We might hear something today.

Oiler

[Sehnsucht888]

Brian Gaynor was on the TV1 breakfast show this morning, and mentioned that NZO was finalising a capital raising of 200 million (the options), and that that was the largest (equity raising) on the NZ this year.
Said that of all the companies, NZO needed the money less than the others as it made 100 Million profit, much more than Sky, etc.
Very positive comments all though.

[Sehnsucht888]

Full webcast here

http://tvnz.co.nz/view/page/413551/414443?video_id=1850355

First 2:20 minutes about oil in general. Then into NZO

[777]

That still means your getting taxed....just not twice if the dividend was not fully imputed.

No tax on capital gains

NZO makes $1,000 profit. Pays tax of $300. Left for your capital gain is $700.
If it paid out the $700 as a dividend then you get it net.(accepting people have different tax rates) ie. the tax has been paid and you are no better or worse off as an investor. However as a trader you still get the $700 but get the benefit of the tax having been paid rather than having to sell and pay tax on the capital gain. The share price usually only drops by the net dividend payment not the gross.

The main benefit of the dividend is that profits are distributed to the shareholders as a company makes money. While some profits should be retained for expansion/development the shareholders should benefit from their investment. This options capital raising is for expansion. Dividends are from profit generated.

I also believe that the more money at someone's disposal, less care is taken with it. Time will tell how NZO looks after it.

[zorba]

Check out recent oil price volatility:

http://futures.tradingcharts.com/intraday/CL_/78

[zorba]

SS-888,

Thx for TVNZ link, Brian Gaynor is on to it.

Here is an audio link to Radio NZ and a commentory by Shork who writes the Shork Report on oil prices etc. Oil is going higher, the dollar exchange rate is critical, and then its going to crash big time !!!

http://www.radionz.co.nz/audio/national/mnr/oil_price_record_high


Here also is BBC report on extra Saudi production which apparently is going to be Heavy Crude and thats not much help since most refinineries are set up to process Light Crude oil.

http://www.radionz.co.nz/audio/national/mnr/olil_price_hike

Where will it all end .... ????

Z

[bermuda]

Thanks for that Zorba,
I think the latest IEA report of June 13th is far far more relevant.

A forecast 12.5 million barrel per day shortfall on its way.

Oil goes higher. Fancy comparing it to the Tulip and IT bubbles. Those Americans have their heads in the sand.

THE ONLY WAY THE OIL PRICE COMES DOWN IS THROUGH ALTERNATIVES AND WE ARE 5-10 YEARS AWAY FROM THAT.

[Sehnsucht888]

Alternatives - like that mentioned in Section B of the dominon this morning. Talking about using some tiny bugs that convert agriculture waste products into Crude Oil...

Shork seems pretty keen on oil "crashing" to $70 though, if the USD rate somes off that would be less of an impact to us here, (NZO selling perspective). And the more we are flogging off at $130+ a barrel through these high flow rates the better.

[manxman]

Alternatives - like that mentioned in Section B of the dominon this morning. Talking about using some tiny bugs that convert agriculture waste products into Crude Oil...


That's going to put the greens in a quandary. These wee bugs are Jeanettically modified. How can we certify that all the bugs are out of the fuel before it enters New Zealand? May we even be thinking about bringing the bugs into New Zealand and making Frankenfuels here? If these bugs ever got loose they could devastate every compost heap in the Coromandel.

On the other hand, certain greenies might welcome a few microscopic friends. Up here in the north, the police regularly burn off as much of the cannabis crop as they can find (being careful not to stand downwind, according to their instructions). There's probably enough canabis up here to provide a fuel resource just a bit smaller than Gull. Imagine Nandor's hemp derived fuel turning the Auckland gridlock into a massive love-in. Road rage would just melt away.

Well thats about as probable as the west cutting back on consumption so that India and China can get their fair share.

Its going to be a rough week for NZO,PPP and PRC until everyone has worked out how to pay for their oppies. It looks as though the field upgrade will not be released before July 1 for Australian tax reasons. Momoho will simply be drilling ahead, Pike will be carefully picking through rotten rock by the Hawera fault. Great buying weather.

Mx

[Dr_Who]

Can Ph or a graph specialist give us commentary on NZO graph? It looks like graph shows sp coming down.

[Financially dependant]

I have put my order in for more head shares at $1.51, hoping the sell off pressure will enable me to top up.
I believe there will be support at around $1.50 for successful conversion and with the large buy order to mop up unwanted options (at a 1c) there is still plenty of interest.
The timing of the upgrade and other announcements makes it all very interesting.
It appears to me limited down side and lots of up!

Any thoughts?

[777]

Any selling pressure for exercising the options automatically ceases once $1.50 is reached. A lot depends on whether NZO want the options exercised or not. At these levels they will have to produce something if they do need/want the money. That means today or tomorrow for an announcement. Interesting few days coming up.

[Dr_Who]

It would be interesting to see what NZO will do with all that cash. I would like NZO to buy out some of the under valued Aussie oilers and have an immediate exposure to their income stream and potential drilling reserves. Still a number of cheap oilers in aussie.

I think in the short term there will be some panic with option holders not wanting to convert and will sell down their holdings.

I ve also noticed that NZO revenue will drop in 2009 due to lower oil pumped. But 2010 revenue will be up again with gas coming on stream.

[Bilo]

I also believe that the more money at someone's disposal, less care is taken with it. Time will tell how NZO looks after it.

An observation I agree with 777 and it would be a major concern if NZO went on a buying spree when there is near field exploration and additional development to be done. The first hint of "largess" would see the share price crash IMO.

It doesn't hurt a junior oil company to be sitting on a sizeable pool of cash. Tap Oil (ASX.TAP) is a case in point. They have kept ~$100M in the bank which has enabled them to participate as good exploration opportunities have arisen. They have funded exploration out of Woolybutt's ever extending oil flows. True, they didn't do the exploration bit well for a long while but they have upgraded IT and personnel and have some brilliant exploration prospects now. Success takes time, contacts, luck, and lots of money in this industry. You don't get invited to participate without cash. So for me I would be happy if they just sat on the money for as long as it takes to find the right opportunities and continued to fund exploration out of Pike, Tui and Kupe earnings. I think DS has an experienced team that are not going to get sucked in to low probability drilling or acreage. :)

[upside_umop]

some nervous people out there now...
lets be honest though, this company would be better off without the option money.

[Corporate]

some nervous people out there now...
lets be honest though, this company would be better off without the option money.

In some respects i'm glad the price is dropping. Less options exercised, less dilutions of my holding.

However, I got itchy fingers and bought in at $1.60 against my better judgement.


Thinking about making a play on the options. It could be a bagger in a day or two

[bermuda]

some nervous people out there now...
lets be honest though, this company would be better off without the option money.

They will need at least $200 million to buy back PPP. NZO had to sell it for funding reasons.

This purchase will have a short payback time and give them 22.5% of Tui and surrounding permits. I think TR will tick this off as will the market.

Hey Macca, my pick of 149 getting closer by the day! lol

[Corporate]

maybe a few people with larger holdings should start selling small parcels to bring the price below $1.50

[croesus]

Those punters that were buying up opts at 12c or so.. will be hurting........will be interesting to see if the likes of ACC buy more......... a good chance to get a corner in NOG. if you have deep pockets.

[Nitaa]

As long as the sp trades around $1.48 - $1.52 then the big boys will love it. Deep pockets will allow them to snap up cheap options gaining them a cheap entry without impacting on the heads shareprice.

[777]

Those punters that were buying up opts at 12c or so.. will be hurting........will be interesting to see if the likes of ACC buy more......... a good chance to get a corner in NOG. if you have deep pockets.

Hurting no more than anyone who paid $1.62 for a head share. Only loss is when they go up and you failed to exercise the option.

[croesus]

No.. what I meant was... "punters" as in those who brought to on sell. ie 200 or 500 k of options they could never contemple exercising cos of the capital required.

[duncan macgregor]

They will need at least $200 million to buy back PPP. NZO had to sell it for funding reasons.

This purchase will have a short payback time and give them 22.5% of Tui and surrounding permits. I think TR will tick this off as will the market.

Hey Macca, my pick of 149 getting closer by the day! lol BERMUDA, Looks like i was over optimistic when i said the options were worth 5c. I think your minus 1c is closer to being right. I did think my $1-59 would be in the mix at one stage but who would have thought that i would pick to high a number. I expect you to be to high yourself. The SP price will downtrend this week with stop losses kicking in plus panic selling. Macdunk

[Sharp737]

Bermuda, do you really think NOG would have a go at PPP?

I know they needed the money before...I wonder.

Let's see, about another 40M barrels of oil at Tui (could be more in the upgrade coming) so PPP's stake is 10% = 4M bbl = US$134 x 4m x 1.33 (exchange rate) = NZ$712M Gross or thereabouts.

Don't know how much cash PPP has but should be good with about 1.2M bbl's worth after tax etc....Gotta be over NZ$50M eh...conservatively

And I suppose the Maitland Gas Field in WA is only a matter of time...

Still, it's hard to see NOG bidding for PPP given the past

[duncan macgregor]

[QUOTE=duncan macgregor;206712][QUOTE=duncan macgregor;204640][QUOTE=duncan macgregor;203386][QUOTE=duncan macgregor;202999][QUOTE=duncan macgregor;202415][QUOTE=duncan macgregor;201047]Competition to select NZO share price on conversion date June 30th
in the event of a tie the winner is the person with the correct score posting first
I will list you in posting order.
1,AMR 180c, 2, OILER 165c, 3,Macdunk 159c. 4,MATTYROO 158c.
5,SEAMUS 135c, 6,SERPIE 131c, 7, LIZ 120c, 8, STRAT157c.
9TRACKERS 168, 10, COLIN 170, 11,THE MACHINE 210c. 12,MALCOLM 200c.
13,SPOOK 172, 14,BIG BOB184c, 15,ZORBA 155c, 16, REMY 167c,
17 AMERICAN PSYCHO 175c 18 SHASTA 161c, 19RONTHEPOM 171c 20 PHAEDRUS 160.
21SHREWDY 169, 22 BERMUDA 149, 23 MORV 183c, 24 COALIE 188c
25 DIGGER 173c, 26 blank, 27 NITA 181c, 28 SUMMER NED 193c.
29 QOH 179c, 30 WK6332 225c 31 BALANCE $10-60 32 KS 162,
33 TOK3N 145c, 34 SHANE M 162.5c, 35CORRAN 156c, 36 MICK100 300c.
37 DSURF 154c, 38 SKEET 185c,39 MIBO 177c, 40 JAY 162c,
41 ZACMAN 187c, 42 GAMBLER33 115c, 43 ANUBUS144c, 44 BRUCETO9 164c.
45 romer 163c.46 HOOP 147c 47 RABBI 148c 48 ROTWEILLER 153c,
49 MINGEATHINAIOOS 150c,50 MANXMAN 195c, 51 MACDUFFY 146c, 52 BLOCKHEAD 198c,
53 777 226c,54 SWISSBOY 174c,55 AIRDALE166,56 CLIPS 178c,
57 PADDIE 196c,58 FOODEE 176, 59 BK152c,60 MPC182c,
61 STEVE 151,62 ONTHEMONEY 143, 63 LION 186, 64,TIM23 189c,
65 BOB C 190 66 RIF RAF 191c 67, OUT TO LUNCH 194 68 SEHNSUCHT888 192c,
69 PIETRADE 220c,70 ZAC 197c, 71,CAM 245C,72, CHALICE 214c,
73 GLENDOONIE 142c 74,UPSIDE_UMOP 159c,

[Nitaa]

[QUOTE=duncan macgregor;206712][QUOTE=duncan macgregor;204640][QUOTE=duncan macgregor;203386][QUOTE=duncan macgregor;202999][QUOTE=duncan macgregor;202415] The horses are into the straight heading for the finishing line with BERMUDA, MINGEATHINAIOOS,RABBI, in a good position with BALANCE AND MICK 100 being good weather types being lapped by the field. Still time to enter if you are not already in.Ever heard of a horse called Kiwi.

ps. how is the deciding price determined. Last trading day of the options or last trading day in June?

[bermuda]

[QUOTE=duncan macgregor;207051][QUOTE=duncan macgregor;206712][QUOTE=duncan macgregor;204640][QUOTE=duncan macgregor;203386][QUOTE=duncan macgregor;202999]Ever heard of a horse called Kiwi.

ps. how is the deciding price determined. Last trading day of the options or last trading day in June?

I hope it is the last trading day for the options. Because after that the Head Share flys.

[777]

"Competition to select NZO share price on conversion date June 30th"

From the top of Duncan's post.

[duncan macgregor]

[QUOTE=duncan macgregor;207051][QUOTE=duncan macgregor;206712][QUOTE=duncan macgregor;204640][QUOTE=duncan macgregor;203386][QUOTE=duncan macgregor;202999]Ever heard of a horse called Kiwi.

ps. how is the deciding price determined. Last trading day of the options or last trading day in June? NITA, The last sell price on friday at close is the winning number. I have heard of KIWI who trailed the field dead last in the Melbourne cup before storming home for a win. I was thinking more of BEATLE BOMB if you follow my drift. Macdunk

[Toddy]

[QUOTE=duncan macgregor;206712][QUOTE=duncan macgregor;204640][QUOTE=duncan macgregor;203386][QUOTE=duncan macgregor;202999][QUOTE=duncan macgregor;202415] The horses are into the straight heading for the finishing line with BERMUDA, MINGEATHINAIOOS,RABBI, in a good position with BALANCE AND MICK 100 being good weather types being lapped by the field. Still time to enter if you are not already in.

Can I put a place bet on only. I expect the NZO marfia will determine the final outcome.

$1.59

The sad side of this whole story is that the option exercise date was just too optermistic given the challanges faced by PRC. If the date had been December 08 then there would have been some very happy shareholders. Instead we have to put up with the same crap as when the OC's were exercised.

[Sehnsucht888]

ps. how is the deciding price determined. Last trading day of the options or last trading day in June?

An interesting question indeed. Macdunk chose neither...


NITA, The last sell price on friday at close is the winning number. I have heard of KIWI who trailed the field dead last in the Melbourne cup before storming home for a win. I was thinking more of BEATLE BOMB if you follow my drift. Macdunk

According to what the NZX is saying:
The last day of trading for NZOOD securities on the NZX will be Monday, 23 June 2008.
&
Monday, 23 June 2008 Trading Halt placed on NZOOD at close
of business.

So this competition is about the option price on a certain day. Not the final option price... Plenty of scope for manipulation there...

[duncan macgregor]

"Competition to select NZO share price on conversion date June 30th"

From the top of Duncan's post. I think the last day of trading the options is this coming friday. I intended that the share price be taken at the close of trading the options which is the only way to go. The share price after that will do whatever with the influence of the options gone. Macdunk

[duncan macgregor]

An interesting question indeed. Macdunk chose neither...



According to what the NZX is saying:
The last day of trading for NZOOD securities on the NZX will be Monday, 23 June 2008.
&
Monday, 23 June 2008 Trading Halt placed on NZOOD at close
of business.

So this competition is about the option price on a certain day. Not the final option price... Plenty of scope for manipulation there... If you are right then its monday 23rd of june when the last sell price of the heads is the number. When the options close to trading
whatever day it is then thats final. Why would i manipulate when i barred myself from winning the moment a prize was offered. Macdunk

[Sehnsucht888]

Bragging rights - Didn't you even state that ealier :-)

[Hoop]

[quote=Nita;207055][quote=duncan macgregor;207051][quote=duncan macgregor;206712][quote=duncan macgregor;204640][quote=duncan macgregor;203386]

I hope it is the last trading day for the options. Because after that the Head Share flys.

Bermuda... yes 2 weeks can be a long time and the NZO may fly high and quickly ..who knows what may happen and what unforeseen may happen....

....but:) ......NZO heads will only fly with big demand...with 2 weeks to go it is hard to see where this demand will come from....certainly won't be from the cashed strapped NZOGers

Will re-enter NZO when TA buy signals re-appear.

Hoop 147c :D

[duncan macgregor]

Bragging rights - Didn't you even state that ealier :-) Sorry i got it wrong might have gone down better with me. macdunk

[Bilo]

They will need at least $200 million to buy back PPP. NZO had to sell it for funding reasons.

This purchase will have a short payback time and give them 22.5% of Tui and surrounding permits. I think TR will tick this off as will the market.


I would be disappointed if cash was forked out for PPP - perhaps give them some of their own cash in the hand - but it would have to be an all script offer with NZO north of $2.50 for me and only if Tui is upgraded. Lets face it PPP has too many shares and needs to be consolidated & no ability to raise cash for any substantial development. A weak partner in anything...

[temptation]

I know that we all love Tui, but if NOG are going on a spending spree, then I'ld prefer to see them going after CUE rather than PPP in order to get involved with Maari..

[Nitaa]

Sorry i got it wrong might have gone down better with me. macdunkDuncan. Kindly repeat your message as it all encrypted and my computer keeps going down on me when i read it.

[foodee]

Competition to select NZO share price on conversion date June 30th
in the event of a tie the winner is the person with the correct score posting first
I will list you in posting order.
1,AMR 180c, 2, OILER 165c, 3,Macdunk 159c. 4,MATTYROO 158c.
5,SEAMUS 135c, 6,SERPIE 131c, 7, LIZ ?, 8, STRAT?. 7 and 8 were joking.
9TRACKERS 168, 9 COLIN 170, 11,THE MACHINE 210c.

Macdunk
Just to refresh memories.


cheers

[Joe King]

Hi Noggers.
I think TR will do ANYTHING! to get these oppies through. He will have a mountain of them and won't want them worthless. This is one Co. where BS works, and if that is what is needed, que sera. I reckon it will be very close... about .5 c close.

160.5

Great Comp Dunk.... good luck all.
JK

[Chippie]

I have just arranged a bank loan to convert 100K NZOD’s. I was going to sell them if I could get 12-15 cents but decided I will not give them away at current prices. To be honest I was banking on Momoho spudding and the Tui reserves upgrade before now.

I know a lot of other people that will convert rather than give them away at the current prices.

It is hard to see NZO remaining at current prices once the options are out of the way.

[duncan macgregor]

Duncan. Kindly repeat your message as it all encrypted and my computer keeps going down on me when i read it. NITA, i was being accused of manipulating the competition. I merely stated that since a prize was being offered i had removed myself from winning by donating my number to whoever was bright enough to work it out. I then said a sorry might have gone down better with me rather than insinuate that bragging rights would be enough to turn me into a crook. Anyway it seems i was wrong with friday being the last trading day for the options its MON 23rd so must eat humble pie for that. The winner is the person with the last sell price at the close of trading on monday. Anything might happen before then so good luck with your selections guys. macdunk

[Chippie]

I went to an investor presentation and listened to David S last month. He was very clear when he said that NZO would not use cash to acquire (companies or acreage) for the sake of growth. Any investment with NZOG cash would have to meet stringent criteria before it was invested. David also said that they have spent “a lot” of time over the past 4-6 months looking at acquisition possibilities and said that none (or almost none?) had meet the investment criteria.

It was great to hear that NZOG would not invest any money just for the sake of it. I guess the other short term possibility would be to reduce/retire the Kupe loan until a good opportunity comes up?

[Chippie]

Momoho has spudded. ORG have just announced on ASX. It is a encouraging release "most exciting Kupe prospect"

[bermuda]

I know that we all love Tui, but if NOG are going on a spending spree, then I'ld prefer to see them going after CUE rather than PPP in order to get involved with Maari..

This would be okay if you wanted to spend time in litigation with Todds ( Tweedie ). We have been through this sort of thing with Greymouth. Avoid.

[777]

Right on 5 o'clock.


NZO
17/06/2008
MINE

REL: 1700 HRS New Zealand Oil and Gas Limited

MINE: NZO: Exploratory Drilling starts at Momoho 1

Exploratory Drilling starts at Momoho 1
(PML 38416 Exploration Well Offshore Taranaki Basin, New
Zealand)

Origin Energy Resources (Kupe) Limited* ("Origin"), on behalf of the Kupe
Joint Venture,
advises that the ENSCO 107 has commenced drilling the Momoho 1 exploration
well at a
location six kilometres south east of the Kupe field.
Kupe Project Director Peter Ashford said that since the Kupe project was
approved in June
2006 Origin, as operator of the Kupe JV, has been looking for other
exploration
opportunities close to the Kupe facilities.
Extensive geological and geophysical investigations identified the Momoho
prospect as the
most exciting drilling candidate in the Kupe area.
It is believed that the Momoho prospect could contain either oil or gas,
possibly both. The
Momoho 1 well is located between previously drilled exploration well Kupe
South-4 (see
map), which found subcommercial volumes of gas and Kupe South-5, which found

subcommercial volumes of oil.
Mr Ashford said, "The well will take about 40 days drilling to reach its
target depth. If the
results are encouraging, further appraisal may be required."

Participants in the Kupe Gas Project are:
Origin Energy Resources (Kupe) Limited* (Operator) 50%
Wholly owned subsidiaries of Genesis Energy 31%
New Zealand Oil & Gas Limited (through its subsidiaries:
National Petroleum Ltd. 12.75%, Petroleum Equities Ltd. 1.25%
and Nephrite Enterprises Ltd. 1.00%) 15%
Mitsui E&P Australia Pty Ltd 4%

*a wholly owned subsidiary of Origin Energy Limited

For further information please contact:
Media - New Zealand:
Rory Newsam
Tel: +64 460 2386
Mobile: +64 27 295 3809

[bk]

I have just arranged a bank loan to convert 100K NZOD’s. I was going to sell them if I could get 12-15 cents but decided I will not give them away at current prices. To be honest I was banking on Momoho spudding and the Tui reserves upgrade before now.

I know a lot of other people that will convert rather than give them away at the current prices.

It is hard to see NZO remaining at current prices once the options are out of the way.

Same here - converted 60,000 and am arranging a margin loan for the rest. So fingers crossed for plenty of good news in the coming two months (Momoho, Tui upgrade, Pike first coal, and oil at $140+)

[upside_umop]

I would be disappointed if cash was forked out for PPP - perhaps give them some of their own cash in the hand - but it would have to be an all script offer with NZO north of $2.50 for me and only if Tui is upgraded. Lets face it PPP has too many shares and needs to be consolidated & no ability to raise cash for any substantial development. A weak partner in anything...

I wouldnt mind PPP, because as bermuda says, it will give a 22.5% stake in the JV permits. NZO and JV have stated how they like the potential leads in Taranaki. So all in all not a bad option...its just the price you would have to pay for them thats the problem?? Would AT be willing to let his stake go knowing what he knows about tui?...Maybe a merger would be better, this would give NZO a little entry to australia via PPP's permits there.

Too many shares? Isnt it the market cap that matters? They wont need to raise cash either with tui coming in...the cash they have on hand wouldnt be a problem...

As for Cue, it only has a 5% stake in Maari and will be producing at lower intial rates than tui is producing now.... What is the acerage like for them in rest of taranaki?

NZO could probably take out PPP with decent debt financing even without option money atm. Would provide much better leverage and return for the shareholder.

[dsurf]

I have been watching the numbers of options for sale everyday for some time and I dont know if its coincidence or not but there always seems to be just over 6 million shares left over at the end of everyday . Even more strange was the way they appeared last month-one day i looked and buyers outnumbered sellers many times the next day the market was aflood with sellers and yet there hadnt been any news.
Now several million options are sold every day and you would expect the number of sellers to dwindle but it stays the same at 6 million .
millions of these options are spread out at prices which clearly wont sell .
Would it be possible for a big buyer to deliberately create a false impression of selling pressure by putting some options up for sale at prices that wont sell in order to force those that need to sell in the next few days below those prices?
This way of course they could gradually accumulate at prices below that of a fair market .

The big boys have big pockets and will stack the Buy side shortly!!!

[Trent]

Some interesting comment on the proposed Saudi production increase

Commentary
11:16 AM, 17 Jun 2008 Robert Gottliebsen
The oil imbroglio
TOP News
RBA sees growth moderating 11:55 AM
Allco sells US wind project for $US325m 1:54 PM
Local stocks bounce on banks 2:29 PM
Dwelling unit starts up 2.4% 1:51 PM
Crane Group cuts 90 staff 11:15 AM

The Spectators
Gottliebsen: Overheated houses
Gottliebsen: Greens under fire
Kohler: Trigger-happy bankers
Barclays' capital gamble
Curiouser and curiouser


Many in the US still have not grasped the fact that the Middle East outside Iraq does not have the ability to lift oil production substantially. Emotion is now creeping in.

As you will see in our news report, US oil refiners said on Monday that they would not be interested in buying any additional Saudi oil unless the price was steeply discounted.

The Saudi’s would love to open up the valves to move the oil price down but they simply don’t have the capacity to do it (Peak oil gathers steam, June 10). And while the latest production increase will help in theory, it's not big enough to make a significant difference and might even fan more speculation.

The rapid price increase has also spurred demands from politicians to introduce curbs on so-called speculators in the oil futures markets. But the oil futures market is just too deeply integrated into the global economies for America to be able to restrict it.

The speculators are only likely to be curbed by much higher interest rates, which were looking more probable last night with widespread expectations that the European Central Bank will hike interest rates to fight inflation.

That sentiment hit the US dollar. But if the US reacts to similar inflationary pressure by lifting its interest rates we will then see the oil market tested (All hands to the pump, June 16).

Hamish Douglass (KGB Interrogation, 16 June) says that the amount of money that’s gone into indexed commodity funds since 2003 has risen from about $US16 billion to currently about $US260 billion. He believes that if US and European interest rates rise, the amount of money in the commodity trading pool will fall and bring down commodity prices, including oil.


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[zorba]

Will the oil price bubble stay up or collapse ??

Interesting article from Canadian paper:

http://ago.mobile.globeandmail.com/generated/archive/RTGAM/html/20080613/r-cover14.html

[digger]

Originally Posted by duncan macgregor
Competition to select NZO share price on conversion date June 30th
in the event of a tie the winner is the person with the correct score posting first
I will list you in posting order.
1,AMR 180c, 2, OILER 165c, 3,Macdunk 159c. 4,MATTYROO 158c.
5,SEAMUS 135c, 6,SERPIE 131c, 7, LIZ 120c, 8, STRAT157c.
9TRACKERS 168, 10, COLIN 170, 11,THE MACHINE 210c. 12,MALCOLM 200c.
13,SPOOK 172, 14,BIG BOB184c, 15,ZORBA 155c, 16, REMY 167c,
17 AMERICAN PSYCHO 175c 18 SHASTA 161c, 19RONTHEPOM 171c 20 PHAEDRUS 160.
21SHREWDY 169, 22 BERMUDA 149, 23 MORV 183c, 24 COALIE 188c
25 DIGGER 173c, 26 blank, 27 NITA 181c, 28 SUMMER NED 193c.
29 QOH 179c, 30 WK6332 225c 31 BALANCE $10-60 32 KS 162,
33 TOK3N 145c, 34 SHANE M 162.5c, 35CORRAN 156c, 36 MICK100 300c.
37 DSURF 154c, 38 SKEET 185c,39 MIBO 177c, 40 JAY 162c,
41 ZACMAN 187c, 42 GAMBLER33 115c, 43 ANUBUS144c, 44 BRUCETO9 164c.
45 romer 163c.46 HOOP 147c 47 RABBI 148c 48 ROTWEILLER 153c,
49 MINGEATHINAIOOS 150c,50 MANXMAN 195c, 51 MACDUFFY 146c, 52 BLOCKHEAD 198c,
53 777 226c,54 SWISSBOY 174c,55 AIRDALE166,56 CLIPS 178c,
57 PADDIE 196c,58 FOODEE 176, 59 BK152c,60 MPC182c,
61 STEVE 151,62 ONTHEMONEY 143, 63 LION 186, 64,TIM23 189c,
65 BOB C 190 66 RIF RAF 191c 67, OUT TO LUNCH 194 68 SEHNSUCHT888 192c,
69 PIETRADE 220c,70 ZAC 197c, 71,CAM 245C,72, CHALICE 214c,
73 GLENDOONIE 142c 74,UPSIDE_UMOP 159c,

Duncan Macgregor my old mate you must not change the rules. This competition has been from the start to select the SP on closing of 30 june 08. It is not nor has it ever been to select the value of the final NZOOD price. For this competition the options play a part but the final closing price on 30 june of the head share could well be different to what the options price + 150 is on final option trading date. Your opening sentence makes that very plain and we have to stick to the rules.
My 100 dollar wine prise goes to whoever gets the SP correct on closing of 30 june 2008,as per your opening sentence coppied above. Simple as that do not change the rules.Someone else has a competition for the options,but it is not this competition.

[digger]

Will the oil price bubble stay up or collapse ??

Interesting article from Canadian paper:

http://ago.mobile.globeandmail.com/generated/archive/RTGAM/html/20080613/r-cover14.html


Zorba,i read that article a few days ago and it struck me as one more of those IF,IF,etc stories. It either happens on time or it or it dosen't. I read it that some time ago the Saudies put out that story but now that the future has become the present and now they can not deliver. By the time this delayed field gets underway the one million will be not enough to make up for depletion elsewhere.It is a bit like the latest 300000 promised to Bush and the 200000 just promiced. Read that is heavy crude that is of little use.Guess we had better believe it when we see it.

[duncan macgregor]

Originally Posted by duncan macgregor
Competition to select NZO share price on conversion date June 30th
in the event of a tie the winner is the person with the correct score posting first
I will list you in posting order.
1,AMR 180c, 2, OILER 165c, 3,Macdunk 159c. 4,MATTYROO 158c.
5,SEAMUS 135c, 6,SERPIE 131c, 7, LIZ 120c, 8, STRAT157c.
9TRACKERS 168, 10, COLIN 170, 11,THE MACHINE 210c. 12,MALCOLM 200c.
13,SPOOK 172, 14,BIG BOB184c, 15,ZORBA 155c, 16, REMY 167c,
17 AMERICAN PSYCHO 175c 18 SHASTA 161c, 19RONTHEPOM 171c 20 PHAEDRUS 160.
21SHREWDY 169, 22 BERMUDA 149, 23 MORV 183c, 24 COALIE 188c
25 DIGGER 173c, 26 blank, 27 NITA 181c, 28 SUMMER NED 193c.
29 QOH 179c, 30 WK6332 225c 31 BALANCE $10-60 32 KS 162,
33 TOK3N 145c, 34 SHANE M 162.5c, 35CORRAN 156c, 36 MICK100 300c.
37 DSURF 154c, 38 SKEET 185c,39 MIBO 177c, 40 JAY 162c,
41 ZACMAN 187c, 42 GAMBLER33 115c, 43 ANUBUS144c, 44 BRUCETO9 164c.
45 romer 163c.46 HOOP 147c 47 RABBI 148c 48 ROTWEILLER 153c,
49 MINGEATHINAIOOS 150c,50 MANXMAN 195c, 51 MACDUFFY 146c, 52 BLOCKHEAD 198c,
53 777 226c,54 SWISSBOY 174c,55 AIRDALE166,56 CLIPS 178c,
57 PADDIE 196c,58 FOODEE 176, 59 BK152c,60 MPC182c,
61 STEVE 151,62 ONTHEMONEY 143, 63 LION 186, 64,TIM23 189c,
65 BOB C 190 66 RIF RAF 191c 67, OUT TO LUNCH 194 68 SEHNSUCHT888 192c,
69 PIETRADE 220c,70 ZAC 197c, 71,CAM 245C,72, CHALICE 214c,
73 GLENDOONIE 142c 74,UPSIDE_UMOP 159c,

Duncan Macgregor my old mate you must not change the rules. This competition has been from the start to select the SP on closing of 30 june 08. It is not nor has it ever been to select the value of the final NZOOD price. For this competition the options play a part but the final closing price on 30 june of the head share could well be different to what the options price + 150 is on final option trading date. Your opening sentence makes that very plain and we have to stick to the rules.
My 100 dollar wine prise goes to whoever gets the SP correct on closing of 30 june 2008,as per your opening sentence coppied above. Simple as that do not change the rules.Someone else has a competition for the options,but it is not this competition.DIGGER, i will go along with what you say. I was under the impression that the options stopped trading on the 30th at the start of the competition which was wrong. However it looks like people want the 30th of june not the day the options finish trading so will stand corrected. Besides it will give my $1-59 selection a better chance of coming in to take out the Auckland convention title. Sorry about the confusion i will get whoever wins on the 30th to E-MAIL the address to post your most generous prize to.
MAY THE FLEAS OF A THOUSAND CAMELS INFEST MY ARMPITS FOR BEING SO SILLY. Macdunk

[Lion]

closing price of NZO AD$1.23 A GOOD TOUCH HIGHER than nz--- may motivate nz nog --- sp tomorrow:)

Yes, also Pike up 6.5 in Oz in late trading, compared with down 1 here. That's after an announcement about consent for the railway loading.

This show's not over yet.

I reckon my guess in MacDunk's competition (186) might still be in with a chance on 30th. :)

Hey, well done, Duncan, a good apology like yours is good for the soul. :eek:
(a bit like constipation - hard to get it out sometimes, but you feel so much better when you do)

[trackers]

Bermuda,

Got a copy of Twlight in the Desert from public library today, great read so far.

Anyone else interested in Chch, theres a copy on the shelf still available at Fendalton :)

[Lion]

I returned my copy of Twilight in the Desert in the weekend. (probably the one you're reading, trackers) A great read, being vindicated day by day now as Saudi Arabia just can't crank up production to ease world shortages. Not with the type of oil the world wants, anyway.

Here's a quote from Brian Gaynor's article on TV1's breakfast show this morning . . .
"
. . .if there’s any company doing well in New Zealand, that is full of cash, it’s NZOG. It will make a profit in excess of $100 million this year, which is more than Fisher and Paykel Healthcare, Fisher and Paykel Appliances, Sky City ah, Sky TV and it doesn’t need the money, so it will be interesting to see how it uses that money . . . "

[Trent]

Supply Chain and $200 Oil

It hardly seems that long ago, but in 2005 I wrote a column called “Supply Chain and $100 Oil.” At the time, I believe oil prices had increased to more than $60 per barrel, Goldman Sachs analysts had just predicted we might see $100 per barrel oil soon.

Well that prediction turned out to be somewhat premature, but here we are. Those views were certainly more accurate than the predictions of many others who said in 2005 that oil would drop back to the $45 per barrel range. As oil went to $70 and then $80 per barrel in 2006 and 2007, many more said that wouldn’t last.

Gilmore Says:
Think about that for a second. It’s possible we could get a doubling from today’s level of staggeringly high fuel costs. The impact to supply chain strategy would be substantial.

--------------------------------------------------------------------------------
What do you say? Send us your comments here
This week, of course, the price is $107 per barrel or so. That’s up something like 65% from the start of 2007. It’s already causing havoc in our supply chains. Transportation costs are rising despite significant overcapacity in most truckload and less than truckload markets, as we’re stung by the fuel surcharges that have enabled the carriers to push all of the fuel risk on to shippers.

How long will it last, and where is it headed from here? If I knew that for sure, I’d be trading oil futures on a beach somewhere, but all of us in the supply chain need to start thinking through what the impact will be on our costs and operations if we go further north from here.

Legendary investor and oil tycoon T. Boone Pickens, who has made billions understanding the energy markets, said a couple of weeks ago he thought oil prices would drop back to $85 or so for awhile, due to economic slowdown, but had a real chance of getting to $150 per barrel by the end of the year.

Last week, the same Goldman Sachs analyst team now says prices could be headed as high as $200 if the world economy gets revved up again and/or any monkey wrench is thrown into the world oil supply.

Think about that for a second. It’s possible we could get a doubling from today’s level of staggeringly high fuel costs. The impact to supply chain strategy would be substantial.

I think it’s good to understand how we got here.

World oil production is basically flat, at something like 86 million barrels per day for a few years now. This is consistent with the “Peak Oil” theorists, who believe that oil production globally has or will soon hit a maximum and then begin to decline. Though there are some fringe elements sometimes involved in Peak Oil topics, there are also many knowledgeable people who agree, and we’re seeing whole industry conferences on the topic.
We are adding very little in the way of new oil reserves world wide.
The buffer between capacity and demand that used to exist is gone – just a million barrels per day slack or something, as India, China and other developing countries consume more and more oil and reserves and production don’t budge.
The reduction of this capacity slack naturally leads to general upward price pressures, and means the slightest supply disruption (let alone a major) sends prices soaring.
The price of oil is fundamentally unhinged now from core supply and demand, and is controlled basically by what are called futures traders. One expert recently said there was a $10-15 premium in oil prices from the futures trading versus core supply and demand factors.
So, let’s look at a number of factors. I am going to use $200 per barrel as a potential point, in part because as mentioned, that has now become the new upper target, and because it makes for some easy math in terms of doubling from the $100 level of late. I am also not considering the impact on the economy, which could/would be substantial.

Obviously, the first and probably largest impact is on transportation costs. In order, rising fuel costs impact air carriers the hardest, followed by trucking and then rail. I am not quite sure, but would think ocean would be similar to rail.

Transportation analysts at Bear Stearns believe rising trucking fuel surcharges are the key factor in the increased recent diversion they are seeing of trucking freight going to rail despite the favorable environment overall for companies in the TL market (See Quarterly Bear Stearns Shippers Survey Suggests Trucking Capacity Glut may be Reaching Bottom.)

I have recently spoken with both a high tech company and a consumer soft goods company that both moved most product by air, but which are looking at how they can make ocean shipping work in the face of rapidly rising air cargo costs.

On the trucking side, Tiffany Wlazlowski, press secretary for The American Trucking Associations, told me this week “that for the first time, carriers in some cases are telling us that fuel costs are exceeding labor [driver] costs.” She says that for truckload carriers, fuel costs can now be 25% or more of total operating costs.

Also consider that by my estimate, based on available data, oil costs represent about two-thirds of the price of a gallon of diesel fuel.

So, this means that if oil goes to $150 (a 50% increase), truckload shipping costs, however they get there (base rates or fuel surcharges), would rise about 8.5%. If it goes all the way to $100 (a 100% increase), TL costs would rise about 17% - an incredible number. Think of the impact on the bottom line of most shippers. For those interested, here’s how I got there for scenario 1: .25 (fuel as percent of TL carrier cost) x 50 (percent increase if oil goes to $150) x .67 (percent of oil in current diesel cost).

I am almost out of space, so we can’t take a much deeper dive than this here. But we will soon – Dr. David Simchi-Levi of MIT and software company ILOG, one of the most respected supply chain industry thought leaders, is working on some analytics models for SCDigest readers on what this might mean for supply chain network design and trade-offs among transportation, inventory and distribution costs.


This article is a few months old now but I found it interesting because it suggests that US$10-15 of the then oil price may be attributed to futures traders as opposed to the supply demand story. If this is correct it suggests that the so called bubble effect may be smaller than has been suggested and that a burst bubble would likely not lead to US$70 oil?

T ;)

[Trent]

Another view on the contribution of speculators to the oil price (60%)
T

http://www.financialsense.com/editorials/engdahl/2008/0502.html

In fact this is by far the best article that I have seen that explains the lack of regulation of the futures trade and consequences for the oil price

[Sehnsucht888]

NITA, i was being accused of manipulating the competition. I merely stated that since a prize was being offered i had removed myself from winning by donating my number to whoever was bright enough to work it out. I then said a sorry might have gone down better with me rather than insinuate that bragging rights would be enough to turn me into a crook. Anyway it seems i was wrong with friday being the last trading day for the options its MON 23rd so must eat humble pie for that. The winner is the person with the last sell price at the close of trading on monday. Anything might happen before then so good luck with your selections guys. macdunk

I think I now understand your coment Dunc, I was not directing this solely at you, but the more general audience. Although as I mentioned, I'm sure it was you that stated it was not beyond you to buy or sell to achieve your chosen price. if I am wrong, (too many pages to scan through), I am sorry, and apologise for any offense.
My comment was meant in a good natured fashion. I do not realisitically expect to win, whether it is the 23rd, or the 30th and am not fussed what manipulation goes on, provided in the end I don't lose real money!
Would have been nice to have scored a wine from digger, but I would probably have tried to toss in the difference on a shared 707 than taken a bottle to quaf at home..

[Sehnsucht888]

Originally Posted by duncan macgregor
Competition to select NZO share price on conversion date June 30th
in the event of a tie the winner is the person with the correct score posting first
I will list you in posting order.
1,AMR 180c, 2, OILER 165c, 3,Macdunk 159c. 4,MATTYROO 158c.
5,SEAMUS 135c, 6,SERPIE 131c, 7, LIZ 120c, 8, STRAT157c.
9TRACKERS 168, 10, COLIN 170, 11,THE MACHINE 210c. 12,MALCOLM 200c.
13,SPOOK 172, 14,BIG BOB184c, 15,ZORBA 155c, 16, REMY 167c,
17 AMERICAN PSYCHO 175c 18 SHASTA 161c, 19RONTHEPOM 171c 20 PHAEDRUS 160.
21SHREWDY 169, 22 BERMUDA 149, 23 MORV 183c, 24 COALIE 188c
25 DIGGER 173c, 26 blank, 27 NITA 181c, 28 SUMMER NED 193c.
29 QOH 179c, 30 WK6332 225c 31 BALANCE $10-60 32 KS 162,
33 TOK3N 145c, 34 SHANE M 162.5c, 35CORRAN 156c, 36 MICK100 300c.
37 DSURF 154c, 38 SKEET 185c,39 MIBO 177c, 40 JAY 162c,
41 ZACMAN 187c, 42 GAMBLER33 115c, 43 ANUBUS144c, 44 BRUCETO9 164c.
45 romer 163c.46 HOOP 147c 47 RABBI 148c 48 ROTWEILLER 153c,
49 MINGEATHINAIOOS 150c,50 MANXMAN 195c, 51 MACDUFFY 146c, 52 BLOCKHEAD 198c,
53 777 226c,54 SWISSBOY 174c,55 AIRDALE166,56 CLIPS 178c,
57 PADDIE 196c,58 FOODEE 176, 59 BK152c,60 MPC182c,
61 STEVE 151,62 ONTHEMONEY 143, 63 LION 186, 64,TIM23 189c,
65 BOB C 190 66 RIF RAF 191c 67, OUT TO LUNCH 194 68 SEHNSUCHT888 192c,
69 PIETRADE 220c,70 ZAC 197c, 71,CAM 245C,72, CHALICE 214c,
73 GLENDOONIE 142c 74,UPSIDE_UMOP 159c,

Duncan Macgregor my old mate you must not change the rules. This competition has been from the start to select the SP on closing of 30 june 08. It is not nor has it ever been to select the value of the final NZOOD price. For this competition the options play a part but the final closing price on 30 june of the head share could well be different to what the options price + 150 is on final option trading date. Your opening sentence makes that very plain and we have to stick to the rules.
My 100 dollar wine prise goes to whoever gets the SP correct on closing of 30 june 2008,as per your opening sentence coppied above. Simple as that do not change the rules.Someone else has a competition for the options,but it is not this competition.

Digger - Macdunk did say many weeks ago it was this friday, guess he dropped the first line on some reposts..

Will be interesting how that week goes from the 23rd. No options left to buy or sell, but possibly some money still to be raised to convert them...

[Hoop]

Hard to know what definition of spectulation these authors refer to.
my post #4139 has the same figure $10 -$15 as your post Trent

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Quote: #4139
Originally Posted by Hoop http://www.sharetrader.co.nz/images/buttons/viewpost.gif (http://www.sharetrader.co.nz/showthread.php?p=202160#post202160)
A question.....How much of this $130+/barrel is due to the Peak Oil factor and how much of it is due to speculative trading.......

I'll attempt to answer my own question. (post #3896)
An article from Marketwatch (http://www.marketwatch.com/News/Story/Story.aspx?column=Futures+Movers) today mentions a shift by Commodity spectulators away from crude oil to Natural gas.
Quote Neal Ryan, a manager at Ryan Oil & Gas Partnershave ..."is that the $10-$15 speculative trade in the oil price will flip into the other energy trades like gasoline and natural gas......."

Note: $125 and $120 are interesting figures as they are key support levels.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Trent....In my sub-conscious I do feel this $10/$15 figure is rather low and feel your 2nd post figure is closer to the mark....maybe somewhere in the middle.. eh

[digger]

DIGGER, i will go along with what you say. I was under the impression that the options stopped trading on the 30th at the start of the competition which was wrong. However it looks like people want the 30th of june not the day the options finish trading so will stand corrected. Besides it will give my $1-59 selection a better chance of coming in to take out the Auckland convention title. Sorry about the confusion i will get whoever wins on the 30th to E-MAIL the address to post your most generous prize to.
MAY THE FLEAS OF A THOUSAND CAMELS INFEST MY ARMPITS FOR BEING SO SILLY. Macdunk

Well done duncan .You have just gone up in my estimation.You made a mistake and acknowledged it then put it correct.You are now in very select company--you me and a too small handful of others.Frankly and truthfully the ability to repair a mistake and move on is a human handicap that i find wanting in the human race.I have never been really able to see why a misjudgment followed by repair is so hard. It is no big deal i make mistakes all the time[Get out of here wife,your support on that one is not required]
The next week could be very interesting.Big buyers now have a limited time to make their move.It is now or never for them.My 172 could be too high but it will be closer to that than it is today
Cheers.

[zorba]

.
PBS Nightly Business Report (from the US) is re-broadcast every night at 7:00 pm on the Stratos digital channel (satellite and terrestial). Provides a quick 1/2 hour snapshot of the US economy.

This evening (NZ: 17/06/08) they had two items relevent to price of oil .......

Check out the replay on:

http://www.pbs.org/nbr/wrapper/program.html

Once the webcast is streaming, use the slider to jump over the initial ads and announcements, to get to first item about oil trading on the Nymex -- note comment about "thin cushion" in oil supply chain.

Then use slider to go near the end of webcast to pick up last item -- Review and prospects for second half of year re the US economy ...... watch out for comments re "inevitable" Israeli strike on Iran which will "instantly" send oil above $200 / barrel .......

If Israeli strike then most likely before Bush leaves office.

With this kind of talk out of the US, I can't see oil less than $120 / barrel.

Z

.

[the machine]

The big boys have big pockets and will stack the Buy side shortly!!!

hope your right.

will be selling about 30,000 options on last trading day if it is worther it and it looks like the tui upgrade will not be out by then either.

2 months to do an assessment seems a very long time!

balance options might be converted on june 30 provided the upgrade is announced and is good.

IMO nzo should have pushed awe to either set this week as the date when upgrade should be announced, or made it known that the upgrade would not be issued until after stock market closes on june 30 [better aust tax outcomes in short term]

in other words they should have been clearer about when would be announced then the mixed messages sent thus far

earier DS said / implied well before end of month - for that reason we have not previously sold and if the price falls much further than will not sell any as not worth it - inturn nzo do not have the shares converted!

expect there will be many holders in similar position

M

[bermuda]

Well done duncan .You have just gone up in my estimation.You made a mistake and acknowledged it then put it correct.You are now in very select company--you me and a too small handful of others.Frankly and truthfully the ability to repair a mistake and move on is a human handicap that i find wanting in the human race.I have never been really able to see why a misjudgment followed by repair is so hard. It is no big deal i make mistakes all the time[Get out of here wife,your support on that one is not required]
The next week could be very interesting.Big buyers now have a limited time to make their move.It is now or never for them.My 172 could be too high but it will be closer to that than it is today
Cheers.

Digger,
I knew you would reply like that. Well done. Macca's OK, just has a different approach.

Cheers

[zorba]

.
Gazprom predicts oil prices of $250 per barrel .......

http://news.tradingcharts.com/futures/4/2/110086024.html

[croesus]

Like you Machine, sitting on more options then I need, fortunately they don't owe me a lot.. and happy to sit on them as a insurance.....would not be surprised if we get a spike in the next few days.... agree with your comment... would be helpfull.. to know when we will get more info..

[fish]

[QUOTE=the machine;207205]hope your right.


2 months to do an assessment seems a very long time!

DS did say mid june-I am expecting it this week .
I dont know aussie oil company tax rules nor for that matter nzx rules but I suspect they may have a rule about witholding price sensitive info .
Surely australian tax rules should not prevent nzo annoucing there own assessment.
Does anyone know whether failing to announce price senstive info is against nzx rules ?

Company management will hold options and if they use info unavailable to other shareholders in deciding to trade before options expiry or in deciding whether to convert it would be a capital offence in my opinion .

[bermuda]

Like you Machine, sitting on more options then I need, fortunately they don't owe me a lot.. and happy to sit on them as a insurance.....would not be surprised if we get a spike in the next few days.... agree with your comment... would be helpfull.. to know when we will get more info..

Croesus,
You had not better not sit on your options. They expire on June 30th. Your insurance wont work after this date.

Always sell your options not less than 3 months before expiry date.That is my rule.

Options, A temporary shareprice destroyer.

[the machine]

[QUOTE=the machine;207205]hope your right.


2 months to do an assessment seems a very long time!

DS did say mid june-I am expecting it this week .
I dont know aussie oil company tax rules nor for that matter nzx rules but I suspect they may have a rule about witholding price sensitive info .
Surely australian tax rules should not prevent nzo annoucing there own assessment.
Does anyone know whether failing to announce price senstive info is against nzx rules ?

Company management will hold options and if they use info unavailable to other shareholders in deciding to trade before options expiry or in deciding whether to convert it would be a capital offence in my opinion .

one could be excused for thinking that the planned date to reach a conclusion re tui upgrade is june 30, upon which it is released to the market - thus full compliance.

until a conclusion is reached then there is no information to release.

the timing of it all sucks.

the options we received for free - took a chance with hector & other drills - reached aud$10,000 value pre sub prime saga and now not worth very much.

will keep some incase tui upgrade is significant and released to market before close of trading on june 30. still find it incredible nzo chose june 30 - as a few weeks later for mid july expiry would have enabled shareholders to decide which tax year they sell in to finance the options, instead of having no choice.

M

[Mingeathinaikos]

Croesus,
You had not better not sit on your options. They expire on June 30th. Your insurance wont work after this date.

Always sell your options not less than 3 months before expiry date.That is my rule.

Options, A temporary shareprice destroyer.

I totally agree Burmuda, the 3 month rule is what I work too aswell... Held a shed load for the Hector drill, but managed to 'escape' unscathed by selling about 10 weeks ago.

My pick of $1.50 is not looking too bad, but some clarification on the comp end date is important, as I have a feeling that if it is the 30th, i'll be well out of the running.:)

[Corporate]

Alright so the price of NZO has been trending downward. I bought in at $1.60 and am starting to start thinking about a stop loss. What are other peoples thoughts?

[bk]

just as a matter of interest, I converted a number of options. The money was taken, and in the NZX Shareholders inquiry that quantity of options now shows as "Unavailable balance", as if they are taken but not converted. And no increase in the number of head shares I own. This situation has lasted for three days now, effectively blocking my access to the new head shares which I was planning to use for margin lending.

Can anyone shed some light on this? Do the new shares remain blocked for a certain period, or perhaps until 30/6 (I hope not)

[777]

just as a matter of interest, I converted a number of options. The money was taken, and in the NZX Shareholders inquiry that quantity of options now shows as "Unavailable balance", as if they are taken but not converted. And no increase in the number of head shares I own. This situation has lasted for three days now, effectively blocking my access to the new head shares which I was planning to use for margin lending.

Can anyone shed some light on this? Do the new shares remain blocked for a certain period, or perhaps until 30/6 (I hope not)


Give the share registry a call. I think it will just be timing issue though. They probably issue the new shares in batches once a week or so.

[trackers]

Alright so the price of NZO has been trending downward. I bought in at $1.60 and am starting to start thinking about a stop loss. What are other peoples thoughts?

Woah, hold on a minute, you're thinking of selling by way of a stop loss several day before the options expire? Oh god :eek:

[Casa del Energia]

Alright so the price of NZO has been trending downward. I bought in at $1.60 and am starting to start thinking about a stop loss. What are other peoples thoughts?

Hold. Try not to give in to fear and lock in the loss. (My last purchase was at $1.62 - but the rest of the market has been going belly up anyway -
so there would likely have been 'loss' anyway. Ces't la vie, Que sara, es nada. This drift in NZO is artificial, 200 million raised in a small country is a big ask and it seems that there's an army of folks out there acting like reef fish becuase they are really speculators rather than long investors)

By the end of the year - Noggers will be sipping champagne on the decks of the good ship 'Profit'.

[Hoop]

Alright so the price of NZO has been trending downward. I bought in at $1.60 and am starting to start thinking about a stop loss. What are other peoples thoughts?


Shephejame
Sounds like you entered into NZO without a strategy.

Buying in at the beginning of a weakness and now you are considering selling out at the end of the weakness.

I think you best plan is to hang on, except your timing was wrong and wait to see what happens after the NZOOD are converted.
This conversion will suck a lot of funds out of the small NZ exchange, but much less influence on the Aussie side so I expect these indigestion pains will be more so on the NZ side of the Transman. Watch the leads from the ASX, I think the momentum will come from that side of the ditch and will lift the NZO price here. Not sure how much of the worst kept secret (tui upgrade) is factored into the present price.

I assume all NZO needs is good news and the down-trending share-price will end

Maybe today's article from the NBR (http://www.nbr.co.nz/article/nz-oil-gas-poised-boom-30650#Scene_1) will help in your decision.


NZ Oil & Gas poised to boom

By Mitchell Hall
Tuesday June 17 2008 - 05:20pm

The price of shares in NZ Oil & Gas is currently undervalued according to Forsyth Barr analyst Andrew Harvey-Green.
He says shares in the company, which are currently trading at $1.52, are likely to reach $2.15 following an expected announcement about additional reserves at the Tui field.
Mr Harvey-Green says the company doesn’t need the cash, but could raise over $200 million as institutional investors wait till the last minute to exercise their options.
With the Tui field grossing $900,000 per day at current oil prices, the Kupe field set for completion in mid-2009, and commercial production for the Pike River Coal development scheduled to start in July, Mr Harvey-Green describes NZ Oil & Gas as a sound investment.

[bermuda]

Option Exercising is always a shareprice destroyer.

If Forsyth Barr value NZO at $2.15 then you can bet that NZO will go a lot higher than that.

[Dr_Who]

It seems like mum and dads are selling the house and the kids to buy some NZO..... LOL

[Casa del Energia]

It seems like mum and dads are selling the house and the kids to buy some NZO..... LOL

Always a warning sign - I get uneasy when that happens. Another one is the taxi driver test - - but so far no taxi driver
has mentioned or recommended NZO. ... The moment that occurs, I'll start to worry.

[fish]

arranging a mortgage as well as margin lending to ensure i can convert the options -looks like it only takes 4 days with the asb to arrange a mortgage--orbit-revolving- so only pay on the overdrawn bit-and only 10.95 % pa
Have to do this as i would be kicking myself if i sold options now at 3 cents plus conversion=$1 53 when i expect them to double-just like prc did-within a few months of the options ceasing .
As bermuda has pointed out for some time options are a temporary destroyer of share price-but the price will boom after .
Will try and displace digger as number 1 holder of nzo on this forum !

[NOCASH]

Fish i was thinking of doing a margin lending also, but i have got advice from others that, if you do that you are just gambling.. should never use other peoples money in the stocks.

[Sehnsucht888]

If you have an exit plan, it can't be too bad. We borrow money to buy houses which are stagnant now, but has been a good way to make money in the past. It depends on what you are investing in. Apartments - bad, houses - good (mostly). FTX - bad, FPH - marginal maybe, NZO - good (we all hope/expect anyway).

There is certainly risk. A big fire at TUI, mine collapse will hit hard. If things go to plan, then there is plenty of upside.
With Margin there should be an exit if things go bad enough, so a small loss should be worse case, big gains best case.

It all depends.....

[fish]

Fish i was thinking of doing a margin lending also, but i have got advice from others that, if you do that you are just gambling.. should never use other peoples money in the stocks.
Agree with them in principle .
Most things we do in life have risks . I have been buying shares for 20 years and have never borrowed to do so until now . Read the later broker reports on nzo-study their figures-in my opinion the downside for nzo is minimal and the upside massive .
I have never seen such a clear opportunity to buy into a share that is going to rise rapidly very soon .Hence i dont regard it as gambling but a carefully calculated investment .

I also will have a substantial holding in nzo -like digger -and want to make sure the money raised by the options are used for the good of the company and NZ

[Corporate]

Hold. Try not to give in to fear and lock in the loss. (My last purchase was at $1.62 - but the rest of the market has been going belly up anyway -
so there would likely have been 'loss' anyway. Ces't la vie, Que sara, es nada. This drift in NZO is artificial, 200 million raised in a small country is a big ask and it seems that there's an army of folks out there acting like reef fish becuase they are really speculators rather than long investors)

By the end of the year - Noggers will be sipping champagne on the decks of the good ship 'Profit'.

I was thinking more in terms of selling out to buy in at a lower price. I will continue to hold as NZO is screaming fundamentally.

[Casa del Energia]

I was thinking more in terms of selling out to buy in at a lower price. I will continue to hold as NZO is screaming fundamentally.

Oops. My misunderstanding. But Don't know if there is much more downside - hard to tell in these crazy times. Your paper loss looks about 6% at the mo - but when all the shouting is over and the smoke clears - should be looking at 25% gain in short order - - then it's all a matter of materiality, the gain over the next 8 weeks may be an order of magnitude over any manoevering one does now. - specially if you use a full service broker.

(Declaration - my habit of ignoring small fluctuations may explain why I'm still a pauper).

[duncan macgregor]

I would think that a person who is not a trader but more of a buy and hold type, would be very foolish to borrow to convert in a down trending market regardless of fundamentals. The fundamentals in a company like this comes second to market perceptive. The huge profits, with money pouring into the bank in this game gets reversed when they start searching for more in tomorrows market. If you think dividends is what its all about then you are in the wrong sector. Companies like this are a traders delight and a fundamentalists night mare.
The world markets are downtrending with the NZO share price swimming against the tide. The options being converted at this time is the very worst thing that can happen as far as a rising share price goes. They dont need the money, so why dilute your shares by adding more at $1-50 when most of you think the share price should be much higher.
There will be huge selling pressure after conversion with the blue eyed brigade being cash strapped forced to sell down.
The best thing that this company can do right now is buy as many of the options back at a few cents each and bin them. Macdunk

[Sehnsucht888]

Talk about hints....

AWE Monday, June 16, 2008


A three-year extension to the charter for New Zealand's Tui oil field's FPSO vessel Umuroa will allow at least five million barrels more oil to be recovered from the field, operator AWE Ltd reported.

AWE estimates the extension to the contract with Umuroa owner and operator Prosafe will bring the proven and probable reserve from known Tui reservoirs to at least 47 million barrels.

The fixed term of the charter has been extended by 3.4 years to the end of 2015. A further seven, one-year options to extend, will give a maximum term of 15.4 years from the date of first production — July 2007.

AWE says the four existing Tui field production wells continue to perform strongly. Oil production on the Umuroa has remained at close to 45,000 barrels a day despite rising water production.

Studies into modifications to the Umuroa to increase water handling capacity to 150,000 barrels a day and to accommodate the planned Tui 4H production well for 2009, are under way.

The cost of the charter for the financial year ending June 30, 2009, is forecast to be approximately US$61 million with the rate reducing annually.

A review of the Tui reserves by AWE is expected to be completed soon.


http://www.rigzone.com/news/article.asp?a_id=63088

UBS had an AWE Investor presentation today, but only mention that "reserves review to be announced shortly"

Come on, its mid June cough up some facts!

[manxman]

Talk about hints....

A review of the Tui reserves by AWE is expected to be completed soon.

UBS had an AWE Investor presentation today, but only mention that "reserves review to be announced shortly"

Come on, its mid June cough up some facts!

It really looks as though the upgrade information will be withheld until early July for reasons associated with Australian tax liabilities. This is not in accord with the continuous disclosure rules, so we may conclude that NZX is still in cowboy mode.

Mx

[tim23]

Duncan - you still don;t get it

1. If the options were due to expire in 2009 would your view on the dividend be different?
(am still waiting for your answer on that one)

2. In fact declaring the dividend gave strength to the share price which has enabled the options to be now "in the money"

3. Again I reiterate the options and the dividend are 2 unrelated issues, the options were issued some time ago, the fact that the company has been able to pay a dividend is simply good news!

I reckon thats simple to understand don't you?

[digger]

It really looks as though the upgrade information will be withheld until early July for reasons associated with Australian tax liabilities. This is not in accord with the continuous disclosure rules, so we may conclude that NZX is still in cowboy mode.

Mx

What do you mean it is not in accordance with the rules? The rules require any news to be released when available. Get it WHEN AVAILABLE. Well it just happens that they are still be processed to give YOU the most up to date assesment possible.Can you or anyone else prove that the figures are being withheld.The new tax year in Aus is on july 1st which is pure considence that the TUI update will be shortly thereafter. Amen i am sure you have heard it all before.

[zorba]

.
Tim,

U r wasting your efforts, with someone like McKlunk, ur dealing with an udderly consti.paited wa.nker, who has misjudged NZO so completely that he can't find anything good to say about the company, having bought high and sold low.

He so bitter and twisted, but like a rejected child, still pleads to be let back into the party by way of his option competition, this pavlovian attempt to be one of the Nogger "group", when in fact he now apparently holds no shares in the company.

This Mcklunk pantomine should be put before the local Phsycology Department for Deep and Meaningful Study into the warped effects on the investor mind of a ded beat who has missed the boat.

Get a Life Mcklunk !!!!!!!!

Z

.

[temptation]

Manxman,
IMO we really don't want the news until all the options are out of the way. If we are correct in our assumption that there is going to be an upgrade, then we have had a great opportunity to fill our boots with shares at a discount price. The only people who would benefit from good news now are those people who want to get rid of options that they can't exercise.
Anytime in July would be great timing for an announcement!

[tim23]

Thanks - the others want to agree with his stupid option/dividend theory, dam flunkies I say or how about Brain Dead?

[digger]

Boone speaks out on high prices
News agencies

Billionaire oil investor T Boone Pickens told the US legislature today that world crude production had peaked at about 85 million barrels per day, adding that oil prices are high, because supply has failed to keep up with demand.

The US alone has been using “21 million barrels of the 85 million and producing about seven (million) of the 21 (million), so if I could take just a minute on this point, the demand is about 86.4 million barrels a day, and when the demand is greater than the supply, the price has to go up until it kills demand", Reuters quoted Pickens as saying.

Pickens was testifying before Energy & Natural Resources Committee in the Senate, the US Congress’ upper house.

Pickens ruled out suggestions that speculative trading had contributed to oil price increases.

Asked about the role of institutional investors, Pickens said he does not “agree that that has anything to do with oil prices.

“It doesn’t have anything to do with traders on Wall Street or any place else,” he said.

End quote

Hoop that one is for you. About sums up what i think the effect of speculation is.
mostly i see it as an excuse to blame something to hide away for one more day the fear of having to face PO

[tim23]

There has been some debate re this but anyone who owns a house with a mortgage and owns shares is effectively leveraging these shares anyway aren't they so whats the difference?

[fish]

[QUOTE=manxman;207319]It really looks as though the upgrade information will be withheld until early July for reasons associated with Australian tax liabilities. This is not in accord with the continuous disclosure rules, so we may conclude that NZX is still in cowboy mode.

My brother will certainly agree-he calls the nzx the wild west and has all his investments overseas .
Suggest you contact the nzx and get their view on the matter .
Personally I have now arranged conversion of my options and dont mind when they announce it as less options would be converted and an announcement on 1st july would mean more effect on the head price as options are no longer an option for holders and non-holders . It would be unfair but not unusual for companies to withold information as who can prove this .

[fish]

There has been some debate re this but anyone who owns a house with a mortgage and owns shares is effectively leveraging these shares anyway aren't they so whats the difference?

The best difference Tim is that the interest paid on my property mortgage security ,will now and forever be tax deductible .
I am mortgaging property so the bank will lend me money to buy shares . The reason I am buying shares is for dividend income-which nzo have signalled they will continue to provide if conditions allow . I do not intend to trade these shares this year definately and have no intention or need to do it in the future-but this could change-who knows .

Margin lending interest is also tax deductable if you buy for dividend income.

So it makes far more sense to borrow to buy shares than to buy houses

[Sehnsucht888]

Enquiry Question: Wasn't the information available and should have been released in June?

Answer: Our proof reader was on holiday, so we couldn't risk something not checked being released. On a plus note, their kneecaps are heeling better than expected, and they seem to be growing another tongue so this should be available shortly.

[the machine]

Enquiry Question: Wasn't the information available and should have been released in June?

Answer: Our proof reader was on holiday, so we couldn't risk something not checked being released. On a plus note, their kneecaps are heeling better than expected, and they seem to be growing another tongue so this should be available shortly.


one would hope nzo would take these comments onboard and push awe to speed up the process re reaching a conclusion for tui upgrade

M

[Hawke]

The best difference Tim is that the interest paid on my property mortgage security ,will now and forever be tax deductible .
I am mortgaging property so the bank will lend me money to buy shares . The reason I am buying shares is for dividend income-which nzo have signalled they will continue to provide if conditions allow . I do not intend to trade these shares this year definately and have no intention or need to do it in the future-but this could change-who knows .

Margin lending interest is also tax deductable if you buy for dividend income.

So it makes far more sense to borrow to buy shares than to buy houses

Borrowing to buy any shares for an expected capital gain (or unexpected loss) is also fully tax deductable- Trading. I have done small mortgage top-ups when needed to buy shares.
YOU cannot beat homeloan interest rates. (well- students now can!!)

Hawke.

[bermuda]

Boone speaks out on high prices
News agencies

Billionaire oil investor T Boone Pickens told the US legislature today that world crude production had peaked at about 85 million barrels per day, adding that oil prices are high, because supply has failed to keep up with demand.

The US alone has been using “21 million barrels of the 85 million and producing about seven (million) of the 21 (million), so if I could take just a minute on this point, the demand is about 86.4 million barrels a day, and when the demand is greater than the supply, the price has to go up until it kills demand", Reuters quoted Pickens as saying.

Pickens was testifying before Energy & Natural Resources Committee in the Senate, the US Congress’ upper house.

Pickens ruled out suggestions that speculative trading had contributed to oil price increases.

Asked about the role of institutional investors, Pickens said he does not “agree that that has anything to do with oil prices.

“It doesn’t have anything to do with traders on Wall Street or any place else,” he said.

End quote

Hoop that one is for you. About sums up what i think the effect of speculation is.
mostly i see it as an excuse to blame something to hide away for one more day the fear of having to face PO

Hi Digger,

When you do the research as Pickens' has done, you know that oil goes higher. Ok it will be a bit volatile, but oil goes hiher.

[Hoop]

Boone speaks out on high prices
News agencies

Billionaire oil investor T Boone Pickens told the US legislature today that world crude production had peaked at about 85 million barrels per day, adding that oil prices are high, because supply has failed to keep up with demand.

The US alone has been using “21 million barrels of the 85 million and producing about seven (million) of the 21 (million), so if I could take just a minute on this point, the demand is about 86.4 million barrels a day, and when the demand is greater than the supply, the price has to go up until it kills demand", Reuters quoted Pickens as saying.

Pickens was testifying before Energy & Natural Resources Committee in the Senate, the US Congress’ upper house.

Pickens ruled out suggestions that speculative trading had contributed to oil price increases.

Asked about the role of institutional investors, Pickens said he does not “agree that that has anything to do with oil prices.

“It doesn’t have anything to do with traders on Wall Street or any place else,” he said.

End quote

Hoop that one is for you. About sums up what i think the effect of speculation is.
mostly i see it as an excuse to blame something to hide away for one more day the fear of having to face PO

Digger...yep to blame something other than the truth about PO hits the nail on the head.....Trying to make sense out of these commodity markets is just about impossible...everyone it seems is talking BS trying to out do their counterparts...here is another dimension why the oil price is high.......more smoke and mirrors.
The joke at the end is the only thing I understand in this article :(



http://i.mktw.net/newsimages/news/dreds/columnist/hulbert_67x67.gif
MARK HULBERT
Oil isn't free

Commentary: Price vulnerable to factors other than supply and demand



By Mark Hulbert (http://www.marketwatch.com/news/mailto.asp?x=109+104+117+108+98+101+114+116&y=Mark+Hulbert&z=marketwatch.com&guid=%7Bd0b91e94-0184-4106-95ab-00071ce87dc1%7D&siteid=mktw), MarketWatch
Last update: 11:41 p.m. EDT June 17, 2008
http://i.mktw.net/mw3/community/images/btns/icons/site/comments.pngComments: 30 (http://www.marketwatch.com/news/story/thoughts-about-bubble-oil/story.aspx?guid=%7BD0B91E94%2D0184%2D4106%2D95AB%2 D00071CE87DC1%7D#comments)




ANNANDALE, Va. (MarketWatch) -- Is the oil market at $135 per barrel forming a bubble, vulnerable to being popped like Internet stocks did in March 2000?


What would be your answer to this question if the price of a barrel of crude rose to $250, which some serious analysts recently have begun to predict?
Not surprisingly, newsletter editors have lots of conflicting answers to these questions.
But there is one set of issues that gets relatively little attention in this debate over oil's true price: The oil market is not as unfettered as we might otherwise hope or think. To that extent, the laws of supply and demand do not play the same roles as they do for securities whose markets are freer.
One adviser who has focused on these issues is John Dessauer, editor of the Investors World newsletter. In a recent communication to subscribers, he discussed the impact on the price of oil of the Commodity Futures Modernization Act, which Congress passed in December 2000. One consequence of that legislation, according to Dessauer, is that "the oil market has been grossly distorted."
By how much?
Dessauer estimates that if the government rolled back the regulatory changes made in that legislation, oil's price could fall back all the way to $80 per barrel. That would represent a 40% drop from where crude closed on Tuesday.
Dessauer's analysis should give pause to investors and traders alike. A market that could fall by that much for reasons having nothing to do with underlying fundamentals is not the kind of market that your Economics 101 textbook had in mind.
A possible comeback to Dessauer's analysis has to do with the role that arbitrage should be playing in stabilizing the oil market. After all, if oil's price is even close to being in a bubble, then why wouldn't arbitrageurs load up their portfolios with huge short positions in crude, poised to realize huge profits if and when oil's price dropped? At least in theory, their short selling should have already tempered oil's price rise and made it less vulnerable to the kind of market break Dessauer discusses.
The answer is that arbitrageurs do not play the role in practice that theory says they would. In practice, the arbitrage role is mostly fulfilled by a relatively small number of institutional investors such as hedge funds, which invest other peoples' money and often are highly leveraged. For both reasons, according to researchers who have studied arbitrageurs' behavior, they cannot afford to hold onto a short sale if it takes too long for it turn a profit.
As John Maynard Keynes famously once put it, "the market can remain irrational longer than you can remain solvent."
If you have any doubt about the wisdom of Keynes' comment, just remember Long Term Capital Management, which went bankrupt in 1998 with investments that -- if held long enough -- would eventually have been profitable.
What role, then, do arbitrageurs actually play in practice? According to a famous study conducted in the mid 1990s by Harvard economist Andrei Schleifer and University of Chicago professor Robert Vishny, they more often become momentum players rather than hedgers: Rather than betting against an apparently obvious mispricing, they often will bet that a mispricing will continue and become even more extreme.
Far from being part of the solution to market mispricing, in other words, they become part of the problem.
It reminds me of a joke: An oilman dies and, upon ascending to the Pearly Gates, is told by St. Peter that, while he deserves to get into heaven, can't go in because there already are too many oilmen in heaven. The recently deceased asks St. Peter for an opportunity to have a minute to talk to those other oilmen and wonders, if he can convince any of those others to leave, whether he can make it into heaven.
St. Peter says sure.
A minute or two later, there is a stampede of oilmen away from heaven. St. Peter, amazed, asked what the oilman's trick was. It was easy, he said: He simply announced that oil had been discovered in hell.
Amazingly, however, the oilman declined the promised invitation to enter Heaven, and instead began following the stampede. Why, St. Peter asked?
Because, the oil man responded, you never know -- the rumor about oil in hell just might be true. http://i.mktw.net/mw3/News/greendot.gif

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.

[Mingeathinaikos]

one would hope nzo would take these comments onboard and push awe to speed up the process re reaching a conclusion for tui upgrade

M

This is a classic case of expecting a company to do what is right for you, the individual..... which crops up about once every 2 pages on this site. Similar to the 'extend the options idea because they aren't in the money'.....

Have you thought about the flipside, the NZO holders without NZOODs that may not want the options converted? I'm more than happy if the tui upgrade is made post 30th June, and I won't be the only holder thinking that....

[duncan macgregor]

We keep hearing about peak oil on this site by people who expect that this will somehow benefit NZO in the long term. NZO right now is it its self at a peak oil stage, with everything being accounted for by this on going auction the share markets latest pricings. We know that they have a great share in PIKE, which is a coal mine expected to reduce in size by about one fiftieth each year, making it worth half as much in 25 years. The oil right now filling the bank up with great dollops of cash at the moment is a much shorter term prospect, which will diminish rapidly in the shorter to medium term.
NZO have to get back to basics, and find more or it will simply fade away. To find more is a high risk costly gamble, which will require all the cash in the bank, and probabely more to boot.
They gave out a dividend to please the thickoes that dont understand the business, then diluted the share price back with options to raise more money, plus give them a bigger share base. The people that do the fundamentals saying the company has this in the bank, plus that in the ground so therefore the share price must be worth such and such dont understand how the market works.
Its similar to a house auction, this share market, its all in the eye of the beholders perception of its worth, which has very little to do with its fundamental worth.
In a rising market you might expect to get a higher price than its fundamental worth, while in a falling market you will get paid much less, making the fundamental worth in most markets a very poor yardstick to base a decision on. Its market perception of worth that counts, if NZO come up with some exciting new prospects then its worth will go up, if not then pick the top if you are smart enough and get out. Macdunk

[Dr_Who]

Hey McDunk, I recall you were saying same thing about PRC and NZO when it was below $1.00 and I was averaging down my buying of both stocks. Now the stocks are at $1.53 and $2.00 you are still going on and on. Give us a break mate.

[Wilkins_Micawber]

Still going strong :-) ... update on TUI production to date, from NZOG website ...
Total production up to 18 June 2008: 13.95 million barrels. 13.7 million barrels have been shipped.
NZOG's share of production to date: approximately 1.75 million barrels.
14 million barrels will be reached tomorrow ....

[Sehnsucht888]

The ABN AMRO investor report shows the output vs expected. Pumping out twice as much as expected constantly.

[777]

The ABN AMRO investor report shows the output vs expected. Pumping out twice as much as expected constantly.

Does this mean that the expected flow was a too conservative estimate or is this field actually better than could have been expected.

Can you post the Investor report to the thread?

[Sehnsucht888]

Here is the link for the briefing...

http://www.nzog.net/news/2008/ABN%20Amro%20Investor%20Briefing%20June%202008.pdf

[Chris Roberts]

There have been some unwise and unfair comments on this thread in recent days, regarding the Tui field reassessment which is currently underway.

Here are a couple of facts to keep in mind:
AWE is the operator of the Tui field and is carrying out the reassessment.
At this point in time, NZOG has been given no information by AWE.

When NZOG receives any material information, it will be released to the markets.

[manxman]

There have been some unwise and unfair comments on this thread in recent days, regarding the Tui field reassessment which is currently underway.

Here are a couple of facts to keep in mind:
AWE is the operator of the Tui field and is carrying out the reassessment.
At this point in time, NZOG has been given no information by AWE.

When NZOG receives any material information, it will be released to the markets.

Fair comment Chris. My apologies.

Mx

[bermuda]

Rest assured that NZO has an outstanding future .

Tui is producing well above expectations and possibly two more holes are to be drilled into it.

Kupe , an unrecognised gem, which will carry NZO for 15 years plus.The liquids are over two thirds its value.

Pike, to become one of the most secure suppliers of world class coking coal . The shareprice of PRC is about to undergo a huge upgrading. The Aussie analysts have hardly got it on their radar.Watchout.

MacDunk....you really need to get real when commenting on NZO. Cant you see what's happening?

[Hoop]

There have been some unwise and unfair comments on this thread in recent days, regarding the Tui field reassessment which is currently underway.

Here are a couple of facts to keep in mind:
AWE is the operator of the Tui field and is carrying out the reassessment.
At this point in time, NZOG has been given no information by AWE.

When NZOG receives any material information, it will be released to the markets.

I stand to be corrected as this post is off the top of head and I could be wrong.....but I remember reading somewhere that the tax laws in Aussie state that known reserves are taxed.
If that is the case, then I assume shareholders can expect re-evaluation of the oil reserves to be conservative and understated.
Also as the tax year in Oz ends on 30th June, it wouldn't surprise me to see the reserve revaluation to appear early in July, and not before.

Also on a fundamental issue...I would not value the $200M received from the 135,648,503 NZOOD as $200M. That money and other monies in the coffers carries a risk factor. Its impossible to determine what the true value of that money is because it could:-
On the extreme positive side of the coin make $ billions more.:D:D
On the extreme negative side lose the lot down duster wells.:(:(
T/o companies that many turn out to be an unwise/wise move.:(:D
Be taken over by another hostile :mad:
Or a number of other possible scenarios:)

Honestly... I don't have total faith in the management of NZO to be worth mortgaging my house over. It wasn't that long ago (6 months) that share trader posters were mentioning how bad this management lot were...:p
Don't get me wrong..the share-price is undervalued fundamentally but this is a company which is classified as a high risk company and obviously there will be a variable risk factor component built in to its share-price.

Disc: will buy in when the TA fires buy signals... presently waiting..noticing some big volumes moving this morning and the share-price is steady.. this is an encouraging sign

[Chalice]

Hoop,

Whilst mortgaging your house is a big step I'm very surprised you are using posters as (part of) a benchmark of your decision making process - especially given the credence some of the posts on this forum attracts... Personally I think NZOG management have done a pretty damned good job of late, especially given their junior position in the production and development partnerships.

Can you please indicate what makes this company "high risk" at present, why an addition of 200 mill liquidity would increase the risk of take over and given historical strike rates, increased understanding of the Taranaki environment and increasingly attractive developmental/exploratory leads would mean 200mill down dry tubes?

Having a look at the current vol/SP, is your TA sparking up yet?

[Hoop]

Hoop,

Whilst mortgaging your house is a big step I'm very surprised you are using posters as (part of) a benchmark of your decision making process - especially given the credence some of the posts on this forum attracts... Personally I think NZOG management have done a pretty damned good job of late, especially given their junior position in the production and development partnerships.

Can you please indicate what makes this company "high risk" at present, why an addition of 200 mill liquidity would increase the risk of take over and given historical strike rates, increased understanding of the Taranaki environment and increasingly attractive developmental/exploratory leads would mean 200mill down dry tubes?

Having a look at the current vol/SP, is your TA sparking up yet?

I'm very surprised you are using posters as (part of) a benchmark of your decision making process ... I listen to everyone and analyse. Remember that a market is a group of people made up of all sorts and they operate in group behaviour patterns. If as a group they think the management is bad the share price will suffer even though their thinking may be wrong and the management is actually excellent.

Personally I think NZOG management have done a pretty damned good job of late, ...Don't get me wrong ..I agree whole heartily...may not be to the good of the shareholder though. As oil producers need money to survive they seem to be able to exact money from shareholders every-time when called upon..10 out 10 in that department. PR department is variable ranges from very good when money is needed to couldn't give a **** at other times. Managing the company ? yep they co-ordinate well with their partners. Looking after their shareholders interests are sadly lacking, too much self-interest. Not sure able financial responsibility as NZO has only just come into surplus...so we will see won't we?

Can you please indicate what makes this company "high risk" at present.
Oil producers are always classed as high risk investments, its the nature of the business that they operate within. Costs are high and getting higher, a lot can go wrong, high cash-flow when the goods (oil) are produced and sold ...usual scenario high risk high reward.

why an addition of 200 mill liquidity would increase the risk of take over and given historical strike rates, increased understanding of the Taranaki environment and increasingly attractive developmental/exploratory leads would mean 200mill down dry tubes?...just used balanced but extreme examples to clarify my points...also mentioned other scenarios in between they may happen....we don't know the future so I don't dwell on this part too much in my decision making to invest..just be aware of all possible scenarios that could happen... the pluses verses minuses analysis principles

Having a look at the current vol/SP, is your TA sparking up yet?
Not enough to have me jumping in yet
Sadly my TA machine is not as good as Phaedrus's metastock.
My limited analysis is up to yesterday and the only sign I see that shows encouragement is the turning OBV trend. I have my eye on the Commodity channel index this is swinging back up towards the -100 if it rises above that figure that will be another encouraging sign. The rest I have looked at is showing no buy signs yet.
Today actions on the market seem positive in light of a overall bad day.

[Chalice]

Thanks for the great reply Hoop - very comprehensive!!!

Couple of points I'd make - without purposefully being pedantic:

Sometimes its good to be a sheepdog, but I would think the institutions are becoming a lot more influential than the NZOG faithful.
As oil producers are high risk then raising money to explore/grow/survive for the future is to the benefit of the company & any capital raising must be in the best interest of current shareholders? Ultimately from my experience looking after your own interests is best served by keeping shareholders happy!
NZOG has one of the lowest cost bases/best ROI in the world and will continue to do with Tui/Kupes' current and proposed developments and tie-ins to potential future developments.
Point taken on t/o scenarios
Agreed re: T/A + Phadedrus - but don't miss the boat - I'm sure you won't!!

[Corporate]

The ABN AMRO investor report shows the output vs expected. Pumping out twice as much as expected constantly.

Could you post a link to this pleasE?>

[777]

Could you post a link to this pleasE?>


See post 4618.

[blockhead]

Big numbers of heads and OD's changing today, damn near 5% of total options traded, 2m heads gone through. One of the biggest days for a while.

[Casa del Energia]

Big numbers of heads and OD's changing today, damn near 5% of total options traded, 2m heads gone through. One of the biggest days for a while.

And the price is shuddering up plus PRC is past $2 again. The technical analysts out there will be rattling thier abacuses again.

[AMR]

I'm not terribly clear on the new accounting regulations, but in the next quarterly will NZO have to report PRC's capital gain as profit? Will they have to pay tax on this capital gain?

[Corporate]

I'm not terribly clear on the new accounting regulations, but in the next quarterly will NZO have to report PRC's capital gain as profit? Will they have to pay tax on this capital gain?


Nope as it is an unrealized gain

[neopole]

with only 2 trading days left for nzood's, is anyone still holding on AND not going to convert or sell at .05c?
I still have my bundle of oppies and refuse to give them away at these prices, and i cant afford to convert either.
but i have worked out that a 1 cent rise in head share price easily covers my loss if i let the oppies lapse........... so who losses? the big boys manipulating the sp to get bargin prices on the oppies ....... and not getting mine, or me for taking a small lose and not adding to the dilution of the headshares?
anyone else going to let the oppies lapse?

[bermuda]

with only 2 trading days left for nzood's, is anyone still holding on AND not going to convert or sell at .05c?
I still have my bundle of oppies and refuse to give them away at these prices, and i cant afford to convert either.
but i have worked out that a 1 cent rise in head share price easily covers my loss if i let the oppies lapse........... so who losses? the big boys manipulating the sp to get bargin prices on the oppies ....... and not getting mine, or me for taking a small lose and not adding to the dilution of the headshares?
anyone else going to let the oppies lapse?

Even though I took 149 cents in the competition I still always thought that the oppies would be converted. I even, ( I think mistakenly), predicted that it would be about a 95% take up but now I realise that there could be quite a swag who just wont be bothered and let them lapse.

And unfortunately they wont be able to avail themselves of one of the greatest bargains currently available on the NZX. ( the only others are PPP and PRC )

[Casa del Energia]

I'm not terribly clear on the new accounting regulations, but in the next quarterly will NZO have to report PRC's capital gain as profit? Will they have to pay tax on this capital gain?

Talking about the International Financial and Reporting Standards (?) - Does't come within any reporting ambit. (Exception - companies often have two reports created - one for tax and an ad-hoc when going to the bank - it is legitimate as long as the intent it is clear.

[Lion]

There seems to be a big range of responses to these interesting times with options about to expire.

Neopole, I won't sell them at 5c either. But I do have sell orders in at 6c, also 8, 12 and 15c. Time's running out, but there could still just be a positive announcement. I'm happy with my own mix of risk/reward. It's all fun.

I bought 20,000 on Tuesday at 2.5, and have more than doubled that - oh, I suppose I have to say, on paper!
And I'm exercising 15,000 with margin lending.
If I had more spare money I'd exercise more.

So I could well let many of mine expire.

I reckon this is all small stuff compared to the big increases coming for the share price in the next couple of months. I hope to flick on my exercised oppies and quit the margin lending fairly quickly.

I can't see how there can't be a big appreciation in the near future, barring some major world financial meltdown. The upside far exceeds the downside, in my opinion.

[Corporate]

Talking about the International Financial and Reporting Standards (?) - Does't come within any reporting ambit. (Exception - companies often have two reports created - one for tax and an ad-hoc when going to the bank - it is legitimate as long as the intent it is clear.


Sorry I don't understand what you are saying. NZO are required to report under NZIFRS (previsously NZGAAP). Financial assets and liabilities are treated very differently.

[BigBob]

Neopole

I too am holding more options than I'm planning to exercise and won't sell all the surplus ones either... I'm going sell the bulk either tomorrow or Monday but will hold onto about 50000, of which I plan to convert about half - however, if there's a significant shift upwards in the share price after Tuesday when the options can't be traded any longer, I can afford to convert all 50000 and will do so... otherwise I'll let some lapse...

[Casa del Energia]

Sorry I don't understand what you are saying. NZO are required to report under NZIFRS (previsously NZGAAP). Financial assets and liabilities are treated very differently.

Yes - the IFRS changes presentation of accounts - and yes, the financial position looks different -- so what larger companies now have to is a reconciliation for tax purposes (beucase the tax rules don't change) - so again the tax position does not change.

[Paddie]

Neopole

I too am holding more options than I'm planning to exercise and won't sell all the surplus ones either... I'm going sell the bulk either tomorrow or Monday but will hold onto about 50000, of which I plan to convert about half - however, if there's a significant shift upwards in the share price after Tuesday when the options can't be traded any longer, I can afford to convert all 50000 and will do so... otherwise I'll let some lapse...

Why would you let them lapse when you can sell them on market for around 5c today (assuming you have brought the OD's).

The head share price is going to take off regardless of whether you exercise or not.

So why not take the $$$$$$$$$$$$

Paddie

[fish]

with only 2 trading days left for nzood's, is anyone still holding on AND not going to convert or sell at .05c?
I still have my bundle of oppies and refuse to give them away at these prices, and i cant afford to convert either.
but i have worked out that a 1 cent rise in head share price easily covers my loss if i let the oppies lapse........... so who losses? the big boys manipulating the sp to get bargin prices on the oppies ....... and not getting mine, or me for taking a small lose and not adding to the dilution of the headshares?
anyone else going to let the oppies lapse?

You must find a way to convert-there are many options to raise money and all interest will be tax deductable.
You still have time to create a mortgage or increase a pre-existing one.Margin lending facility with you converting the options on 30th june is easy to set up (mine now looks really good with a massive trading account balance-will change to near nil next week -i think asb are converting their nominee account options at end of next week)

NZO gross earnings ,with tapis at us 142 nz/us under 76 cents ,are at a record high-well over a million dollars per day .
3rd quarter report in july will hit the headlines with such a massive increase in profit which looks as if it will be sustained .$3 sp is possible by xmas .
I doubt if the tui upgrade will tell the whole story .
Momoho is looking very promising.
Its all exciting and not to be missed

[Paddie]

You must find a way to convert-there are many options to raise money and all interest will be tax deductable.
You still have time to create a mortgage or increase a pre-existing one.Margin lending facility with you converting the options on 30th june is easy to set up (mine now looks really good with a massive trading account balance-will change to near nil next week -i think asb are converting their nominee account options at end of next week)

NZO gross earnings ,with tapis at us 142 nz/us under 76 cents ,are at a record high-well over a million dollars per day .
3rd quarter report in july will hit the headlines with such a massive increase in profit which looks as if it will be sustained .$3 sp is possible by xmas .
I doubt if the tui upgrade will tell the whole story .
Momoho is looking very promising.
Its all exciting and not to be missed




I am with you Fish.

I have raided every piggy bank that I can to convert, and will be posting in my bank cheque tomorrow.

Off for a holiday on Monday and am happy with the choice I have made.

Paddie

[STRAT]

Its going to be fun teasing the blue eyed brigade this week. I cant allow my mate STRAT to win with his $1-57 at any cost. The winner will be in the low $1-50ties i expect. MacdunkIm lookin good with a close today at 156c. You gonna do the dirty tomorrow Macca and sell a few of your secret NZO stash on the cheap? :eek: :D:D:D

[shasta]

Im lookin good with a close today at 156c. You gonna do the dirty tomorrow Macca and sell a few of your secret NZO stash on the cheap? :eek: :D:D:D

Might be a good time to buy back into NZO actually...

$1.61 would look good for the techies :cool:

[STRAT]

Might be a good time to buy back into NZO actually...

$1.61 would look good for the techies :cool:Macdunk will be selling a few at close tomorrow in the low 150's if you have a spare fifty bucks Shasta ;)

[blockhead]

Neopole

I too am holding more options than I'm planning to exercise and won't sell all the surplus ones either... I'm going sell the bulk either tomorrow or Monday but will hold onto about 50000, of which I plan to convert about half - however, if there's a significant shift upwards in the share price after Tuesday when the options can't be traded any longer, I can afford to convert all 50000 and will do so... otherwise I'll let some lapse...

BB, I must have missed a bit of info somewhere, is Tues the last trading day for OD's ?

Changes my thinking a wee bit if it is

Could hang onto a few not intending to convert and see what changes between now and conversion date

[duncan macgregor]

Im lookin good with a close today at 156c. You gonna do the dirty tomorrow Macca and sell a few of your secret NZO stash on the cheap? :eek: :D:D:D Sorry STRAT i got told off and pulled over the coals told the competition had to finish on the last sale on the 30th. I was silly enough at the start to think that was when the options stopped trading. DIGGER rightly pointed out it was the thirtieth when it was supposed to finish so had to do a bit of slimy back peddleing since it is his good self who is donating a $100 dollar bottle of plonk as a prize.
On another topic STRAT my old mate can you make a ruling in our competition SHREWDY objected me selecting PRC so to keep the peace and changed it to MEE another coal miner to find he is objecting to that. Should have been born a SHEELAH that boy. Macdunk

[STRAT]

Sorry STRAT i got told off and pulled over the coals told the competition had to finish on the last sale on the 30th. I was silly enough at the start to think that was when the options stopped trading. DIGGER rightly pointed out it was the thirtieth when it was supposed to finish so had to do a bit of slimy back peddleing since it is his good self who is donating a $100 dollar bottle of plonk as a prize.
On another topic STRAT my old mate can you make a ruling in our competition SHREWDY objected me selecting PRC so to keep the peace and changed it to MEE another coal miner to find he is objecting to that. Should have been born a SHEELAH that boy. MacdunkIm feeling a tad robbed here Macca. lol. If Id known it was the 30th I would have put up a different price.:mad: :p:p:p

I will wander over to sharechat now and see what all the ruckus is all about :D

[Lion]

Why would you let them lapse when you can sell them on market for around 5c today Paddie

Three reasons I can think of right now;

- They might be worth more than 5c tomorrow or Monday, maybe quite a bit more with a good ann.

- 5c is hardly worth worrying about after brokerage. They cost me little or nothing. I don't care if they lapse.

- If they lapse they cause less dilution, all the better for the heads I hold.


The options cease trading at the end of the day on Monday 23rd. Check the NZOG site for confirmation of this. Two days left - anything could happen :)

[bermuda]

Sorry STRAT i got told off and pulled over the coals told the competition had to finish on the last sale on the 30th. I was silly enough at the start to think that was when the options stopped trading. DIGGER rightly pointed out it was the thirtieth when it was supposed to finish so had to do a bit of slimy back peddleing since it is his good self who is donating a $100 dollar bottle of plonk as a prize.
On another topic STRAT my old mate can you make a ruling in our competition SHREWDY objected me selecting PRC so to keep the peace and changed it to MEE another coal miner to find he is objecting to that. Should have been born a SHEELAH that boy. Macdunk

Dunc,
What a great pick. Could really go MEE.

[BigBob]

Why would you let them lapse when you can sell them on market for around 5c today (assuming you have brought the OD's).

The head share price is going to take off regardless of whether you exercise or not.

So why not take the $$$$$$$$$$$$

Paddie

Well, as I said I'll sell most of the options I hold tomorrow or Monday and depending on the share price next week decide how many of the remaining ones I convert... I suppose I consider it a kind of insurance if an announcement a) sends the sp skyward - I convert more or b) sends it downward - in which case I may be able to buy more at a price lower than the 150 exercise price... not particularly scientific, I suppose, but makes sense to me... :o

[BigBob]

BB, I must have missed a bit of info somewhere, is Tues the last trading day for OD's ?


Nope - it's me being waffly... Monday 23rd is last trading day...

[bermuda]

Well, as I said I'll sell most of the options I hold tomorrow or Monday and depending on the share price next week decide how many of the remaining ones I convert... I suppose I consider it a kind of insurance if an announcement a) sends the sp skyward - I convert more or b) sends it downward - in which case I may be able to buy more at a price lower than the 150 exercise price... not particularly scientific, I suppose, but makes sense to me... :o

Forget all these messages about options etc.

Look at the big picture.

NZO is one of the standout NZX companies of all time.

Forget the small chat....just go and exercise as many as you can.

And yes, I know a lot of you will bail at 15% profit ( some before! ) telling the missus how well you have done.

But the wise hold.

[tim23]

Duncan - you didn;t get told off like you said to Strat; you just got it wrong but the 5 day gap actually makes your comp a bit more exciting than you thought?

PS Still won't answer my question re the options if they were expiring 30/06/09, braindead, blue eyed - what is it tonight?

[Dr_Who]

Oil Falls More Than $4 as China Announces Fuel Price Increase


By Mark Shenk


June 19 (Bloomberg) -- Crude oil fell more than $4 a barrel, the biggest drop in 11 weeks, on speculation demand will decline, after China said it will raise fuel prices starting tomorrow.



http://www.bloomberg.com/apps/news?pid=20601087&sid=aOnglhUaGIYo&refer=home

[foodee]

Well, as I said I'll sell most of the options I hold tomorrow or Monday and depending on the share price next week decide how many of the remaining ones I convert... I suppose I consider it a kind of insurance if an announcement a) sends the sp skyward - I convert more or b) sends it downward - in which case I may be able to buy more at a price lower than the 150 exercise price... not particularly scientific, I suppose, but makes sense to me... :o


BB
Your post intigue me.
I thought it would be more logical to convert what you want/can and then sell the rest - that way there is no wastage!
I have never sold any NZO and all NZOOD 'switched' and in fact averaged up twice in the last fortnight.

cheers

[digger]

Oil Falls More Than $4 as China Announces Fuel Price Increase


By Mark Shenk


June 19 (Bloomberg) -- Crude oil fell more than $4 a barrel, the biggest drop in 11 weeks, on speculation demand will decline, after China said it will raise fuel prices starting tomorrow.



http://www.bloomberg.com/apps/news?pid=20601087&sid=aOnglhUaGIYo&refer=home

Even at raising fuel by 25% still leaves China in a subsidies position.Probably since the last raise the WTI has gone up that much anyways. I still eventually see a time when world leaders will have to meet and agree on two big ticket items to draw out the plannets oil resource. That is a world market value for oil [Nil subsidy] and a hugh upward rising tax on engine size. That will not get us around PO but will give us maybe a decade longer in put solutions in place,if they exist.But then who is interested in what some farmer in Morrinsville NZ thinks,even if it is vastly superior to what will probably happen.

[fish]

[QUOTE=Dr_Who;207643]Oil Falls More Than $4 as China Announces Fuel Price Increase

Hasnt affected the Tapis price -still at $141.45 !
Sweet oil
Record gross income of over $1 million a day should continue for nzo .

[ritchie]

more now due to upgrade

[777]

REL: 0935 HRS New Zealand Oil and Gas Limited

GENERAL: NZO: Tui Oil Reserves Increased Again

The initial proved and probable (2P) reserves for the Tui Area Oil Fields
have been further increased from 47 million to 50.1 million barrels,
following a detailed field reassessment by the Operator.

New Zealand Oil & Gas Ltd's share of the additional reserves is almost
400,000 barrels. Using current oil prices and exchange rates, this has a
gross value to NZOG of around NZ$70 million.

[Sehnsucht888]

ITS OFFICIAL!!!

NZO
20/06/2008
GENERAL

REL: 0935 HRS New Zealand Oil and Gas Limited

GENERAL: NZO: Tui Oil Reserves Increased Again

The initial proved and probable (2P) reserves for the Tui Area Oil Fields
have been further increased from 47 million to 50.1 million barrels,
following a detailed field reassessment by the Operator.

New Zealand Oil & Gas Ltd's share of the additional reserves is almost
400,000 barrels. Using current oil prices and exchange rates, this has a
gross value to NZOG of around NZ$70 million.

This latest increase is consistent with the strong field performance since
commencement of production on 30 July 2007. Total field production from that
date until end of the financial year on 30 June is now forecast to be 14.2
million barrels.

Tui continues to perform above expectations with production so far this month
averaging 42,500 barrels per day. Production for the 2008/9 financial year is
now forecast to be 9 million barrels. NZOG's share of production in 2008/09
is now forecast to be 1.13 million barrels, an increase of 370,000 barrels.

Today's announcement follows last month's reserves upgrade from 41.7 to 47
million barrels, which resulted from an extension of the lease for the
Floating Production Storage and Offloading (FPSO) vessel, "Umuroa".

Drilling campaign
An additional development well and several near field exploration wells are
planned for the Tui fields and the Tui permit area in early 2010. These
exploration wells could be tied back to the Umuroa in the event of success.

NZOG Chief Executive David Salisbury says today's announcement continues the
good news from Tui.

"Tui has exceeded all expectations. Ahead of production starting on 30 July
last year, we had reserves of 27 million barrels, an expected first year
production of 9 million barrels and an international oil price of around
US$70 a barrel.

"Less than a year on, the reserves figure has almost doubled, production is
about to pass the 14 million barrel mark and Tui oil is selling for over
US$130 a barrel."

[BigBob]

BB
Your post intigue me.
I thought it would be more logical to convert what you want/can and then sell the rest - that way there is no wastage!
I have never sold any NZO and all NZOOD 'switched' and in fact averaged up twice in the last fortnight.

cheers

My thinking is that there may be events during the "dead time" (ie the time from the options stop trading until they must be exercised) that could influence my decision on how many I want to convert... that's why I want some "up my sleeve"....

Don't get me wrong about my timeframe and long term intent either - I have accumulated and held heads for 5 or 6 years and never sold any and am now very overweight NZO...

Have been in and out of OBs, OCs and ODs tho... ;o)

[BigBob]

Looks like one of those events just happened... :)

[Lion]

Oil Falls More Than $4 as China Announces Fuel Price Increase

Hasnt affected the Tapis price -still at $141.45 !



However, Tapis hasn't traded since oil dropped last night in the US.

Woohoo! Reserves upgrade. Over 50 million, great, could have been better. Still reckon there's more to come later.

[777]

Strategic timing of announcement don't you think?

Well done to those that bought in at the 2.5c level.

[fish]

[QUOTE=777;207664]Strategic timing of announcement don't you think?

see chris R post in last couple days-nzo would announce it as soon as they got the upgrade.

True to his word and I think we should all congratulate the new management for the smooth running of the most improved and best nzx company

[Sehnsucht888]

Strategic timing of announcement don't you think?

Well done to those that bought in at the 2.5c level.

Indeed. I was tempted, but am squezed with converting what I do have.. There have been a couple opportunities in the last few weeks to double or tripple your money if you had ballss...

[trackers]

Tui field's success heightens NZOG allure

5:00AM Friday June 20, 2008
By Grant Bradley (http://www.nzherald.co.nz/author/index.cfm?a_id=351)

http://media.apn.co.nz/webcontent/image/jpg/oil16.jpg
NZOG is due to announce a revised appraisal of the Tui field reserves any day.




The success of the Tui field for New Zealand Oil & Gas has highlighted the company's appeal as a target for takeover and merger deals, analysts say.
NZOG is also looking to get a significant cash boost with most of a potential $208 million in options likely to be exercised by the end of the month.
Already about 4.2 million of the 139 million $1.50 options have been exercised and the company says the expected capital injection will increase the scale of opportunities it "can sensibly pursue".
The company is this year's second-best performer on the NZX, behind Pike River Coal in which it has a 31 per cent stake.
ABN Amro analyst Rob Foster said given takeover and merger activity in the energy sector across the Tasman, it was "possible" NZOG could be a target.
"It's one of the upsides of our investment view. With the oil price running so high you would expect that NZOG could be seen as a target. NZOG is by far the best New Zealand opportunity."
The company had an open share register, was producing good revenue and had good oil and gas prospects ahead of it.




"It could be attractive to someone, I just don't know who's been going around the globe looking at these things but it's definitely an option," he said.
Forsyth Barr analyst Andrew Harvey-Green said merger or takeover activity could go either way.
"They've [NZOG's] got the cash reserves themselves - if they want to have a go at someone they could probably do that but equally those cash reserves could be attractive to someone else coming in," he said.
"If you look at the smaller Australian stocks a lot of what they lack is cashflow but they have better exploration acreage than what NZOG has."
A merger with such an Australian company would be a nice. "It's certainly not outside the realms of possibility."
In a briefing for investors released yesterday NZOG outlined milestones reached in the Tui field, in which it has a 12.5 per cent stake.
In the past 10 months the company's share of production has been 1.75 million barrels, with the average net price per barrel of US$96 ($127). It repaid its share of exploration and development costs of $52 million in 4 1/2 months.
The company is due to announce a revised appraisal of Tui reserves any day.
Foster said although it was hard to predict, his firm was working on the assumption that about 80 per cent of options would be taken up.
NZOG shares closed up 2c at $1.56 yesterday.


http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10517299

[digger]

However, Tapis hasn't traded since oil dropped last night in the US.

Woohoo! Reserves upgrade. Over 50 million, great, could have been better. Still reckon there's more to come later.


Your on to it Lion.This is a wise group of JVers. Be conserative and allow for future upgrades. My absolute bottom volumn is 60 million barrels and you can hold me to it that will be achieved in 12 months. Note i am only saying that 60 million will be the oil in place recovery volumn.By end of june 09 approximately 26 million barrels will be recoverd from TUI. That gives 12 million for the second fininical year. Remember the first year had only 11 months production from and will give 14.2 million,so i see 12 million achievable in the second finical year.That would be a average of 33,333 barrels a day which in time Tui will deliver. The company sees this falling to only 9 million per year or just under 25000 a day.
So next upgrade will be about end oct.Hey do we and AWE not have a AGM about then?????

[Hoop]

...............Agreed re: T/A + Phadedrus - but don't miss the boat - I'm sure you won't!!

A couple more TA buy signals triggered not totally convincing but enough for me to start accumulating again.

Chalice you are correct..I haven't missed the boat, got on board this morning at $1.58:D

[manxman]

...The company sees this falling to only 9 million per year or just under 25000 a day.
So next upgrade will be about end oct.Hey do we and AWE not have a AGM about then?????

Bearing in mind that production was supposed to be down to 25000 bbl/day by Christmas '07, we seem to be getting a good run. Exceeding expectations is putting it mildly. I wonder if the operator has really worked out what is going on yet? We seem to be getting a huge increase in production for a relatively modest increase in reserves, so there may well be more to come

The only downside is that with the extra oil we are getting extra flare gas, but Harry Duynhoven seems quite relaxed so long as the royalties keep coming.

We may have to wait until the next drilling round for a formal upgrade, but the AGM should be interesting anyway.

I had to mortgage the wife and sell off the grandchildren for medical research in order to convert the oppies. Now I can sit back, relax, and watch all the fun over the next month.

[trackers]

Bearing in mind that production was supposed to be down to 25000 bbl/day by Christmas '07, we seem to be getting a good run. Exceeding expectations is putting it mildly. I wonder if the operator has really worked out what is going on yet? We seem to be getting a huge increase in production for a relatively modest increase in reserves, so there may well be more to come

The only downside is that with the extra oil we are getting extra flare gas, but Harry Duynhoven seems quite relaxed so long as the royalties keep coming.

We may have to wait until the next drilling round for a formal upgrade, but the AGM should be interesting anyway.

I had to mortgage the wife and sell off the grandchildren for medical research in order to convert the oppies. Now I can sit back, relax, and watch all the fun over the next month.

From 41mil to >50mil reserves in a month or so is still a pretty damn good upgrade

[Drone]

Little move in shares now - although high volume, you got to wonder who is selling... An extra 400k barrels for NZO is prob 10 -20c per share you would think depending on how many oppies get converted and exc rates, tapis price etc.

So must have been "priced in" - not that we have really seen much action last couple of months. Hopefully after this options distraction is out of the way we can get back to business.

[trackers]

Tui oil field reserves lifted - 50.1 million barrels down there

11:25AM Friday June 20, 2008


http://media.apn.co.nz/webcontent/image/jpg/tuiship230.jpg




Reserves in the offshore Taranaki Tui oilfield have been lifted again, with publicly-listed New Zealand Oil & Gas (NZOG) putting the gross value of its share of the increase at around $70 million.
NZOG said today that the initial proved and probable (2P) reserves for Tui had been further increased from 47 million to 50.1 million barrels, following a detailed field reassessment by operator Australian Worldwide Exploration (AWE).
Three weeks ago, NZOG was hosing down expectations after The Australian newspaper reported the reserves were about to be raised, although that report appears to have been overly optimistic saying the reserves could go as high as 55 million barrels.
Today NZOG, which has a 12.5 per cent share of Tui, said its share of the additional reserves was almost 400,000 barrels. Using current oil prices and exchange rates, that had a gross value to NZOG of around $70m.
Today's announcement follows a reserves upgrade last month from 41.7 to 47 million barrels.




Total field production since it started last July 30 until the end of the financial year on June 30 was now forecast to be 14.2 million barrels.
Tui continued to perform above expectations with production so far this month averaging 42,500 barrels per day, NZOG said.
Production for the 2008/9 financial year was now forecast to be 9 million barrels, with NZOG's share of production in 2008/09 forecast to be 1.13 million barrels, an increase of 370,000 barrels.
An additional development well and several near field exploration wells were planned for the Tui fields and the Tui permit area in early 2010, NZOG said.
NZOG chief executive David Salisbury said Tui had exceeded all expectations.
Before production started reserves had been at 27 million barrels, with an expected first year production of 9 million barrels and an international oil price of around US$70 a barrel, he said.
"Less than a year on, the reserves figure has almost doubled, production is about to pass the 14 million barrel mark and Tui oil is selling for over US$130 a barrel."
Along with NZOG, the other participants in Tui are AWE with 42.5 per cent, Mitsui E & P Australia with 35 per cent, and Pan Pacific Petroleum with 10 per cent.
NZOG shares were up 2c shortly before 11am to $1.58, having ranged between $1.67 and 97c in the past year.
- NZPA


http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10517398

[macduffy]

Little move in shares now - although high volume, you got to wonder who is selling... An extra 400k barrels for NZO is prob 10 -20c per share you would think depending on how many oppies get converted and exc rates, tapis price etc.

So must have been "priced in" - not that we have really seen much action last couple of months. Hopefully after this options distraction is out of the way we can get back to business.


At least the SP hasn't dropped.

AWE with 42.5% of Tui is down 10c - about 2.4% !

[Nitaa]

the pre annoucement bull sh-t in last few weeks about 60 million plus up grade would of dampend a few investors:rolleyes:Im with Digger. I beleive 60 mbo is almost a given on todays prices. That would change if oil dropped below $50 of course.

Its worth to note that awe have no motive to give tui's likely full potential at this stage as many factors can change.

[upside_umop]

Little move in shares now - although high volume, you got to wonder who is selling... An extra 400k barrels for NZO is prob 10 -20c per share you would think depending on how many oppies get converted and exc rates, tapis price etc.

So must have been "priced in" - not that we have really seen much action last couple of months. Hopefully after this options distraction is out of the way we can get back to business.

maybe 10-20 cps using a gross value calculation at current prices..

but remember, this 400k barrels of oil will be spread out over the next 10 years, or as long as tui is running. given this, when you discount it back at an appropriate rate, it will be worth much less. say it was 40k barrels a year extra to nzo at a discount rate of 13%.

using an annuity as a rough guide, this would be worth (using current prices from article):

- 43 million revenue
Less: less operating costs
taxes & royalties

we would maybe see $20 million after all of that on the bottom line ~ 5cps fully diluted.

some may say 13% is too high, but the risk premium is that this may not actually come through...its still P50 which means 50% probability, may even need higher than 13%..the current market sure seems to price in higher than that with all NZO's current developments..

and also, like you said, it will be somewhat factored into the sp and with the ramping that went on in the papers more may have been expected...

i also agree with some of the other posters that this may not be the last reserve upgrade...but remember those intial flow rates forecasts that everyone compares the latest flow rates to, was with an estimated P50 for 28 mmbls...we've now amost doubled that intial reserves, and water rates are increasing steadily...even with the planned up grade for umuroa being able to handle 150,000 barrels a day, will it be able to double the production forecasts throughout the fields life like some expect?

[Casa del Energia]

Here's a dampener for all the upgrade enthusiasts, plot these numbers and predict the next number ...

27 41 47 50

[Naylz]

okay mortgaged myself up to the hilt for this one but its still taking a chance. Im happy that provided there are no unforeseen pitfalls that this stock can only go up.

But .....
Things happen, earthquakes, fire, cyclones, offshore oilfields are vulnerable to this, so there is always the element of risk..

[777]

Here's a dampener for all the upgrade enthusiasts, plot these numbers and predict the next number ...

27 41 47 50

OK I'll bite, 51.5. That being the last upgrade?????

[COLIN]

ACC have increased their options holding to 9%. They have also been buying as well as selling the heads, with their current percentage of those dropping slightly, from just above 5% to just below 5%.

[Casa del Energia]

OK I'll bite, 51.5. That being the last upgrade?????

I've forgotten how to do regressions - I was the idiot who never 'got' the stats lectures. - so using a pencil - yup 51.1
If anyone can remember - have a go. Might try using double differentials but would be a fudge anyway - but not sure if it is worth wasting a couple of hours
fiddling with dx2/dy just to prove what is easily seen - unlikley to get anywhere near 55 - (which was posited some time back(?).

Anyway.. the chart indicates there is no more or not much more to go - happy to be shot down, I know it's not good science.

[Xerof]

All very well doing your regressions, but this baby ain't a One Hit Wonder.

[Xerof]

Hmmm, pity the SSH notice covers such a long period....seller lately to cap heads while hoovering up the oppies ?? :cool::cool:

[COLIN]

....seller lately to cap heads while hoovering up the oppies ?? :cool::cool:
A distinct possibility, I would say, and a feasible strategy only for someone with very deep pockets.

[Casa del Energia]

All very well doing your regressions, but this baby ain't a One Hit Wonder.

Point taken. It is just one factor to keep in mind. Who knows - there may be other resevoirs out there - that would change the landscape in a nanosecond. For the first time I read that they intend to do more exploratary wells around there - I don't know if I misssed that before but there it is now.
And Kupe is on track.

[duncan macgregor]

[QUOTE=duncan macgregor;207051]Competition to select NZO share price on conversion date June 30th
in the event of a tie the winner is the person with the correct score posting first
I will list you in posting order.
1,AMR 180c, 2, OILER 165c, 3,Macdunk 159c. 4,MATTYROO 158c.
5,SEAMUS 135c, 6,SERPIE 131c, 7, LIZ 120c, 8, STRAT157c.
9TRACKERS 168, 10, COLIN 170, 11,THE MACHINE 210c. 12,MALCOLM 200c.
13,SPOOK 172, 14,BIG BOB184c, 15,ZORBA 155c, 16, REMY 167c,
17 AMERICAN PSYCHO 175c 18 SHASTA 161c, 19RONTHEPOM 171c 20 PHAEDRUS 160.
21SHREWDY 169, 22 BERMUDA 149, 23 MORV 183c, 24 COALIE 188c
25 DIGGER 173c, 26 blank, 27 NITA 181c, 28 SUMMER NED 193c.
29 QOH 179c, 30 WK6332 225c 31 BALANCE $10-60 32 KS 162,
33 TOK3N 145c, 34 SHANE M 162.5c, 35CORRAN 156c, 36 MICK100 300c.
37 DSURF 154c, 38 SKEET 185c,39 MIBO 177c, 40 JAY 162c,
41 ZACMAN 187c, 42 GAMBLER33 115c, 43 ANUBUS144c, 44 BRUCETO9 164c.
45 romer 163c.46 HOOP 147c 47 RABBI 148c 48 ROTWEILLER 153c,
49 MINGEATHINAIOOS 150c,50 MANXMAN 195c, 51 MACDUFFY 146c, 52 BLOCKHEAD 198c,
53 777 226c,54 SWISSBOY 174c,55 AIRDALE166,56 CLIPS 178c,
57 PADDIE 196c,58 FOODEE 176, 59 BK152c,60 MPC182c,
61 STEVE 151,62 ONTHEMONEY 143, 63 LION 186, 64,TIM23 189c,
65 BOB C 190 66 RIF RAF 191c 67, OUT TO LUNCH 194 68 SEHNSUCHT888 192c,
69 PIETRADE 220c,70 ZAC 197c, 71,CAM 245C,72, CHALICE 214c,
73 GLENDOONIE 142c 74,UPSIDE_UMOP 159c,

[Flintstone]

So much positive talk of this stock, I wouldn't mind hearing more argument, it makes for healthy discussion.

NZO Mgmt have done a great job to get the share price from where it was 6 months ago to today. I'd suggest it has been their number one priority to get these options exercised. It's prob not possible to fool the market, but I know if I were in mgmt every good news item and financial scrap would be legally shuffled to pop the price over 1.50 just before option expiry. It could be luck that things have come together, or maybe in the long term plan timed trump cards are played at the right time to get the shareprice where it needs to be. Where-to from here?

A lot of holders would admit being overweight on NZO? Some on borrowed money with the expectation of price booming - that can only make the stock more volatile.
How many will be gagging to reduce their exposure in the next 6 months - Maybe this will form the next wall holding the shareprice back.

The crowd rooting for a fall in oil price is a very, very large powerful crowd. If you're betting to make money in oil, you may be facing those with the job of upholding the world economy.
More NZO good news and publicity post 30th will go down well. Any mildly negative news from JV or world economy could cause a flurry in the wrong direction.

There is no doubt with oil prices the way they are going something radical is going to have to give in the world economy. I'm not sure I'd be mortgaging the family home to play on that field.

Disc: Hold NZO.

[trackers]

Interesting week coming up guys its anyones guess what will happen next week or who the favourite is at this point.

Shall I PM you my delivery address now, or wait until the competition officially closes? :)

[blockhead]

Whats the go ??? 2m OD's @ 8.5 and 2m NZO @ 1.59 right at close of play

Late charge from somewhere ???

[COLIN]

Whats the go ??? 2m OD's @ 8.5 and 2m NZO @ 1.59 right at close of play

Late charge from somewhere ???
NZOOD sale registered at 5.03p.m. as LT (presumably Late Trade). Does this become the closing price? Don't think so, as it was after the official closing time. Someone is playing ducks and drakes. Monday is going to be exceedingly interesting - the screen will be mesmeric - I hope my wife understands if I keep ducking into my computer room!

[neopole]

it seems that who ever whats more oppies is starting to realise that to the big parcels out there before they lapse, will have to pay to get them.
i think monday will show that mister big pockets will dish out the cash to get his fill of oppies.
he has more to lose by being tight fisted, than giving several cents more per oppie.
this IS his last chance..........
10cent or over at 4pm monday gets my oppies or they lapse.

ps..... buying a lotto ticket tomorrow.........