NZ Oil & Gas (NZO)

[Dr_Who]

I am a long term investor, so any short term price movement is an opportunity for me. :) If it comes down I buy more. Who cares about the short term movements if you believe in the story and the company. I suppose time will be the judge. ;)

People tend to forget that the world demand is greater than supply for raw materials to produce energy. This is a long term problem.

[digger]

So TR buys 200,000 heads and 57,407 options on the ESOP scheme and pays $202800 and no one comments about it. Sounds like current market price which is a steal,but is available to everyone.

[Dr_Who]

Digger, did he buy this on market or was it issue of new shares?

[digger]

. Nature or type of transaction (as required by regulation 11( 1)( a)) nil
nil Allocation of ESOP shares Allocation of ESOP options
14. Consideration (as required by regulation 10) nil nil $202800 (payable on
terms) nil

Dr Who, ESOP is short for employee share ownership plan,so the shares came from this allocation . From where in this plan i do not know. About 9 months ago TR was issued shares at 1 cent which had a short life and it could be these he is now paying for.

BWR,is this correct?

[shasta]

. Nature or type of transaction (as required by regulation 11( 1)( a)) nil
nil Allocation of ESOP shares Allocation of ESOP options
14. Consideration (as required by regulation 10) nil nil $202800 (payable on
terms) nil

Dr Who, ESOP is short for employee share ownership plan,so the shares came from this allocation . From where in this plan i do not know. About 9 months ago TR was issued shares at 1 cent which had a short life and it could be these he is now paying for.

BWR,is this correct?

Digger

Lets not be giving Balance any credit, he has zero credibility & won't answer any questions asked of him.

If the blantant downramping doesnt stop, i'll have him banned.

He disappears to go post on SS, & on the PRC thread here on ST, without acknowledging his postion (or lack of) in NZO.

Nita - there are a few of us that have been around NZO & Sharetrader for quite a while waiting for the NZO story to unfold...

[Crypto Crude]

shasta,
balance said that the coal would be shipped to Newcastle...
I think that says it all...
:cool:
.^sc

[Mr Tommy]

shasta,
balance said that the coal would be shipped to Newcastle...
I think that says it all...
:cool:
.^sc

Yep, I think BALANCE could get a job at the NZ Herald.

[sideline]

Yep, I think BALANCE could get a job at the NZ Herald.

Perhaps s/he already has.

[duncan macgregor]

Nothing like a scorned lovers rage to get everything out of focus. it seems with NZO nobody is allowed to have an opinion, that contradicts the thoughts of the blue eyed brigade. The only thing that matters when investing is your return, either with dividends or rising sp. When i hear people rave on about a company, [any company] refusing to even listen or consider an opposing point of view, i know they are sitting ducks waiting on the season to open.
NZO has more than its share of sitting ducks, the season opens in july next year when the music stops at option buy time, its pass the parcel up to then. The sp has been over $1-30 in two seperate years so why are you holding at $1-02 or whatever it is hoping for at least $1-50 next july. Surely even the most one eyed lover being scorned, must think it might have been better to sell. The company looks at you lot and treats you with the contempt you deserve. Only my opinion feel free to throw a tantrum it only amuses me. Macdunk

[Hoop]

I think us shareholders can add another maybe factor to the overall NZO equation.

There seems to be some uncover stuff happening between Iran and the West....again.
Prospects of war is now hinted at, yet again, mainly from the press taking advantage of frustrated politicians putting their feet in their mouths ......so the threats are coming thick and fast at the moment. This will help underpin the oil price which is in unchartered waters at the moment with another record high up nearly $2 to $us 83.85.
The press raising (yet again) the suggestion that Iran may threaten to mine the Gulf and block the Strait, got an attack back from Iran

Quote.. Earlier, when asked if Iran would block the Hormuz Strait, the world's most important waterway for oil shipments, if attacked, Government spokesman Gholamhossein Elham dismissed it as "far-fetched" that anybody would take "this foolish option". NZHerald (http://www.nzherald.co.nz/section/2/story.cfm?c_id=2&objectid=10465003)

So how much of this is press puffery? or is there some skulduggery going on from all sides.

From a Western perspective It seems Oil is now a much more precious commodity and must be shared by all in the world ...or else. They know that oil would be severely interrupted if a strike on Iran over their nuclear non-compliance goes ahead and trying to find alternative solutions seems frustratingly not forthcoming as is their bad pressing Iran and other unhanded stuff from all sides (including Iran) that us mere mortals don't hear about.

However to add balance.....it is not new to hear about Iran closing the Hormuz Strait An article dated 1 March 2006 (http://archive.newsmax.com/archives/articles/2006/2/28/181730.shtml?s=lh)makes good reading as to what could happen if Iran and the West have a fall out.
Also Bloomberg on May 6 2006 (http://www.bloomberg.com/apps/news?pid=10000103&sid=a_Aw9B.MGCuY&refer=us) their article shows that Iran's Oil threat strategy could be very effective against a possible Western Strike on Iran.


Is this time any different from the past actions? or is it more serious this time?
Either way...surely it has to be a positive factor for NZO

[Nitaa]

I think us shareholders can add another maybe factor to the overall NZO equation.

There seems to be some uncover stuff happening between Iran and the West....again.
Prospects of war is now hinted at, yet again, mainly from the press taking advantage of frustrated politicians putting their feet in their mouths ......so the threats are coming thick and fast at the moment. This will help underpin the oil price which is in unchartered waters at the moment with another record high up nearly $2 to $us 83.85.
The press raising (yet again) the suggestion that Iran may threaten to mine the Gulf and block the Strait, got an attack back from Iran

Quote.. Earlier, when asked if Iran would block the Hormuz Strait, the world's most important waterway for oil shipments, if attacked, Government spokesman Gholamhossein Elham dismissed it as "far-fetched" that anybody would take "this foolish option". NZHerald (http://www.nzherald.co.nz/section/2/story.cfm?c_id=2&objectid=10465003)

So how much of this is press puffery? or is there some skulduggery going on from all sides.

From a Western perspective It seems Oil is now a much more precious commodity and must be shared by all in the world ...or else. They know that oil would be severely interrupted if a strike on Iran over their nuclear non-compliance goes ahead and trying to find alternative solutions seems frustratingly not forthcoming as is their bad pressing Iran and other unhanded stuff from all sides (including Iran) that us mere mortals don't hear about.

However to add balance.....it is not new to hear about Iran closing the Hormuz Strait An article dated 1 March 2006 (http://archive.newsmax.com/archives/articles/2006/2/28/181730.shtml?s=lh)makes good reading as to what could happen if Iran and the West have a fall out.
Also Bloomberg on May 6 2006 (http://www.bloomberg.com/apps/news?pid=10000103&sid=a_Aw9B.MGCuY&refer=us) their article shows that Iran's Oil threat strategy could be very effective against a possible Western Strike on Iran.


Is this time any different from the past actions? or is it more serious this time?
Either way...surely it has to be a positive factor for NZOits not if but when.

duncan. on sharetrader i value all input, even yours. the funny thing with balance and yourself (clearly 2 different people) are the comments that are being made. i give you some credit that at least you spit out your reasons for bagging nzo. even if you play like a broken record but at least there is some substance.

balance makes me laugh in the sense where he has no substance to his bagging. hes just the opposite of someone saying that the sp will double in 12 months without any meat to the bone. i may be wrong but balance does look like a lover scorned.

the soapbox continues........

[STRAT]

Nothing like a scorned lovers rage to get everything out of focus. it seems with NZO nobody is allowed to have an opinion, that contradicts the thoughts of the blue eyed brigade. The only thing that matters when investing is your return, either with dividends or rising sp. When i hear people rave on about a company, [any company] refusing to even listen or consider an opposing point of view, i know they are sitting ducks waiting on the season to open.
NZO has more than its share of sitting ducks, the season opens in july next year when the music stops at option buy time, its pass the parcel up to then. The sp has been over $1-30 in two seperate years so why are you holding at $1-02 or whatever it is hoping for at least $1-50 next july. Surely even the most one eyed lover being scorned, must think it might have been better to sell. The company looks at you lot and treats you with the contempt you deserve. Only my opinion feel free to throw a tantrum it only amuses me. MacdunkLOL Duncan, You might want to consider joining HC. Thats where I go if I feel like picking a fight :D:D:D

[arjay]

McDunk has a point. Oil has hit an all time high and NZO is rolling in cash - grossing $5 million per week from Tui. However, there's a big fence between NZO (the company) and NZO (the shareholders). On one side the company is sucking up the oil revenue, paying the outgoings (including salaries, bonuses and directors fees to staff). Unless some of surplus gets passed over the fence to investors NZO represents the same investment now as it did before they discovered oil. Plying it all back into continual exploration will at best just end up with a bigger pile of cash on management's side of the fence. So, why would anyone want to pay $1.50 for a share that has the same return as it did when it was 30c?

[dsurf]

Why don't we nominate MacDunk to be a director at the AGM. I think his insight into investor relations would greatly benefit the company! What do you think MacDunk?

[duncan macgregor]

ARJAY, you are on to it. NZO have enough coming in to keep the fatcats at the top in luxury for the next few years regardless of the options. Unless this sp increases enough for the options to be excercized then all hope of dividends fly out the window. They only can rely on dividends from PRC plus sp like the rest of us. No large profits out of turn in that since they sold most of it. Pretty flush with money at the moment for as long as it lasts, but they are in a very expensive business.
Its going to cost a lot to continue with the cost of further exploration, the shareholders are the last consideration, as is obvious. What is PRC going to do explore for more, or is that it in thirty years time. To invest in anything, requires carefull consideration of all the facts presented, NZO fall very short in that dept. I think a lot of shareholders in this company should stop and think it out in a more objective manner than gets shown on this forum.
Its not how much they will earn, its what will they do with it once they have got it. Macdunk

[arjay]

Why don't we nominate MacDunk to be a director at the AGM. I think his insight into investor relations would greatly benefit the company! What do you think MacDunk?

Looking at it objectively, NZO no longer need to improve investor relations. They have lots of money coming in so have no need to rely on shareholders. I guess there would be an issue with circling take-over sharks if the SP hovered around 30c again. Apart form that, if I were CEO I would probably ignore my shareholders and quietly buy all the shares back at a discount. So, don't nominate me. The years have shown that no amount of grizzling generates enough angry shareholders to toss the exec out at the AGM - so as CEO I have no worries there either. Now, about my bonus.........

[boysy]

clearly there are very seperate groups those who belive in NZO and those who dont and those standing on the fence.i have the up most respect for those that state what they believe and why as opposed to just trying to rev up other members. Its difinately an interesting thread due to different thoughts and ideas and hope it continues.

[tim23]

Arjay - what rubbish, the company has moved on from the 30c days, Tui wasn't around then so your comparison is invalid.

Duncan - still the resident expert in picking last weeks lotto numbers, Harry Hindsight, you need to get over yourself.

[Hoop]

Management being anti shareholder friendly will have to dream up some way to boost the shareprice to $1.50 within the next 6-9 months.
Any ideas??
Maybe a good time to exit at that point.

[duncan macgregor]

Management being anti shareholder friendly will have to dream up some way to boost the shareprice to $1.50 within the next 6-9 months.
Any ideas??
Maybe a good time to exit at that point. I would think that even NZO management regardless of how shareholder unfriendly, would have something to flash in front of the punters before option date. Its got me beat what it might be, but surely they are not that stupid to have nothing up their sleeve. I actually think they dont care, but time will reveal all, making this an interesting case to follow with your money. Macdunk

[digger]

Interesting discussion and grizzle.George Bush has unfortunately degraded the "stay the coa-rse",but we should keep it in mind that we have taken on three projects and stay the coa-rse is the line i will be pushing.So i do not want any dividends or more projects until we have consumed the big mouthfull we have already taken on. The large amount of time and delays have worn most investers thin but this company has only one way forward and that is to get the current projects running. In time i believe both PIKE and KUPE will be as successful as TUI now is.
There is a strange reluctance for the SP to rise above 1-02. My thinking is that some large holder is exiting the market[maybe ACC] regardless of the future.On pure fundamentals the SP should be rising but the fact that it is not suggest something abnormal is acting against it. A rerating will take place and could be sudden once this damping effect is completed.
Remember George Bush is nuts but in this case Stay The Coa-rse anyways.

[Hoop]

I would think that even NZO management regardless of how shareholder unfriendly, would have something to flash in front of the punters before option date. Its got me beat what it might be, but surely they are not that stupid to have nothing up their sleeve. I actually think they dont care, but time will reveal all, making this an interesting case to follow with your money. Macdunk

I actually think they dont care Agree

Hope the management is stupid (but I doubt it) as they may end up being the Xmas Turkey on the 25th December. Some outfit must be watching and licking their lips as they watch NZO slowly accumulate a pile of cash.

A smart Management would already be setting up defenses against possible hostile T/O raids.

[shane_m]

I submitted a question through NZO website asking what they are going to do with the TUI revenue, so far no reply.

[tim23]

Management unfriendly? you have some strange conspiracy theories going on duncan - I trust they are far smarter than you old fella

[boysy]

well i think the thing to do is to turn up to the agm as talked about and have a quite meeting with some of management afterwards as some people did last year aparently.

[tim23]

Boysy - Quiet meeting you mean or quite a meeting?! Come in Duncan = oops bed time old fella, you can dream up some more nightmares - just imagine NOG $1.70 or Pike $1.29 or PPP $.50 = oh dear the pain!

PS Please nominate tonights lotto nos so we can all win, we are sick of you alwys winning?

[tim23]

PS Correction - Saturdays lotto nos will do!!

[STRAT]

PS Correction - Saturdays lotto nos will do!!1st division divided between everyone here, mmm? hardly worth the bother.

[digger]

I submitted a question through NZO website asking what they are going to do with the TUI revenue, so far no reply.

Hopefully they will reply saying that the first and best stratagy is to fund PIKE and KUPE.Such an investment will bring a triple economic success in just a few years.Paying dividends before we have used up all tax losses or funding the other two projects is a losers game.

[shasta]

Hopefully they will reply saying that the first and best stratagy is to fund PIKE and KUPE.Such an investment will bring a triple economic success in just a few years.Paying dividends before we have used up all tax losses or funding the other two projects is a losers game.

Totally agree Digger

NZO can do wonders for there own SP by getting Pike River up & running & paying off the Kupe debt ASAP.

Dividends can wait until the 2009 year, im fine with that!

[Balance]

Read about the impact that the new carbon tax will have on PRC?

[Kropotkin]

Whats the news Balance? I can't find anything...

As per the existing IRD policy doument
http://taxpolicy.ird.govt.nz/publications/files/html/carbontax/c5.html

5.32 Coal will be subject to the tax when first imported, or sold or used by the coal miner, including in the manufacture of briquettes or other energy products.


(I think this only counts for sales in NZ though it's not specific)


5.36 Coal miners and importers will also be permitted to calculate specific emission factors from the default or specific emission factors of coal blended in fixed proportions, or when proportions of particular consignments are adequately recorded.

[boysy]

well balance please do explain how it affects PRC

[winner69]

well balance please do explain how it affects PRC

A joker form solid energy was saying that this government initiative to save the world will cost them $14m -- a fair chunk of their profitability he was lamenting

Still working it all out he said

[sideline]

A joker form solid energy was saying that this government initiative to save the world will cost them $14m -- a fair chunk of their profitability he was lamenting

Still working it all out he said

It will affect solid energy because they sell some of their product in NZ (hence it adds to NZ's carbon
emissions). But Pike's is luckily all being exported, thereby appearing in the emissions of the
importing country. The consuming country has the carbon liability.

If it wasn't like that I wouldn't need to worry about the carbon in the petrol I fill in my tank - that would be
Kuwait's (or wherever the oil for it comes from) problem.

[boysy]

well solid energy does have many coal mines are supplys more coal than pike so that $14 M you are talking about would have to be divided by a few times at least right ?

[upside_umop]

woah, a fullstop or two wouldnt go a miss boysy, its painful reading! :D

im guessing kupe will be negatively affected by the carbon emissions trading then?

they are selling domestically :(

thoughts?..i know, im too lazy to look up the rules about it...

[upside_umop]

ok i just followed my own lead on the same link as above, and it looks like kupe will suffer a little.

Starting from 5.24 it states:

5.24 The carbon tax will be applied to gas when first sold or used by the holder of the petroleum permit under which the gas was produced. Flaring or venting by the permit holder will be treated as "own-use". Oil products removed from the gas stream before the first point of sale (the point at which the product is first supplied by a producer to another person) will be taxed under the rules for oil products (for example, taxed when refined, if sent to a refinery).

:(

[Ripping]

im guessing kupe will be negatively affected by the carbon emissions trading then?

they are selling domestically :(

thoughts?..i know, im too lazy to look up the rules about it...

Dunno what the specific rules are but as gas is pretty well the cleanest of the fossil fuels, in fact, the other end of the spectrum in comparison to coal, the liability would be minimal (in comparison).
And it would surely be up to the consumer of the fuel, not the provider, to pick up the tab for emissions ? i.e. Genesis, not Kupe JV.

[blockhead]

Pike should get a credit, they are sending the nasty stuff out of our country so we don't release the CO2, we should be congratulated and rewarded !

[sideline]

Dunno what the specific rules are but as gas is pretty well the cleanest of the fossil fuels, in fact, the other end of the spectrum in comparison to coal, the liability would be minimal (in comparison).
And it would surely be up to the consumer of the fuel, not the provider, to pick up the tab for emissions ? i.e. Genesis, not Kupe JV.

Yep, that is why the price of petrol and other non-renewable sourced energy (including electricity as far
as its generated from oil or gas or coal) is expected to go up. Even if the levy is placed on the producer,
in the end it will be the consumer who pays for it in higher prices.
Sure Kupe will recover any extra costs just the same.

[digger]

Yep, that is why the price of petrol and other non-renewable sourced energy (including electricity as far
as its generated from oil or gas or coal) is expected to go up. Even if the levy is placed on the producer,
in the end it will be the consumer who pays for it in higher prices.
Sure Kupe will recover any extra costs just the same.


Sideline i would say you are on to it. It will just be another tax that will make the product dearer. If the consumer still wants it they will just have to pay more. It is just not correct to say it will come off the profit,only [un]balanced would say that.

[Oiler]

Pike should get a credit, they are sending the nasty stuff out of our country so we don't release the CO2, we should be congratulated and rewarded !

Your onto it Blockhead...... yes we are exporting "coking coal" a lot different from the coal you "might burn" in your fireplace.

Solid Energy sell there lowest grade "coal" to the worlds largest water filter company as a carbon filter and at a large premium. A couple of ship loads a year at mega bucks............ is Helengrad going to stuff that export up? :D

[manxman]

Solid Energy sell there lowest grade "coal" to the worlds largest water filter company as a carbon filter and at a large premium. A couple of ship loads a year at mega bucks............ is Helengrad going to stuff that export up? :D

Seriously GOOGLE "Terra Preta" and see the potential of sequestrating carbon in topsoil (not credited under Kyoto). Charcoals are incredibly bio-active and if we could use our current wood waste (felled forest minus millable timber) and drill the resultant charcoal into our dairy pasture we would indeed be clean green hombres. A million tonnes of charcoal/year sequestered in our topsoil would raise fertility, cut groundwater contamination, improve drought resistance and make Clark Kent notice Lois Lane. We need some serious research, but soil conservation has always been the poor cousin. In the last Manawatu floods, the carbon content of the sediment being transported under the Fitzherbert Bridge was about 9%. This is way above what you would expect from soil samples in the catchment, so floods are selectively stripping our premium soils. Regardless of any global warming arguments, we need not simply to preserve our soils, but to actively enhance them. Char is perhaps a way to do this. Apart from the possibility that all the work from Cornell and the University of Hawaii is bovine, there really is no downside to this. Helen has to convince the rest of the world that topsoil building is a valid credit in the Kyoto equation, but that's her job.

Mx

[Balance]

So nobody here has any ideas how PRC is affected by the carbon tax regime.

Case of waiting then for NZO and PRC to update everyone.

[peterb]

So nobody here has any ideas how PRC is affected by the carbon tax regime.

Case of waiting then for NZO and PRC to update everyone.
Who knows Balance? Everyone has a pretty good idea, I'm sorry its not specific enough for you, but maybe you can do some detective work for us and spend your weekend trawling through tax documents? In other news, US crude up to $84USD/b

[sideline]

Sideline i would say you are on to it. It will just be another tax that will make the product dearer. If the consumer still wants it they will just have to pay more. It is just not correct to say it will come off the profit,only [un]balanced would say that.

Exactly digger, as long as all domestically consumed non-renewable energy sources are levied the
consumer doesn't really have a choice but to pay up. The only net effect of the carbon-tax is to make
renewable sources more competetive vs the non-renewables, which is the intention of Kyoto.

I just can't see that renewables can seriously replace non-renewables in the medium term, say 10years.

[foodee]

So nobody here has any ideas how PRC is affected by the carbon tax regime.

Case of waiting then for NZO and PRC to update everyone.

The inference in your post is that you have a good idea of the carbon tax regime. If that is the case would you be generous enough to share your knowledge here.

TIA

[Balance]

The inference in your post is that you have a good idea of the carbon tax regime. If that is the case would you be generous enough to share your knowledge here.

TIA

Not me, matey. I am just surprised that the experts here did not even bother to ask or debate the question until I asked. Surely NZO and PRC shareholders would be interested?

I have read that the emissions trading scheme will ultimately impact upon coal miners as upsteam and primary producers of carbon. How and by how much, itn will be interesting to know.

[shasta]

Not me, matey. I am just surprised that the experts here did not even bother to ask or debate the question until I asked. Surely NZO and PRC shareholders would be interested?

I have read that the emissions trading scheme will ultimately impact upon coal miners as upsteam and primary producers of carbon. How and by how much, itn will be interesting to know.

Fair not Balance

Only those holding NZO/PRC will be exposed to any "potential downside" to the Carbon tax regime.

Remember when Labour get the spanish archer, this regime may change!

You stay with the likes of your Chevron & Woodside Petroleum etc.

[arjay]

Tim23,
Sorry for delay in replying - I've been away for the weekend.

I think you missed my point - it's this: If a Co. is worth 10c or $10 per share in real terms, the value is relatviely meaningless to a shareholder unless the Co. issues dividends or other tangible forms of return to the shareholder. The only other real way is if the true value is reflected in the SP - and for NZO this is not the case.

[peterb]

Only those holding NZO/PRC will be exposed to any "potential downside" to the Carbon tax regime.

Remember when Labour get the spanish archer, this regime may change!



While I do think that secretly John Key is a narrow minded market-trusting/environment-neglecting right-wing capitalist, his political survival depends on the sustained illusion that he cares about middle class pet causes. Thus, any move to weaken, delay, or otherwise inhibit anything that is put in place to counter climate change will see a return to the post-Jenny Shipley doldrums.... or lower. Remember, John Key is not popular with the electorate for being a clever capitalist, but for being an everyone's-favoured-cause-embracing fence sitter.

[Nitaa]

Mr Balance. pop quiz.....and a slight diversion from nzo but i wanted to capture you on this thread

In your eyes NZO is a dog with rabbies because of Pike, Kupe cost blowout and other reasons that i am sure you can remind me of. I have some "acquaintances" who are seriously looking at a small stake in PPP. Is this a company to invest in at current values? why or why not?

best regards

[Anubis]

I see that AWE's next well was also dry... not having a good run!! With only Kopuwai left to go, I wonder what the implications will be for appetite for further exploration in the future around Tui?

AWE Ltd (“AWE”) reports that at 0600 hours today, the West Cape-1 well was
preparing to run wireline logs prior to plugging and abandoning the well. During the
week, the well was drilled 2,181 metres from 1,500 metres to a total depth of 3,681
metres. No significant hydrocarbon shows were encountered through the primary
objective Kapuni F Sands.
The West Cape prospect is located in the western Taranaki basin within PEP 38481.
The prospect is located approximately 20 kilometres west of the Tui Area oil project,
which recently started production.
At the completion of the operations at West Cape-1, the Ocean Patriot drilling rig will
be moved to drill the Kopuwai-1 well in PEP 38482.

[arjay]

Still lots of potential in the west of Maui area Anubis, but I agree - continued dry holes in what was touted as the biggest drilling campaign in NZ history must affect sentiment somewhere. Looking forward to drilling closer to Kupe.

[Bilo]

Yes Arjay
Closer to Tui, Maui, Kupe and Maari......this green fields stuff is hard on the shareholders.

[Bilo]

It is now Official!
NZ Herald 25th September
“In July the NZX Discipline panel's annual report showed that two broking firms and their advisers paid large sums of money to the NZX this yearfor breaches of stock exchangerules.
The firms and advisers involved were not named but the cases involved settlements of $161,000 and $80,000.
The larger of the settlements is understood to relate to the allocation of Rakon shares at the time of its float. An NZX firm and unnamed advisers took the highly sought-after stock for themselves rather than offering it to clients.

In the other case, understood to relate to the trading of shares in New Zealand Oil and Gas, an NZX firm and an adviser were penalised $10,000 and $70,000 respectively for "placing an order on behalf of a client to influence the closing price of a security".

So it is now official. An NZX insider was assisting his client to manipulate the (closing) price – as we new all along.
It is BS that these activities have no effect on the market and BS that insider activity only results in profits being refunded – to their own consolidated fund?

So will it be next year before NZX blow the whistle on the punter/inside accomplice who has had the deep pocketed short on NZO enabling manipulation of the share price virtually at will? We already know the outcome - no-one has been affected adversely.....technical infringement really.

[Bilo]

It is now Official!
NZ Herald 25th September
“In July the NZX Discipline panel's annual report showed that two broking firms and their advisers paid large sums of money to the NZX this yearfor breaches of stock exchangerules.
The firms and advisers involved were not named but the cases involved settlements of $161,000 and $80,000.
The larger of the settlements is understood to relate to the allocation of Rakon shares at the time of its float. An NZX firm and unnamed advisers took the highly sought-after stock for themselves rather than offering it to clients.

In the other case, understood to relate to the trading of shares in New Zealand Oil and Gas, an NZX firm and an adviser were penalised $10,000 and $70,000 respectively for "placing an order on behalf of a client to influence the closing price of a security".

So it is now official. An NZX insider was assisting his client to manipulate the (closing) price – as we new all along.
It is BS that these activities have no effect on the market and BS that insider activity only results in profits being refunded – to their own consolidated fund?

So will it be next year before NZX blow the whistle on the punter/inside accomplice who has had the deep pocketed short on NZO enabling manipulation of the share price virtually at will? We already know the outcome - no-one has been affected adversely.....technical infringement really.

[Dr_Who]

.. and you wonder why the public put all their money in the bank and properties and staying away from our sharemarket. :mad: :confused:

[arjay]

It doesn't seem right that one listed company (NZX) can benefit financially from the fraudulant activities of one their own customers against investors in a second company (NZO).

[Scuffer]

The government want investment in NZ companies and to pour cold water on the housing market, Cullen hates the fact that the average Joe puts his money into property hence the new superfund maybe they should stomp on this sort of activity and try to give the NZX a look of respectability to the general public.

[777]

Perhaps the fines should be made to a worthwhile group like the Shareholders Association.

[duncan macgregor]

I see nothing wrong with trying to manipulate the price in a free open auction, such as trading shares on the open market. Who cares, the blue eyed hold at all costs brigade wont be affected. Its only traders playing games with each other. I try, and i feel certain that the average buyer or seller try to sell at the top and buy at the bottom so stop your whinging, this game is for big boys and girls. It would be completely different to have inside knowledge before the event then miss use your position for capital gain. I will manipulate as much as i can in my own little way, on a free and open honest market.
If you look at broker recommendations for instance and what happens to them, then you might have reason for complaint. Macdunk

[shasta]

I see nothing wrong with trying to manipulate the price in a free open auction, such as trading shares on the open market. Who cares, the blue eyed hold at all costs brigade wont be affected. Its only traders playing games with each other. I try, and i feel certain that the average buyer or seller try to sell at the top and buy at the bottom so stop your whinging, this game is for big boys and girls. It would be completely different to have inside knowledge before the event then miss use your position for capital gain. I will manipulate as much as i can in my own little way, on a free and open honest market.
If you look at broker recommendations for instance and what happens to them, then you might have reason for complaint. Macdunk

Agree with you Macdunk, the NZX (& Securities Commission) have allowed continual "window dressing" & done nothing about it!

Window dressing is merely a nicer way of saying "SP manipulation".

Its time to out the firms/individuals/companies that do this & make them all accountable.

I'd like to see NZO respond to the market with some comments about this.

BWR?

[shane_m]

Call the Police!

[Toddy]

Agree with you Macdunk, the NZX (& Securities Commission) have allowed continual "window dressing" & done nothing about it!

Window dressing is merely a nicer way of saying "SP manipulation".

Its time to out the firms/individuals/companies that do this & make them all accountable.

I'd like to see NZO respond to the market with some comments about this.

BWR?

Shasta

Thats the beauty of the sharemarket. Its a market where people bid and offer for a share in individual companys. What does SP manipulation actually mean. Maybe there was a smart buyer at the end of play each day when this was going on picking up cheap stock for themselves.

I do not like however the example of share issues like RAK where the brokers pick and choose who gets the stock.

[shasta]

Shasta

Thats the beauty of the sharemarket. Its a market where people bid and offer for a share in individual companys. What does SP manipulation actually mean. Maybe there was a smart buyer at the end of play each day when this was going on picking up cheap stock for themselves.

I do not like however the example of share issues like RAK where the brokers pick and choose who gets the stock.

The thing i don't like about it, is in the same way GPG got a wrap on the knuckles over the Coates fine, it doesnt allow an even playing field.

You let companies/brokers off with that sort of behaviour with no penalty & whats next?

Selectively allocated shares introduces bias, & does no good to the market in general (in the same way private placements are made!) or shareholder interests.

But when you know the last day of the quarter invariably leads to SP manipulation to bolster broker portfolios, what is the NZX doing about it?

I like the idea of the earlier market close to "match up" limit orders, yet the markets still allows tiny orders lowering the closing SP.

When the integrity of the market is already in jeopardy (thru finance companies, non disclosures SKC, GPG etc), someone delibrately trying to trigger stop losses well below the daily VWAP should not be allowed.

I think the NZX has to step down from being the watch dog, & allow the Securities commission more power. At present being gate keeper & poacher isnt working.

NZO is a classic example of a company now producing & normally would attract a re-rating in the process, yet if we find a certain broker has been manipulating the SP, & capping it for there own benefit they should lose there NZX accreditation.

Imagine the outflux of clients from a broker that was "named & shamed".

Would introduce a disincentive for those trying to get around the rules & give the investing public greater assurity in the market itself.

A small fine over the NZO incident has caused the company & shareholders far more than a broker/advisor getting slapped with a fine, giving that they are still being protected!

[trackers]

ABN AMRO Craigs....


In other news: Activity Report out in two weeks? :)

[trackers]

2007 Annual Report out...


http://www.nzog.net/news/2007/2007NZOG_AnnualReport.pdf

[arjay]

Bummer - the AGM's in Wellington (for us northerners at least)

[boysy]

perhaps they herd us northerners were going to turn up asking serious questions

[arjay]

Yes - they probably want to discourage Digger I suspect. Also there was an issue with the last venue wrt sausage rolls (or lack of).

[Ripping]

1.5 million barrels sold to date, at about $NZ100 per barrel.. at least 18.5 million in NZO's coffers in less than two months.. not too bad

[boysy]

And that oils been flowing since that reports been printed. and big question is PRC starting to come right ?

[tim23]

Was Pike ever not right!?

[boysy]

the market has though not, so far anyway but perhaps now with t/o talk overseas this may change

[clips]

"but perhaps now with t/o talk overseas this may change"

what talk where.....??

[boysy]

not directly with PRC but with an aus coal company on the PRC thread they have more info but this is a post from digger hope he/she doesnt mind me coping it


New Hope Offers A$591 Million for Resource Pacific (Update2)

By Madelene Pearson

Sept. 26 (Bloomberg) -- New Hope Corp., an Australian coal miner, offered A$591 million ($515 million) in stock for rival Resource Pacific Holdings Ltd.

The bid values Resource Pacific shares at A$2.55 each, 31 percent more than yesterday's closing price, Brisbane-based New Hope said in a statement today.

New Hope exports about 65 percent of the coal from its Queensland mines to Asia, according to its Web site. It also has a 50 percent stake in Queensland Bulk Handling, a coal-export terminal in Brisbane. Resource Pacific operates an underground coal mine in the Hunter Valley, New South Wales, according to its Web site.

New Hope shares fell 8 cents, or 3.3 percent, to A$2.37 at 11:13 a.m. in Sydney, after closing at a record A$2.45 yesterday. The stock has risen 76 percent in the past year. Resource Pacific shares jumped 50 cents to A$2.45.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net

Last Updated: September 25, 2007 21:19 EDT


Seems to be a bit of interest in coal starting to slowly develope. Same thing could happen to PIKE once it gets producing.

[skinny]

Nice annual report. Interesting that the oil flow from TUI since starting is large enough that it positively affected New Zealand trade balance and will provide a short-term boost to GDP growth!

http://www.stats.govt.nz/products-and-services/media-releases/overseas-merchandise-trade/

I've been quite surprised actually that the share price has not performed much better given TUI has come on stream with absolutely fantastic timing as far as the price of oil is concerned. I suspect that part of the problem is that, to date, there is still little institutional interest in the NZO. One easy way to see this is that NZ's largest institutional player, the NZ Superfund, has only around $600k in NZO - less than invested in the likes of Cadmus Technology and Methven. (Note the NZ Superfund does not pick listed stocks, this holding is via its NZ equity investment managers: AMP, Brook Asset Mgmt and Fisher Funds.)

http://www.nzsuperfund.co.nz/external_investment_managers.asp?pageID=2145846741
http://www.nzsuperfund.co.nz/files/Equities%2030%20June%2006%20by%20Country.pdf

Why the lack of institutional support? Partly I think its because TUI is a fairly short-lived project and much of NZ's fund mgmt industry tends to go for long-lived assets. To the extent this is the case, Pike and Kupe coming on stream in 2008/9 will be a real turning point. But I suspect we wont need to wait that long to see interest pick up...

[boysy]

it was a good anual report and good to see some actual targets they are aiming for to

get reserves up to 25 mmbo and output upto 2 mmbo.

And perhaps an indication that they will help options be in the money come june next year

"one clear objective is to ensure that NZOGs value is fully recognised in the market place ahead of june 30th 2008 final date for option holders to excise the share options which the company has on issue "

[the machine]

Per Port Taranki web site it shows this vessel due.

Wonder if it is carrying the Ensco rig for Kupe.


Thu 04/10 00:00 WILLIFT FALCON AA oil rig ETA not berthing >> admiralty bay XX/NIL NIL 0m 0 0

M

[Oiler]

Per Port Taranki web site it shows this vessel due.

Wonder if it is carrying the Ensco rig for Kupe.


Thu 04/10 00:00 WILLIFT FALCON AA oil rig ETA not berthing >> admiralty bay XX/NIL NIL 0m 0 0

M

I suspect it might be the jacket for Maari....sitting in Admiralty Bay till they get the weather break.

[the machine]

I suspect it might be the jacket for Maari....sitting in Admiralty Bay till they get the weather break.


Oiler, the website says oilrig and as a forecasted arrival then its not a jacket for Maari.
Besides, thought Maari was still some time off before ready to do any installing.

Time will tell

M

[Crypto Crude]

arjay-Bummer - the AGM's in Wellington (for us northerners at least)

What date is it arjay?
Im itching to get along there, im not sure if I can...
:cool:
.^sc

[Nitaa]

For the ones who went to the AGM last year and have since been despondant with the board and management this year should have no qualms. It is your chance to ask the questions and if you let them off without them giving you a direct answer then you only have yourself to blame.

The point that i am making is that there have been some posters here who went last year with gripes and still have gripes now. You should either sell your shares or speak your mind. At least Duncan followed that rule but he didnt ask the qustions so he will never know.

My rating over the last 1 year is 7 out of 10. Tui is a hit. Kupe is doing well generally with potential in store and Pike still has some ways to go. i.e more cost blowout in the next 12 months.

[digger]

For the ones who went to the AGM last year and have since been despondant with the board and management this year should have no qualms. It is your chance to ask the questions and if you let them off without them giving you a direct answer then you only have yourself to blame.

The point that i am making is that there have been some posters here who went last year with gripes and still have gripes now. You should either sell your shares or speak your mind. At least Duncan followed that rule but he didnt ask the qustions so he will never know.

My rating over the last 1 year is 7 out of 10. Tui is a hit. Kupe is doing well generally with potential in store and Pike still has some ways to go. i.e more cost blowout in the next 12 months.


Yes there will be cost blowouts in the next 12 months,as there is with any current oil and gas project around the world.Some of the other blowouts make ours look piumy.But lets keep in mind the very near revenue blowout of Tui and the greater than currently allowed income that will eventuate from Pike and certainly Kupe.As time goes by we get ever closer to these revenue increases and eventually the market will be hit by that fact,whereas today it is still walling in the negative side of the equation.

[mattyroo]

I suspect it might be the jacket for Maari....sitting in Admiralty Bay till they get the weather break.

Oiler, as the Maari field is using a FPSO - the Raroa - it will not use a jacket.

I've been on holiday for the last few weeks and only just seen your comment about the compressor problems on the Umuroa.

It is always the compressors that cause the biggest grief on offshore installations. Do you know what the exact problems are? I imagine that as they have been surprised by the flows and water cut, they have probably also been surprised by the gas composition, which will mean the compressor will need tailoring to suit.

With the flow rates they have, they shouldn't need the compressors for gas lift, only re-injection at this stage, as flow rates decrease they will start to use them for gas lift.

If the compressors are not running, I would imagine they are flaring a lot of gas, are they fined for flaring? Typically companies are. Helen will be quaking in her boots seeing all that carbon being emitted into the atmosphere, if they are flaring!

[sideline]

Oiler, .......................................

If the compressors are not running, I would imagine they are flaring a lot of gas, are they fined for flaring? Typically companies are. Helen will be quaking in her boots seeing all that carbon being emitted into the atmosphere, if they are flaring!

Yes, but NZ's committment period starts only from 1 January 2008.
And liquid fossil fuels emissions start trading only from 1 January 2009.

They should have the compressor tuned by then....

[sideline]

meanwhile in other news (from Bloomberg):

Crude oil for November delivery rose $2.58, or 3.2 percent, to settle at $82.88 a barrel at 2:50 p.m. on the New York Mercantile Exchange, the biggest one-day gain since May 17. It was the second-highest close ever. Prices are 32 percent higher than a year ago. Futures touched $83.90 a barrel on Sept. 20, the highest since the contract was introduced in 1983.

............

Brent crude oil for November settlement rose $2.60, or 3.4 percent, to settle at $80.03 a barrel on the London-based ICE Futures Europe exchange. It was the highest close since the contract was introduced in 1989.

[airedale]

What date is it arjay?
Im itching to get along there, im not sure if I can...
:cool:
.^sc

Hi SC, AGM at 10.30, Friday 26th, Inter Continental Hotel, 2 Grey St, Wgtn...... The sausage rolls should be 5 star, like the hotel.:)

[digger]

Hi SC, AGM at 10.30, Friday 26th, Inter Continental Hotel, 2 Grey St, Wgtn...... The sausage rolls should be 5 star, like the hotel.:)

I will be there. Are you coming Arjay??

We have talked about NZO becoming a producer for many years now,so we should turn up to celebrate the 1/3 success of being there. Also to make sure TUI income is available to help get the other two projects into income ,before we go off on wild drilling schemes.Slow steady and sure is our best path ahead.
Hope to see as many as possible at the AGM. Wear your name tag.

[duncan macgregor]

I will be there. Are you coming Arjay??

Hope to see as many as possible at the AGM. Wear your name tag. I Dont really think that NZO share holders are that dopey that they cant remember who they are.
Anyone game enough to call themselves Macdunk. You could always find some old tramp lying in the street and stick my name tag on him. Promise him a sausage roll and a glass of plonk should do the trick. I would love to bleat innocence might be the fun event of the year. Macdunk

[Oiler]

Oiler, as the Maari field is using a FPSO - the Raroa - it will not use a jacket.

I've been on holiday for the last few weeks and only just seen your comment about the compressor problems on the Umuroa.

It is always the compressors that cause the biggest grief on offshore installations. Do you know what the exact problems are? I imagine that as they have been surprised by the flows and water cut, they have probably also been surprised by the gas composition, which will mean the compressor will need tailoring to suit.

With the flow rates they have, they shouldn't need the compressors for gas lift, only re-injection at this stage, as flow rates decrease they will start to use them for gas lift.

If the compressors are not running, I would imagine they are flaring a lot of gas, are they fined for flaring? Typically companies are. Helen will be quaking in her boots seeing all that carbon being emitted into the atmosphere, if they are flaring!

Roo.. surplus gas is being flared continuously other than the gas being used for the utilities, so I would imagine there could be "potential fines".

Could be quite sometime before gas is compressed...... months!! They dont need gas lift at the moment luckily.

[arjay]

Not planning to go at this stage Digger - need dividend to pay for a plane fare to Wellington first. Last time I went to an AGM in Wellington was for Southern Pet, when they gave out free bottles of Waihapa crude!

For those planning ot ask some 'tough' questions, I suggest you submit to the Co. before-hand in writing so they can prepare answers for the AGM. If you don't, you might get the old "we're running out of time so I'll be happy to answer some of your questions after the meeting [exit stage left]" routine.

[shane_m]

For those planning ot ask some 'tough' questions, I suggest you submit to the Co. before-hand in writing so they can prepare answers for the AGM.

there is no point as the company follow minimum reporting requirements, I asked questions through the NZO website.

(1) what NZO doing with TUI revenue?

(2) Gas compressor having problems?

(3) What are the propose of all the NZO subsidiaries?

so far no reply.

[boysy]

i must say its a tad easier to ignore a email than ignore a question posted point blank at the agm

[Dr_Who]

Can someone please post up the question and answers on here from the AGM? I am a JAFFA and cant make it to the Welly AGM. :confused:

[Ripping]

.........Last time I went to an AGM in Wellington was for Southern Pet, when they gave out free bottles of Waihapa crude!


I could fit my share of a days production on a little trailer.... wonder if they'd go for that.. ?

[the machine]

seem to recall comments attributed to TR that he would crack that bottle of champagne at this agm.

expect a bit of ramping to go with it and sp up by another 10c by then.

enjoy

M

[Tok3n]

what the?

"In the June quarter, growth was boosted by oil extraction and that will be a bigger factor next quarter as the Tui oilfield comes online."

http://www.stuff.co.nz/4218696a13.html

[Onthemoney]

Shareholders are we accountable to them - We still get paid......

[upside_umop]

dont know if many have noticed, but the depth is looking really good for nzo atm.
same with prc.
both them have more buyers than sellers and seemingly putting upward pressure.
first time i've noticed the depth like this..comments?

i also looked at a few charts, and some 'indicators' are close to being hit for nzo. watch closely for next couple of weeks..

[Dr_Who]

How do you get the depth? My broking firm website doesn have depth. :confused:

[upside_umop]

i use asbsecurities, but it appears you have to be a client to use their service.
same with direct broking, nationalbank etc. i tried a few others, google.finance, yahoo.finance, but no cigar either.

someone here might have a free sourced one, otherwise you may have to sign up to asb or direct broking.

[upside_umop]

Dunno what the specific rules are but as gas is pretty well the cleanest of the fossil fuels, in fact, the other end of the spectrum in comparison to coal, the liability would be minimal (in comparison).
And it would surely be up to the consumer of the fuel, not the provider, to pick up the tab for emissions ? i.e. Genesis, not Kupe JV.

wrt this, i've been doing a litte research and come across wikipedia, they always give a good write up. here goes an extract from http://en.wikipedia.org/wiki/Carbon_tax

"Natural gas
Emissions total 120.6 pounds of CO2 per thousand cubic feet, i.e., 60.3 tons per million cubic feet, so a tax of $100 per ton of CO2 translates to a tax of $6.03 per thousand cubic feet of natural gas[6]. At a price of between $4 and $10 per thousand cubic feet, a tax of $100 per ton of CO2 would raise natural gas prices by 60-150%.

For the purpose of looking at electricity generation: emissions total 117.08 pounds of CO2 per million BTUs[7], so a tax of $100 per ton of CO2 translates to a tax of $5.854 per million BTUs."

these figures though, are with pricing at 100 per ton (much higher than current, i've heard $30 a ton to be accurate) so these figures would be much less...not as bad as it seems.

[manxman]

The price of electricity is really determined by the costs of the next marginal generator. If there is a hydro/wind/geothermal surplus then this determines the spot price and thermal stations will shut down. When the demand is such that gas fired thermal capacity is being used, the price will rise for all electricity and the renewables make a big windfall profit. The consumer pays not simply a carbon tax on the price of gas, but on hydro as well.
This may be good for encouraging wind farms and discouraging electricity usage, but the big beneficiaries will be the guys with hydro capacity. Because geothermal likes to run on steady load, it is not a preferred option for backing wind power. Hydro does the job superbly, so the people with hydro storage will also pick up a premium for backing independent wind farms.
Having a hydro dam thus becomes a license to print money. They probably won't be building any more big ones because of the environmental difficulties. Buy one today.

Mx

[Dr_Who]

http://www.wtrg.com/daily/small/clfclose.gif

[shasta]

http://www.wtrg.com/daily/small/clfclose.gif

Might need a bigger scale graph - that $85 looks under threat!

[oldowl]

I am not able to attend the next AGM.

Would anyone attendending please ask the question:

How realistic is it to expect the NZOOD options being in the money come June 2008?

And

If the share price is not around $ 1.50 or higher at that time, is there a plan to postpone the exercise date?

Thanks

OO

[blockhead]

Old Owl, I suspect you are not a wise old owl, if that question could be wisely answered we would all be very well off come June next year, the head shares today selling for $1.00 would need to be worth $1.50 plus in which case it would be wise to sell the family jewels today and buy a truckload, 50% appreciation in 9 months is good profit.

The only possibility is an extension of exercise date (if allowed) other than that its a case of just taking our chances.

[shasta]

Old Owl, I suspect you are not a wise old owl, if that question could be wisely answered we would all be very well off come June next year, the head shares today selling for $1.00 would need to be worth $1.50 plus in which case it would be wise to sell the family jewels today and buy a truckload, 50% appreciation in 9 months is good profit.

The only possibility is an extension of exercise date (if allowed) other than that its a case of just taking our chances.

....and Blockie, NZO (then NOG) have extended the options before.

Personally, i think any positive drill results from the Kupe exploration, or a change in sentiment with Pike, & NZO might just scrap though...

$NZ 5m per week revenue & lets say around 38 weeks to go to expiry of the options (30 June 2008) = around $190m revenue (@ current flow rates) & remember we have "effectively" repaid our share of Tui JV costs.

NZO had $30m odd in the bank at the last quarter so by expiry of the options will be relatively flush with cash!

I'm more interested in what they do with it...:confused:

[shane_m]

I cant make it to the AGM as well, I haven't been able to get any information from NZO due to minimum reporting. Can some one please ask these questions.

(1) What is NZO doing with Tui Revenue?

(2) What is the propose of the subsidiaries? is management getting paid through subsidiaries?

(3) Whats is the current water cut at TUI?

You can have my share of sausage rolls at the AGM in return.

[shasta]

I cant make it to the AGM as well, I haven't been able to get any information from NZO due to minimum reporting. Can some one please ask these questions.

(1) What is NZO doing with Tui Revenue?

(2) What is the propose of the subsidiaries? is management getting paid through subsidiaries?

(3) Whats is the current water cut at TUI?

You can have my share of sausage rolls at the AGM in return.

As im in Wellington i shall endeavour to attend ...

The subsidiary question is fair, & i'll be happy to put that forward, remembering they cannot say anything that hasnt been announced to the market, so if its in the quarterly it may well come after the AGM.

Shane - I posted this on HC, re options for NZO's cashflow...

Even though NZO are receiving around $NZ5m revenue & cashflow each & every week, there are some downsides...

Kupe costs have increased again (another 10%) & Pike River needs more cash to get to production, & they need to raise the cash to sort the transportation issue.

NZO provided Pike's bankers Westpac with a "letter of comfort" to the tune of $NZ25m & its possible NZO may be asked for more...

With no more "exploration drills" in the pipeline (excl Kupe) the "drill & thrill" aspect has gone & the market is awaiting confirmation of what the cashflow will be used for, before re-rating the company.

IMO the cashflow should be used as follows (in order)

1. Repay Tui debt
2. Advance Pike River funds
3. Repay Kupe debt
4. Share buyback (assist the SP re option conversion)
5. Buy into "other" Australian JV's/ Farm in
6. Dividends (once tax losses are used up)

As you can see i favour debt reduction & getting the other 2 projects up & running before expanding into other areas, a bit conservative but prudent management

Reducing debt levels will enable NZO to seek acquistions, as they have 10 years + of revenue streams & significant cashflows from Tui & Kupe + Pike should contribute substantially whilst NZO continue to hold an interest.

My personal assessment is that NZO is worth around $NZ1.30 at present.

At around $1 looks rather undervalued for an undilluted market cap < $NZ300m earning substantial revenues as an Oil producer.

[clips]

from the annual report -

"one clear objective is to ensure that NZOGs value is fully recognised in the market place ahead of june 30th 2008 final date for option holders to excise the share options which the company has on issue "

sounds positively positive to me....

[JBmurc]

anyone know the current NZO depth on the NZX pretty weak on the ASX 86.5c not much in bids could be in the low 80's soon was keen on buying 80-100ks worth on NZX

[shasta]

anyone know the current NZO depth on the NZX pretty weak on the ASX 86.5c not much in bids could be in the low 80's soon was keen on buying 80-100ks worth on NZX

Tried to paste in the depth from ASB Sec - but the formatting was s$%&.

Buy Depth

2,000 @ 101
114,046 @ 100c
107,131 @ 99c
20,500 @ 98c
10,000 @ 97c
11,000 @ 96c
15,000 @ 95c
1,100 @ 90c
48,192 @ 83c
49,382 @ 81c

Sell Depth

52,000 @ 102c
117,969 @ 103c
31,600 @ 104c
22,371 @ 105c
10,000 @ 106c
9,000 @ 109c
39,000 @ 110c
11,000 @ 112c
30,000 @ 115c
10,000 @ 119c
10,000 @ 120c
5,000 @ 125c
10,000 @ 127c
10,000 @ 130c

[Toddy]

from the annual report -

"one clear objective is to ensure that NZOGs value is fully recognised in the market place ahead of june 30th 2008 final date for option holders to excise the share options which the company has on issue "

sounds positively positive to me....


Ahhh....... is this the same thing as maximising shareholder value. This would mean a major U turn for NZO management.

It would take.
1. Full disclosure.
2. Disclosure in a timely manner.
3. Encouraging long term institutional shareholders.
4. A stable board.
5. Manageing projects within budget.
6. No surprise dilution of shares via share placements.
etc etc


If this is the case then I'm in!

[Onthemoney]

Ahhh....... is this the same thing as maximising shareholder value. This would mean a major U turn for NZO management.

It would take.
1. Full disclosure.
2. Disclosure in a timely manner.
3. Encouraging long term institutional shareholders.
4. A stable board.
5. Manageing projects within budget.
6. No surprise dilution of shares via share placements.
etc etc


If this is the case then I'm in!

Treating their employers (shareholders) with respect..... Why do I laugh?

[shasta]

Treating their employers (shareholders) with respect..... Why do I laugh?

OTM

Whilst i understand your sentiment towards NZO, its is only the CEO that is culpable to the Board, & the Board is to us as shareholders ultimately. (The Directors work for us, appoint the CEO, & the Management work for CEO.)

Our options:

1. Vote out the directors that don't stand up for shareholders best interests, ie. ensure we have the right independent directors & not drones providing strategic direction to maximise returns.

2. Call a EGM & have the CEO removed in a "no confidence" motion.

Kind of extreme really!!!!

When i think of how Phillip Thomas, CEO @ Admiralty Resources (ASX:ADY)operates, a proactive visionary CEO creates wealth, & not surprisingly, a reactionary, self indulgent one destroys a companys reputation.

[arjay]

In lieu of fresh discoveries at Kupe the only way the SP will be optimized before June will be by the company making tangible returns to the shareholders. Like many shareholders who have contributed to building NZO over the years I am of the view that the time has come for the bucks to start rolling in the opposite direction.

[duncan macgregor]

In lieu of fresh discoveries at Kupe the only way the SP will be optimized before June will be by the company making tangible returns to the shareholders. Like many shareholders who have contributed to building NZO over the years I am of the view that the time has come for the bucks to start rolling in the opposite direction.You gotta be kiddin mate. NZO will feather their own nests, and keep the company up and running for new spec plays.
If you dont understand that then you are in for a short sharp education at your expence. The options are not worth the paper that they are printed on, but that wont stop the optimists buying into pass the parcel at the end. You lot get nothing back, as long as there is another expensive hole in the ground ready to drill. The only long term hope is if they strike it big somewhere in the future. Macdunk

[arjay]

You may have a point McDunk and it will be interesting to see what signals come out of the AGM. I've said what I believe NZO need to do if they want the ODs exercised. However, like you I'm not holding my breath and sold all of my options for 30c a while back (a good move in hindsight). I've also started selling down my NZO holdings as I believe NZO is now reaching maturity so it's time to start investing elsewhere.

[Onthemoney]

You may have a point McDunk and it will be interesting to see what signals come out of the AGM. I've said what I believe NZO need to do if they want the ODs exercised. However, like you I'm not holding my breath and sold all of my options for 30c a while back (a good move in hindsight). I've also started selling down my NZO holdings as I believe NZO is now reaching maturity so it's time to start investing elsewhere.

Well done Arjay - more and more shareholders of this company are singing on the same hymn sheet.

[oldowl]

Tui oil boosts dollar, and economy
4 October 2007
Trans Tasman Political Letter
(c) 2007 The Main Report Publications Ltd

Tui Oil is already having an impact on the country's external trade figures, and may reinforce an upsurge in the NZ dollar which put it on a 8-week high. Some analysts believe it is heading back to the US80c mark. By the end of September eight tanker loads, each of 300,000 barrels, had been shipped to Aust refineries, and those associated with the venture say it is on track to produce 10m barrels in its first full year. In August, Tui Oil hoisted exports to Aust to new levels, as the value of crude oil exports reached a new record monthly total. With the sale price topping the $100 a barrel mark, foreign exchange earnings over the first 12 months from the Tui Area project could go as high as $1bn. While production from the Tui fields may taper off quite rapidly, the Maari oilfield, which is expected to have a 10-year life at 35,000 barrels a day is due to begin production later in 2008, followed by the Kupe gas/condensate field in 2009.

So talk of the NZ dollar becoming a "petro-dollar" has some foundation. While the bulk of profits from Tui will flow to the shareholders of Australian Worldwide Exploration which has 42.5&#37; of the project, and Mitsui with 25%, there should be a strong stream for listed NZ company NZ Oil and Gas with 12.5% and its one-time associate Pan Pacific Petroleum with 10%. NZOG is talking of its share of revenue from Tui being "in excess of $100m" in the first year.

[JBmurc]

Yes any NZO holders who are happy with $1 for there shares please sell in the last week of OCT --I,ll be more than happy to take them off you hands

[neopole]

that adds up to around 38cps revenue in the first year!
im sure there is room for a divi.

[sideline]

that adds up to around 38cps revenue in the first year!
im sure there is room for a divi.
Yes, perhaps as a capital return if there are no imputation credits available yet.

[arjay]

Let's hope so Neopole, although as one poster pointed out a while ago any dividend may be fairly small. Bermuda made a good post a while back pointing out that with Tui being backed up by Kupe and Pike cashflows NZO is set to reap something in the order of $100 million per annum for quite a few years to come. A success or two in outstanding projects (Kupe area - Tui area drills, Felix etc) would stretch that out without neccessarily increasing per annum earnings significantly. So, without a new blue-sky venture there isn't much to push the SP out of the $1-$1.50 range. A decent sustained dividend stream would do it, but I doubt it would be above 10c per share per annum (with the rest probably fed back into the exploration pokie machine), which is the sort of level needed to attract cash out of deposit accounts into shares pitched at this level. Hence my earlier comment about NZO having reached maturity. Like McDunk, I am coming around to the view that the ODs are out of the money, but then again punters can get awefully sentimental about this stock at times so who knows how things will swing before June. A hefty upgrade of a gushing Tui may be all that's needed. I rather suspect that when NZO issued ODs at $1.50 exercise price they had in mind a high probability that at least one of the last 3 drills would have come in.

[digger]

that adds up to around 38cps revenue in the first year!
im sure there is room for a divi.


That put NZO on a PE of 2.7

Not too many other companies have ever matched that.

[Onthemoney]

That put NZO on a PE of 2.7

Not too many other companies have ever matched that.

I wish all my revenue was profit that would be great.

[dsurf]

Sunk costs expensed prior periods - may be that 50%+ is profit - pe at 5.4x is not to shabby either

[digger]

Sunk costs expensed prior periods - may be that 50%+ is profit - pe at 5.4x is not to shabby either

Are you and On the money telling me after all these years that i do not understand PE.

Now i could be wrong and have long thrown away my early books ,but PE always meant the SP is divided by the companies earnings.It does not mean the SP is divided by profit. Profit is a somewhat changable thing and can for any year be whatever the company wishes with a few manipulations. Earnings on the other hand are countable and seen as fixed. So you good people that still have books handy please look up the definition as it needs sorting out. To me it means Sp divided by earnings and that would give NZo a PE of 2.7

[oldowl]

Here you are Digger :-)

From Wikipedia, the free encyclopedia

(Redirected from PE ratio)• Find out more about navigating Wikipedia and finding information •Jump to: navigation, search
The P/E ratio (price-to-earnings ratio) of a stock (also called its "earnings multiple", or simply "multiple", "P/E", or "PE") is a measure of the price paid for a share relative to the income or profit earned by the firm per share. A higher P/E ratio means that investors are paying more for each unit of income. It is a valuation ratio included in other financial ratios. The reciprocal of the P/E ratio is known as the earnings yield.


The price per share (numerator) is the market price of a single share of the stock. The earnings per share (denominator) is the net income of the company for the most recent 12 month period, divided by number of shares outstanding. The earnings per share (EPS) used can also be the "diluted EPS" or the "comprehensive EPS".

For example, if stock A is trading at $24 and the earnings per share for the most recent 12 month period is $3, then stock A has a P/E ratio of 24/3 or 8. Put another way, the purchaser of stock A is paying $8 for every dollar of earnings. Companies with losses (negative earnings) or no profit have an undefined P/E ratio (usually shown as Not applicable or "N/A"); sometimes, however, a negative P/E ratio may be shown.

By relating price and earnings per share for a company, one can analyze the market's stock valuation of a company and its shares relative to the income the company is actually generating. Investors can use the P/E ratio to compare the value of stocks: if one stock has a P/E twice that of another stock, all things being equal, it is a less attractive investment. Companies are rarely equal, however, and comparisons between industries, countries, and time periods may be misleading.

[upside_umop]

income is earnings, and pe is calculated from npat.

i think the company has already given guidance on income/earnings/profit of 70 million ebita.

revenue means poo, if u want revenue per share, get postie plus, or warehouse or something retailly if revenue is what spins ur wheel.

[Dr_Who]

I usually do my P/E based on NPAT and not revenue. Revenue doesnt mean crap if you cant produce a profit for the shareholders.

[neopole]

I usually do my P/E based on NPAT and not revenue. Revenue doesnt mean crap if you cant produce a profit for the shareholders.
exactly Dr Who, we know NZO is going to produce a profit, the question is.....
is the profit for the shareholders, or for TR's quest of an elephant.
as a producing explorer, the profits should be divided between the search for new wealth and sharing the current wealth, why else prop up a company that spends its entire profit on exploration?
before the discovery, this company was an explorer and had high risk attached to its shareprice..... re the sub 50cents.
the ceo cant ask option holder to convert at $1.50 if there is no return for there investment, except the hope of a big strike.
so, i believe there will be a steady flow of divi's, if not this year, then definately next year, with the ceo making strong comment regarding divi's.
otherwise, there are plently of other sub 50cent companies out there which are also producing..........

[duncan macgregor]

exactly Dr Who, we know NZO is going to produce a profit, the question is.....
is the profit for the shareholders, or for TR's quest of an elephant.
there are plently of other sub 50cent companies out there which are also producing.......... I think you will find bigger and better holes in the ground in the future, why give it back to you lot?. The company job security to the top dogs first and foremost, with huge salaries, and perks for as long as they can stretch it out. The options dont matter they have enough coming into the coffers from now on. Its pass the parcel time folks watch the option price slowly drop from now on. Macdunk

[tim23]

Get over yourself Duncan - bag another company for a change

[arjay]

I would like to see a freeze on increasing payouts to NZO staff and directors until they commit themselves to sharing the wealth with the shareholders. Hence, I will be voting against Resolution 4 until such a committment is given.

[manxman]

The options dont matter they have enough coming into the coffers from now on. Its pass the parcel time folks watch the option price slowly drop from now on. Macdunk

But if the directors can get the options converted at a cost of a 15cent dividend, then they have a company which will be pushing into the top 10.
The way the oil flows are coming in, the company will be paying tax by the end of the June 08 year and we should get at least some imputation. My pick is a tempting divvy announced before June 30, but with a record date after June 30, to drag the options into the money.

I see a big danger that the options will be exercised, but the share price will weaken markedly post June 08. Didn't this happen when the OCs were exercised? Didn't someone of Digger's aquaintance lose a farm on this sort of play?

The exercise of the ODs will suck in $300 million, and its hard to see the sharemarket having that big an appetite for NZO. Will the Cullen fund really buy in big against the advice of McDunk? Can TR stick enough lipstick on this pig?

I don't think the gradual decline scenario for the ODs will hold for long. There may be a collective moment of horrible realization, and they will go over a cliff, and any attempt to revive the situation after that will look awfully like manipulation. If the directors want to avoid this situation there needs to be an early announcement on the dividend outlook. If it doesn't happen at the AGM then the ODs are indeed in trouble.

Mx

[upside_umop]

sorry tim, i agree with duncan. hes been saying its pass the parcel time with options for a while now and its true. can you really see the shareprice being $1.62 by june? thats what the option holders are betting on atm for them to break even.

they will have to drill kupe other prospects for any chance of share price appreciation near 1.50, but even that is a very long shot.

the perfect scenario would be:

-further strikes at kupe (drilling 2nd quarter 08?)
-pike ahead of schedule
-further reserves upgrades on tui
-further drilling in tui permit area (if awe wants to)
-more permits gained

if all these happened, 1.50 is possible...a big IF imo though.

[shane_m]

it is more likely od expiry date to be extended, I asked this question through the NZO home page, so far no reply perhaps due to minimum reporting.

[sideline]

I would like to see a freeze on increasing payouts to NZO staff and directors until they commit themselves to sharing the wealth with the shareholders. Hence, I will be voting against Resolution 4 until such a committment is given.
I have also voted against the directors' pay increase. However I voted for the esop-shares - making
directors shareholders seems like a good idea to me.

[Onthemoney]

it is more likely od expiry date to be extended, I asked this question through the NZO home page, so far no reply perhaps due to minimum reporting.


They didn't do it last time so why do it now.... You are dreaming - sell if you live in the hope of this.

[Onthemoney]

Are you and On the money telling me after all these years that i do not understand PE.

Now i could be wrong and have long thrown away my early books ,but PE always meant the SP is divided by the companies earnings.It does not mean the SP is divided by profit. Profit is a somewhat changable thing and can for any year be whatever the company wishes with a few manipulations. Earnings on the other hand are countable and seen as fixed. So you good people that still have books handy please look up the definition as it needs sorting out. To me it means Sp divided by earnings and that would give NZo a PE of 2.7

Nothing personal. Revenue is not profit Digger...... Revenue is not earnings either..... You are referring to Price to Sales ratio.

[shasta]

Nothing personal. Revenue is not profit Digger...... Revenue is not earnings either..... You are referring to Price to Sales ratio.

OTM

Whilst you have always had a balanced "negative view" on NZO, the last couple of posts suggests you don't see what lies ahead.

I respect your views, but Shane is right NZO have extended options before & could do again.

Whether you want to look at revenue or profit, NZO is massively undervalued on a forward P/E basis.

A market cap around the $270m level suggests NPAT of $27m on a P/E 10.

NZO is better than that & you know it.

What remains a mystery to you & i, is what NZO do with there cashflow.

That alone will determine whether NZO gets re-rated to around $1.30, or languishes around the $1 mark.

I always thought NZO was more protected than PPP, & now im not so sure, both look very undervalued at these levels & being a cash box isnt what they are here for.

I have my doubts about NZO - but they still are in a great position heading into 2008/09.

[Nitaa]

Here are the questions one would need to ask yourself.

What you you want if you were the CEO of NZO? Would you want the OD's exercised and at what price? By that i mean do they go on a PR teail to ramp up the SP to get it over the line?

Do they need to have the OD's exercised given the impact on dilution?

How do they expect to achieve this?

If they see it not viable short term will they look at extending the expiry date?

How will the market react to whatever decision or road they take?

Depending on the boards statergy what are all the pros and cons? IMO NZO will be looking at their business model/plan that doesnt just cover the next 9 months. Too many seem fixated on the OD's short term. If you have punted on them then its a big gamble. The ones who are lookingf for a quick buck out of this company will more likely get burnt as has many in the past. IMO the ones who have been paitient will be rewarded as the company is in a growth stage. I personally dont see it as a mature company because KLupe and Pike are yet to come on stream.

Remember, DS talked about possible aquisition. Is this this on the table? Are they going to consolidate and improve their balance sheet before buying further assets? The big one for me is Pike. My thoughts were that their intention was to sell out within a year of listing. Then they could concentrate on their core business..oil & gas.

One thing i will look at doing after selling down options over the last few months is look at buying up again. The SP looks a bargain at current commodity prices. There WILL be further cost overuns but that has to be expected. The ROI in the medium to long term looks fantastic.

I may be wrong but right now many of the greedy traders or investors have or are still leaving NZO and that will create good opportunities for the savy investor. Disregard this stock at your peril.

I cannot perosnally make the AGM this year but i reiterate an earlier post of mine. Put up or shut up. If you dont ask the questions and ask for a straight answer then you only have yourself to blame. It makes me laugh that all the moaning of some shareholders but they havent got the gusto to ask their board what they are doing with their money. DM last year turned up but to my recollection didnt even ask them any hard questions. If you ask and they cant give you a straight answer then you know sopmething isnt right. Reminds me of Brett King (DPC) 3 years ago wasnt even prepared to answer some questions. Because of that alone i soon bailed from the company.

[Dr_Who]

I think you will find bigger and better holes in the ground in the future, why give it back to you lot?. The company job security to the top dogs first and foremost, with huge salaries, and perks for as long as they can stretch it out. The options dont matter they have enough coming into the coffers from now on. Its pass the parcel time folks watch the option price slowly drop from now on. Macdunk


NZO is abit like RPL, undervalued and have the management is a DOG factor. If they take out the top guy running the show and replace them with a person that the market respects, both RPL and NZO will put on 30%.

If both of these companies replace the top management I will buy a decent chunk. Till then I only hold a small amount for fun as I believe both of these firms have so much potential and under valued.

A real shame!

[Nitaa]

Dr Who. Who is running NZO? I thought DS was unless hes a puppet to TR.

[Onthemoney]

OTM

Whilst you have always had a balanced "negative view" on NZO, the last couple of posts suggests you don't see what lies ahead.

I respect your views, but Shane is right NZO have extended options before & could do again.

Whether you want to look at revenue or profit, NZO is massively undervalued on a forward P/E basis.

A market cap around the $270m level suggests NPAT of $27m on a P/E 10.

NZO is better than that & you know it.

What remains a mystery to you & i, is what NZO do with there cashflow.

That alone will determine whether NZO gets re-rated to around $1.30, or languishes around the $1 mark.

I always thought NZO was more protected than PPP, & now im not so sure, both look very undervalued at these levels & being a cash box isnt what they are here for.

I have my doubts about NZO - but they still are in a great position heading into 2008/09.

You have to look at the reason before for the extension of the options - they wouldn't do it this time, otherwise they would have done it last time.

What NZO is worth is completely different to market price - price is what you pay value is what you get (worth is what you get). The only way to recognise this worth is to buy or sell on market.

If you have followed this share for the past 20 years you would understand why the market treats it the way it does.

The only way to for a shareholder to capitalise on the worth of a share is by selling on market or receiving capital repayments or dividend payments.

[Onthemoney]

Dr Who. Who is running NZO? I thought DS was unless hes a puppet to TR.


Yeah who is pulling whose strings????

[Dr_Who]

Dr Who. Who is running NZO? I thought DS was unless hes a puppet to TR.


Dont need to ask me. The NZO share price tells you who is pulling what strings making what works. LOL. Honestly, I would buy more NZO and RPL if they replace these chimps with a respectable leader. I am only repeating what the people in the market is saying which is reflected in the SP.

[digger]

Nothing personal. Revenue is not profit Digger...... Revenue is not earnings either..... You are referring to Price to Sales ratio.

Yes OTM it seems you are correct and I was using price sales ratio. Frankly i pay no attention to any of these ratios and have long stopped thinking about them.See everything through fundenamentls or market reaction. Market reaction to NZO is in sharp contrast to fundamentals and in the end one will come through. Some many years ago i did read about price sales ratio as being the most indicative of future value as it represented the early signal that things would change. Cheers. Will we see you at the AGM?

[Onthemoney]

Yes OTM it seems you are correct and I was using price sales ratio. Frankly i pay no attention to any of these ratios and have long stopped thinking about them.See everything through fundenamentls or market reaction. Market reaction to NZO is in sharp contrast to fundamentals and in the end one will come through. Some many years ago i did read about price sales ratio as being the most indicative of future value as it represented the early signal that things would change. Cheers. Will we see you at the AGM?

Don't know yet about AGM - might not be able to contain myself.... price to sales is still a useful ratio though.....

[Crypto Crude]

MackD,
you continue to bag oil companies that are looking at exploration as a direction for the future...

New Zealand oil and Gas is up 10&#37; or so this year and we got 3 high impact exploration drills at a chance for a much bigger future and they didnot come through.... So NZO still made a return with big potential return which was well worth taking on... at that time it was the type of investment I rated.... im now not so sure for the next period for a few months as we wait for more things to happen, NZO could boom or stay in limbo, we just dont know......one thing is safe and that is the future of this company I highly rate... sort term uncertaintly persists to keep NZO lidded....
....Going back to your fetish with oil stocks that explore....
.... are you suggesting that your AGM's AGS's MCR's shouldnot explore?....ReSoUrCe stocks that you so dearly love have to explore aswell... are you suggesting that its good for your stocks and not good for ours... get real buddy....... Next year will be more of the same with Felix (JV partner required and momoho 2nd quarter drill)... You go on about the options and how they are worthless, the holders should understand the risk, that level of risk caused them to explode 200% after you warned me off them and NZO...... NZO is undervalued, One indicator is the high price for the OD's....
The OD's are still trading over 11c which looks very pricey, but it is a signal that the shares are undervalued or with some sort of combination of over valued options... NZO trading par at $1 and no volatility in the shares lately which is not what Option holders want... its been trading in the same range for jonks.......
....

With either Pike in production before expiration date for the Options or a discovery from one of a few exploration wells next year will get them there easily ( 2 exploration wells prior to OD expiry ? and possibly a Felix drill but looking unlikely before option expiry)...Pike will trade around $1.25 just prior to first production I believe... and much much more after...
....some serious questions need to be addressed at the AGM... which I will no doubt address if I attend, but im still fence sitting on that...
im not actually holding any Nzo investments ATM... Theres still life in the options ....Pike derisks further and into produciton, Kupe production wells complete and project more advanced, bonus exploration targets with big upside and less risky than previous drills (namely momoho)...
20% stake in Felix free carried would go down well, And high end oil prices to throw into the mix.... I dont see much hope for any more oil reserves upgrades...not until project is much further down the track as I believe...
Market announcement of Tui project paying for itself (breakeven) should go down well, if it comes at all...
....
The biggest mistake NZO made this year was to sell its investment in PPP, The exposure NZO had through TUI was decreased and left me feeling 'why would JV sell if project was that great'? .....
I think it sent a bad signal to the market.... NZO needed to free cash to fund Pikes expenses before the Pike IPO raised cash to pay NZO back.... AWE had its own problems, PPP dropped big time, and NZO pulled back sharp profits that we rode all the way up, and some of us some of the way back down....
Dividends seem to be a major issue, and its all just rubbish talk...
focus on the company and then whatever NZO's capital gain or distribution of wealth will not make you any better off depending on which way it happens...
But IT majorly impacts on Option values
....
Mackdadunk, you need to accept that oil companies explore for oil....
it is the basic function of an oiler... without it then wheres the future?...
The long term revenues from NZO's 2 projects... and 1 short term big revenue earning will cause NZO to rise alone, and exploration in the mix will always be present to put newZ Oil on a new level...
:cool:
.^sc

[duncan macgregor]

SHREWD CRUDE, The first thing when investing to accept is that you are an investor only, not someone that passes the bibles about at sunday service. If you fall in love with a sector or company in the market place it shows a great sign of weakness in your ability to be a rational investor. YOU GOTTA WIPE THEM LIKE A DIRTY BOTTOM AND MOVE ON MATE WHEN THEY FOUL UP. We need all sorts of companies in this economy.
I rubbish the company attitude to investors. MACDUNK

[Mr Tommy]

http://www.stuff.co.nz/4229249a13.html

Enso rig arrives for Kupe drilling
By JAMES WEIR - The Dominion Post | Monday, 8 October 2007

The gigantic drilling rig for the $1 billion offshore Taranaki Kupe gas field project has arrived, marking the start of the drilling work for three production wells.


The Ensco 107 offshore drilling rig arrived from Singapore yesterday.

It will drill wells into the Kupe reservoir three kilometres below the surface, about 30km off the Taranaki coast. Gas from the Kupe field is expected to flow from the middle of 2009.

Kupe will be big enough to supply about 15 per cent of New Zealand's present total gas demand.

It is just a fraction of the size of the Maui gas field.

Kupe is expected to produce 254 petajoules of natural gas, 1.1 million tonnes of liquid petroleum gas and 14.7 million barrels of light oil (condensate).

Australian company Origin Energy is the project operator and a 50 per cent shareholder in Kupe, with state-owned power company Genesis holding 31 per cent. Origin also owns 51 per cent of Contact Energy.

Origin is presently trying to raise $200 million from New Zealand investors through the issue of preference shares.

The offer closed on Friday, but the company has not yet announced the results.

A large part of the gas from Kupe will go to Genesis.

During the drilling campaign, about 100 workers will live on the rig.

Weighing about 16,000 tonnes, the Ensco 107 stands 157 metres high and is 63m wide. The rig's first job will be to install the wellhead "platform jacket" about 30km off the coast of Hawera.


No mention of the other 15% shareholder !

[tim23]

SC - how can you attend the AGM without an invite let alone expect to speak?

[JBmurc]

I find it quite amazing how alot of investors don't rate the materials & resources etc sectors be it- grain,oil or U308 gold etc and of recent been selling out of alot of there shares
-My portfilo for one which is made up 100&#37; of these sectors hasn't done much at all lately after falling 20% from the sub-prime scare (yet alot of the company's future incomes are growing fast.)

Yet the facts shown in there prices tells us how valuable they are
-Oil for one at $40bbl people where blown away talking up massive profits for the sector now its $80bbl alot of investor are so ho-hum with classic lines-etc- of the oil companys being risky investments because of there short term assets and your'd be better of investing in solid companys like retail or banks stocks much safer.

-Do these retail investors who buy companys like- JBH -really understand how much JBH relies on Crude oil-Not only from there mostly plastic Items there selling
-But the buyers who full-up there cars to get there from there wallets where there pay comes from most of there jobs which also relies on crude oil to mantain there incomes.

-Or the banks which have there rates increased by the inflation of Oil which effects nearly everthing.

-NZO has gone from an explorer to a producer yet the market doesn't really take much notice,and more so find reasons why not to invest in these sectors lately

[dsurf]

1/ I would like to see NZO management start talking to the broker community more and in particular the share analysts. I say this not because I rate or like share analysts but purely as a way to redress some of the appalling spin from the NZ media who the company management have misled (Pike especially) for many many years.

2/ NZR freely issue statements saying "our margin is X", A one cent movement in the NZ$ versus US$ means a movement of X for npat. A cent movement in the price of oil = x movement in NPAT.

Transparency is paramount for investor confidence (AKA MErrill's sub-prime exposure) as how else do they feel comfortable in the company statements. Does NZO know the answers to the questions in 2/ above? I assume not or the research reports would contain them. Maybe they need to find out and publish it!!!! They only have ONE cashflow stream to work out.

Please release this to the market after hiring someone capable who can work it out!!! The investors need to know and you have a duty to inform the market.

If you want some help working it out please contact me or any of the other 10 posters on site capable of working it out.

We have had the tales - Now we want the facts!!

[bermuda]

dsurf,traderchan,
The Company has already given several indications of future earnings. I doubt whwther they would have the time to divulge a whole lot of detail to sharetrader enquiries.

Have a look at the Annual Report.The anticipated mboe's are there out to 2013. Big numbers...and reading between the lines it is easy to see that Pike is going to have a much bigger impact with coking coal prices set to soar.

[Dr_Who]

-NZO has gone from an explorer to a producer yet the market doesn't really take much notice,and more so find reasons why not to invest in these sectors lately

Thats why all good NZ assets will eventually go to overseas hands. I sometimes wonder why we complain so much about foreign investments when we ourselves bag our own firm and not support them. On the other coin, there have been too many promoters who run the firms like it is their own piggy bank losing public confidence. Two edge sword.

[dsurf]

dsurf,traderchan,
The Company has already given several indications of future earnings. I doubt whwther they would have the time to divulge a whole lot of detail to sharetrader enquiries.

Have a look at the Annual Report.The anticipated mboe's are there out to 2013. Big numbers...and reading between the lines it is easy to see that Pike is going to have a much bigger impact with coking coal prices set to soar.

Bermuda - I want to know how much profit NZO get for a barrel of oil with the US$ worth 70C and the price of tapis at 80$. Knowing how many barrels are available is LAZY REPORTING by management. These numbers are assembled by the other operators ie NZO management do not have to do anything. Why can't ALL the owners of this company and not just management know the Tui operating costs??? It is not commercially sensitive as the costs are sunk.

[Crypto Crude]

mackdadunk,
Im not in love with the oil industry its just where I choose to invest...
I dont understand resource sector like others here do so why should I take on that risk !.... and when I have made those sorts of plays ive gotton it wrong...
Im sure you will understand that im oil and here to stay...
....
:cool:
.^sc

[shasta]

mackdadunk,
Im not in love with the oil industry its just where I choose to invest...
I dont understand resource sector like others here do so why should I take on that risk !.... and when I have made those sorts of plays ive gotton it wrong...
Im sure you will understand that im oil and here to stay...
....
:cool:
.^sc
Good ann out on the ASX

http://www.asx.com.au/asxpdf/20071008/pdf/314znxvqhmb1kv.pdf

I would have thought this would have added 5c to the SP, NZO on the ASX up 4&#37; to 86c.

Interesting to find out how they intend getting to the 2mmbo per year reserves!

[airedale]

Hi Shasta, I had an email from NZOG to tell me that the presentation had been posted. No complaints about keeping the shareholders informed.

[tim23]

4% up on the ASX is still only about NZ $1.01 so its just catch up!

[digger]

From todays presentation we have that to date[but i do not know what the last shipment date was] that NZO has sold 300,000 barrells or in NZ dollars approx 36 million. Given that production started on 1 aug we have about 72 days of earnings so still coming in at half million a day.
I am reposting this as a back up to one about 3 weeks ago showing income is still on track. But this means that total year income to from 1 aug 07 to 1 aug08 will be near 180 million. Maybe more as oil price will continue to track up,and not just the 100 million bermuda has stated before.
I note that in 09 income is expected to drop as show before in reports and also in this latest presentation. This expected drop could be why NZO is doing so poorly on the NZX. Share investers do not like things ever going backwards. However it is more than likely that the drop will never happen in reality. This because TUI will have more oil and the price will be higher.
Just my thoughts. I sure am not selling.

[clips]

looks like the PR machine is warming up........
for all the disillusionment(sp?), disappointment and bagging of this company
the volume of shares traded in the last few weeks seems light ?

[neopole]

have a read of the AED thread on the asx board.
makes you wonder about NZO.....

[Dr_Who]

Oil to soar above $90 next year says expert
By MARK SUMMERS


MANAMA: Oil prices will soar above $90 per barrel next year, a Bahraini economist has predicted.

Bahrain Economic Society senior economist Mohammed Habib Ali told the GDN that a combination of the growth of economies such as China and India, continuing global population increases and rising consumption within top oil-producing nations will push the price of crude to record levels next year.

He also said it was time GCC countries used their high surpluses to fund renewable energy projects and begin moves to end fuel subsidies in the region.

"Oil will reach above $90 next year and the problem is not politics or economics as much as it is geology," he said.

"Oil by many estimates has reached its peak and both production and the number of new oilfields found are decreasing - but at the same time world population is growing and is estimated to reach its peak around 2030.

"Therefore we can only gather that we will witness prices continue to shoot up in the next few decades to come unless the world economy goes through a tough economic depression or a breakthrough in some competitive alternative energy is found leading to immediate and sudden adopting of its usage - something which at the moment you would say appears very unlikely," he added.

Mr Habib Ali cited the example of China, where crude oil imports for the first half of this year were up 11.1 per cent on the previous year, as typical of global trends likely to increase oil prices.

"Chinese industries have not mastered the use of energy efficiency techniques and use 20-100pc more energy per unit of output than the US and Japan.

"Chinese consumers purchased more than seven million vehicles last year and demand is increasing by 20pc per annum," he said.

The economist warned that the top five net oil exporters - Saudi Arabia, Russia, Norway, Iran and the UAE - registered a 3.7pc increase in their own consumption from 2000 to 2005, a trend that is set to continue and one which will put further pressure on fuel prices.

"Net exports are decreasing due to major exporting countries consuming more of their own oil, hence the need to abolish subsidies and think of innovative ways to conserve energy within those countries.

"People in these countries continue to consume more of it because they are consuming it for cheaper relative to all other commodities that are rising in price. People are just going to abuse this more and more," he said.

That's why countries such as Bahrain should look to abandon fuel subsidies, he explained.

"I am not for abolishing it all at once, but I believe there should be a gradual letting go. You cannot let go of anything suddenly - that would just shock the economy and that is not the right thing to go with anything.

"They should do something with the subsidy money such as invest more into renewable energy. This money should go into something very much constructive and productive."

The consequences of higher oil prices for countries like Bahrain could be serious, he added.

"You will probably experience a bit more inflation and that is exacerbated by the devaluation of the dollar so you are getting hit by both sides.

"You can expect further rises in real estate prices, especially if interest rates are kept where they are right now and not increased substantially," he said.

"By accumulating higher surplus in the short-run, the GCC has a perfect window of opportunity to start diversifying its economy by investing their petrodollars into alternative energy technology," he said.

[clips]

valid ? comment from over the tasman.....



"The problem with NZO lies in the inability of the chairman to communicate adequately with shareholders and the investing market in general. He is a very particular accountant who jealously protects the balance sheet and is forever fearful of any predator who might sneak up on the company and take control. This makes him secretive on detail and something of a control nut. Dissent on the board is not accepted, conferring control on both tenure and board behaviour. All this has created negativity in market perception, to which is added the loss of credibility consequent to over promising on past exploration. Despite this loss of confidence and consequent default of institutional fund support, the company have behaved perfectly ethically and will soon reap the rewards of 3 excellent energy projects. Those investors alienated by past failings have for the most part sold out, though it must be noted that 5 patient individuals with quite large holdings might still threaten the price with any overhang should they too become disillusioned. We now await the next phase of NZO maturing to a cash rich, productive oil/gas/coal producer when almost certainly a new wave of investors will become the dominant force on the share registry. The speculative blue sky traders are fast fading. "

[bermuda]

I am meeting with David Salisbury next week. If any poster has any relevant questions on NZO or Pike please either email them to me or post them on this thread. I will post replies on this thread after I have cleared them through David. Cheers

[trackers]

I am meeting with David Salisbury next week. If any poster has any relevant questions on NZO or Pike please either email them to me or post them on this thread. I will post replies on this thread after I have cleared them through David. Cheers

Oh, nice :)

1. Whats the chance of a dividend in the near future?
2. What do they believe is the likelihood of being taken over at current SP.
3. the coy mentions that they want to improve value for shareholders, how exactly do they plan to do that...?

[airedale]

Hi Clips, where did you get that quote from? What is the source on the other side of the Tasman?

[boysy]

bermuda it would be greatly appreciated if you could ask the following

what steps if any will be taken to ensure options are excised ?

if NZOG will increase there disclosure to market and shareholders ?

how if posible NZO will get brokers to change there stance about NZOG ?

What is Tui revenue being spent on ?

What are updated projected earnings from TUI ?

How PRC will effect NZOGs revenue ?

chhers

[shane_m]

In addition to boysys six questions,

(7) What is NZO doing with Tui Revenue?

(8) What is the propose of the subsidiaries? is management getting paid through subsidiaries?

(9) Whats is the current water cut at TUI?

(10) Why is there no reply to inquires submitted buy shareholders to NZO through the NZO website?

(11) Is the OD expiry date getting extended ?


Look forward to the answers...

[clips]

sharescene

[rimu]

1. Whats the chance of a dividend in the near future?


or even medium-term future?

thanks :)

[trackers]

Must say... I'm very much looking forward to the quarterly activities report due out at the end of the month showing how much dinero's flying in via TUI!

[boysy]

lets hope the pr machine is turned on also i mean honestly you would think with all the good news that NZO have had ( reserves upgrade/ higher oil prices / lower than expected water cut ) they would be blowing their own horn. Lets just hope the figures in the quarterly speak for themselves.

[digger]

Must say... I'm very much looking forward to the quarterly activities report due out at the end of the month showing how much dinero's flying in via TUI!


This quartely always seems to come out a little earlier than other quartely. Like not at the end of oct but in time to be read before the AGM.Now the end of march quartely takes the full month of April to get printed.But remember this report is only two months production not the full 3,so the first full one will be in Jan 08 covering oct,nov dec.

[digger]

Bermuda,i would be very suprised if David would be releasing anything this close to the AGM. Most of the questions already asked i would be expecting to be fully covered at the AGM. Still it is a way of getting the feel of the shareholders and the questions out in advance.
My queiry is why is the SP so low given all the positive news that is flowing.Also when the water cut gets to the origional expected amount is it fair then to assume that 28 million barrels are left to develop?

[peterb]

What do people think about this announcement from AWE?

AWE’s Kopuwai-1 drilling update
AWE Ltd (“AWE”) reports that the Kopuwai-1 well is at a depth of 3,876 m. Current
activity is pulling out to change the bit.
Since the last report, the well has been drilled from 2,310 metres to 3,876 metres. Oil
shows were encountered in the Kapuni F Sand over the interval 3,655 to 3,690
metres, but the logs recorded while drilling indicate that the sandstone beds are either
poor quality or finely interbedded over this interval.
Once the well reaches total depth of approximately 4,050 metres, wireline logs will be
run in order to assess the economic significance of the F Sand interval.
Kopuwai-1 is in New Zealand’s western Taranaki basin in PEP 38482, approximately
10 kilometres north of the Tui Area oil project in 125 metres of water.

[shasta]

What do people think about this announcement from AWE?

AWE’s Kopuwai-1 drilling update
AWE Ltd (“AWE”) reports that the Kopuwai-1 well is at a depth of 3,876 m. Current
activity is pulling out to change the bit.
Since the last report, the well has been drilled from 2,310 metres to 3,876 metres. Oil
shows were encountered in the Kapuni F Sand over the interval 3,655 to 3,690
metres, but the logs recorded while drilling indicate that the sandstone beds are either
poor quality or finely interbedded over this interval.
Once the well reaches total depth of approximately 4,050 metres, wireline logs will be
run in order to assess the economic significance of the F Sand interval.
Kopuwai-1 is in New Zealand’s western Taranaki basin in PEP 38482, approximately
10 kilometres north of the Tui Area oil project in 125 metres of water.

From an NZO perspective not much, it doesnt concern us!

[shasta]

I am meeting with David Salisbury next week. If any poster has any relevant questions on NZO or Pike please either email them to me or post them on this thread. I will post replies on this thread after I have cleared them through David. Cheers

Bermuda

Thanks for the offer to relay comments to DS.

1. I would like to know how NZO hopes to achieve it's stated target of 2mmbo per annum, whether by outright acquistion, new exploration, or established farm ins, & what is there preferred option?

2. I would also like to know any of NZO's future contractual (or otherwise) committments with there current JV partners (AWE, PPP & Mitsui), & have they had talks with other Australian/NZ O&G companies?

3. Lastly, the GSB - Do NZO have any plans to apply for permits down there, & if not, is Taranaki still a viable option for NZO, or will they head to Australia in future?

Thanks again :cool:

[peterb]

From an NZO perspective not much, it doesnt concern us!

Obviously not directly, but if it proved commercial, AWE and Mitsui may want to negotiate with the rest of the Tui JV to tie it back to the Urumoa: while this would obviously mostly benefit AWE, it would also improve the lifetime of the Tui field, thus increasing recoverable reserves for NZO. Also, AWE is the operator of a number of NZO's permits with remaining prospects, so for them to have confidence in Taranaki is important for a good portion of NZO's future drill prospects. Also, more generally, good exploration results are good for permit holders in the area in general: they increase investor confidence in the area, they make project finance a wee bit easier, and critical industry mass ultimately reduces costs for all the players involved.

I'm not trying to ramp this announcement: I'm not sure if it's good or bad news. I was just thinking maybe someone could decipher the technical terms they used in the announcement.

Disc: hold AWE

[shasta]

Obviously not directly, but if it proved commercial, AWE and Mitsui may want to negotiate with the rest of the Tui JV to tie it back to the Urumoa: while this would obviously mostly benefit AWE, it would also improve the lifetime of the Tui field, thus increasing recoverable reserves for NZO. Also, AWE is the operator of a number of NZO's permits with remaining prospects, so for them to have confidence in Taranaki is important for a good portion of NZO's future drill prospects. Also, more generally, good exploration results are good for permit holders in the area in general: they increase investor confidence in the area, they make project finance a wee bit easier, and critical industry mass ultimately reduces costs for all the players involved.

I'm not trying to ramp this announcement: I'm not sure if it's good or bad news. I was just thinking maybe someone could decipher the technical terms they used in the announcement.

Disc: hold AWE

Perhaps Oiler2, Shrewd Crude, Mattyroo could assist? :rolleyes:

[peterb]

Yeah, hopefully. But you see what I mean?

[shasta]

Yeah, hopefully. But you see what I mean?

I get what you meant, re-reading the ann, but given the $5m a week NZO pockets hasn't budged the SP an inch, i'm not holding much hope that NZO may benefit from AWE's non JV exploration.

The big Taranaki offshore drilling campaign has been largely disappointing & although nothing is a given in the O&G game, the Taranaki area has a better than avergae industry "strike rate".

As i posted to Bermuda before, will be interesting to hear David Salisbury's comments on whether NZO stays in the Taranaki basin or tries elsewhere?

[mattyroo]

3. Lastly, the GSB - Do NZO have any plans to apply for permits down there, & if not, is Taranaki still a viable option for NZO, or will they head to Australia in future?

Bermuda,

I would just like to expand on Shasta's third question.

Does NZO have any intention of moving further out in the Taranaki basin? i.e to the deep water prospect areas such as Romney.

[mattyroo]

Obviously not directly, but if it proved commercial, AWE and Mitsui may want to negotiate with the rest of the Tui JV to tie it back to the Urumoa: while this would obviously mostly benefit AWE, it would also improve the lifetime of the Tui field, thus increasing recoverable reserves for NZO. Also, AWE is the operator of a number of NZO's permits with remaining prospects, so for them to have confidence in Taranaki is important for a good portion of NZO's future drill prospects. Also, more generally, good exploration results are good for permit holders in the area in general: they increase investor confidence in the area, they make project finance a wee bit easier, and critical industry mass ultimately reduces costs for all the players involved.

I'm not trying to ramp this announcement: I'm not sure if it's good or bad news. I was just thinking maybe someone could decipher the technical terms they used in the announcement.

Disc: hold AWE

I don't see any reason why it could not be tied back to the FPSO. The only inhibitors would be: JV agreement, distance from the FPSO and if the well was at a significantly different pressure to the Tui well.

As you point out, the more "critical industry mass" certainly reduces costs and generates some more enthusiasim in prospects. Whether this is a good or bad thing going on the last few dud wells is a moot point.

[peterb]

Cheers for the insight mattyroo. From that announcement, do you think that they have discovered an (if not commercial) geologically significant deposit of oil: ie significant volumes of oil have migrated along the same northwest-southeast diagonal up from Tui? I guess it adds persuasion to the notion of a more extensive working petroleum system in the F-sands. Anyone know what "poor quality or finely interbedded" sandstone beds means?

[sideline]

meanwhile in other (surely totally irrelevant, sorry to be slightly off topic) news from Bloomberg:

Oil Rises to Record on Concern Turkey May Invade Northern Iraq

By Margot Habiby and Robert Tuttle


Oct. 12 (Bloomberg) -- Crude oil rose to a record $84.05 a barrel in New York on concern Turkey may seek to quell Kurdish rebels by invading northern Iraq, a country with the world's third-largest oil reserves.
...................
Crude oil for November delivery rose 61 cents, or 0.7 percent, to close at $83.69 a barrel at 2:50 p.m. on the New York Mercantile Exchange, a record settlement. Earlier, the contract touched $84.05, the highest since futures began trading in 1983.

Nymex futures were up $2.47, or 3 percent, this week. They are up 37 percent this year.

Today's intraday high was less than a dollar from the all- time inflation-adjusted high reached in 1981 when prices jumped because Iran cut oil exports. The cost of oil used by U.S. refiners averaged $37.48 a barrel in March 1981, according to the Energy Department, or $84.73 in today's dollars.
..................
Brent crude oil for November settlement rose 40 cents, or 0.5 percent, to close at a record $80.55 a barrel on the London- based ICE Futures Europe exchange. Brent was up $1.65, or 2.1 percent, this week.

Turkey's government will present a bill to parliament by next week authorizing a possible incursion across the border within a year, ..................................


So the saga continues

[Dr_Who]

I cant really see Turkey invading Iraq. Turkey is desperate to get into the EU and wants to be in the good books. Most people in Europe is anti Bush and against the invasion of Iraq. The notion that Turkey will invade Iraq is total nonsense.

[upside_umop]

isnt turkey already in the eu? no no im wrong..one of those countries joined, bulgaria or something?

[winner69]

I cant really see Turkey invading Iraq. Turkey is desperate to get into the EU and wants to be in the good books. Most people in Europe is anti Bush and against the invasion of Iraq. The notion that Turkey will invade Iraq is total nonsense.


Turks have to sort the Kurds out somehow ... the Kurds are really pissing them off

I think the Turks are serious - Turkeys PM was quoted as saying the other day about the world (ie US) retailiation “If such an option is chosen, whatever its price, it will be paid,” and saying this about the US “Did they seek permission from anyone when they came from a distance of 10,000 kilometers and hit Iraq? ..... We do not need anyone else's advice.”

No doubt all of one big game ..... Turkey a key supply route for the US to Iraq and then all those US claims of genocide againt the Armenians

[wk6332]

NZOG boss sticking to his guns
By GARRY SHEERAN - Sunday Star Times | Sunday, 14 October 2007



Come wind, come rain, oil explorer David Salisbury is sticking to his guns.


The government might decree all new electricity generation be renewable and not thermal, but the new boss at NZ Oil & Gas (NZOG) is gearing up his company to find more gas to fire thermal power stations. He has hired five top geo-scientists and a commercial manager from overseas as the core of a new 17-strong development team for the New Zealand-listed oil explorer.

"Sure, the new emphasis on renewables could cast a cloud on our activities, but there will still be times when the lakes aren't full and wind turbines stop turning," he said.

Having just spent $110 million on three projects the new Tui oilfield, the Kupe gasfield and the Pike River coalfield Salisbury is wasting no time to find more fuel for thermal stations.

Although he won't comment, it's likely NZOG is running a ruler over oil and gas assets owned by big Texan company Swift Energy, which is quitting New Zealand.

Exploration industry analysts say the government's new energy strategy, which is down on gas-fired power stations, is a factor in its decision to go.

On Friday Energy Minister David Parker said the government was considering legislation to prevent any new baseload thermal generation being built, whether by state-owned companies or the private sector.

Swift is now considering offers for its local assets, which include the Rimu-Kauri and Tawn fields, two natural gas processing plants, an oil processing plant and oil and gas pipelines.

On Salisbury's prospective shopping list is also the next Economic Development Ministry auction of permits to explore for gas and oil in onshore Taranaki, due for later this year or early next.

With all the talk of phasing out thermal generators, the exploration industry was not expecting a rush of interest like there was for the Great South Basin permits.

"It's going to be increasingly difficult to get these offers away," said Petroleum Exploration Association chief executive John Pfalert.

But Salisbury is keen to broaden NZOG's exploration focus, which has up till now been in offshore Taranaki with joint venture partners.

He's especially interested in onshore deep-well exploration below 4000m. "With new technology, and high oil and gas prices, such wells could now be commercially feasible," he said.

Then there is the list of known prospective drilling targets that NZOG has had in its book for some time. The first of them, the Hector-1 well south-west of Tui, disappointed in August.

NZOG had estimated the Hector prospect might contain 60 million barrels of recoverable oil. But the drill encountered no significant hydrocarbons.

"Oil exploration is a risky business we calculated only a 20% chance of success at Hector," said Salisbury. At the same time, he said, those were the odds being given to France to beat the All Blacks last weekend.

The next big hope is the Momoho prospect, south-east of Kupe, which will be probed by the Ensco rig after it has drilled three production wells in the Kupe reservoir.

While Salisbury is not ruling out the possibility of projects outside New Zealand for NZOG, local exploration will be the focus.

Salisbury has joined NZOG as the company migrates from its exploration to development and production phase.

Oil has started to flow from Tui, and NZOG will start to see significant revenue streams flow for the first time.

Total revenue for 2006-07 was $18m, and $7.5m the year before. Revenues could top $100m in 2008, mainly from NZOG's share in Tui oil production.

Then in 2009 it will benefit from its 15% interest in the Kupe gasfield, with first production beginning mid-2009.

Salisbury has worked in the oil and gas industry for a decade, first with Petrocorp (later Fletcher Energy), then Preussag and later OMV in Vienna.

He was appointed chief executive of NZOG in April when Gordon Ward vacated the position to spearhed Pike River Coal Co, which has since listed, and in which NZOG has a 31% stake.

[the machine]

nzo just hit 90c au.

with the ensco rig arriving then expect to see som nice pictures soon of it on location installing the jacket, before drilling the 3 kupe production holes.


wonder if tui development costs will be repaid by time of agm.

M

[boysy]

nzog spent $33.6m us on TUI by now they should have almost recouped that even with conservative figures as follows

lets say average of 45,000 bopd for the 75 days oil has been flowing with NZO share 12.5 &#37; and at $100 barrel

45,000*0.125*75*$100 = 42,000,000 nz

[shasta]

nzog spent $33.6m us on TUI by now they should have almost recouped that even with conservative figures as follows

lets say average of 45,000 bopd for the 75 days oil has been flowing with NZO share 12.5 % and at $100 barrel

45,000*0.125*75*$100 = 42,000,000 nz

Good day for NZO too, up 4c (NZX) & PRC up 5c

The O&G Weekly still bullish on NZO

[Mr Tommy]

Oil smashes $86 for the first time
Crude prices reach record high on worries about declining oil inventories, OPEC says production by non-member countries may fall; Turkey-Iraq tension.
October 15 2007: 3:28 PM EDT


NEW YORK (AP) -- Oil prices surged higher than $86 a barrel Monday for the first time after OPEC said crude production by non-member countries is likely falling even as global demand for oil is rising.

The price for light sweet crude settled at a record $86.13 a barrel, up $2.44 from Friday's $83.69.

Prices were also supported by concerns Turkish forces will pursue Kurdish rebels into Iraq, disrupting oil supplies, and by technical buying by investment funds.

Monday's intra-day high was $86.20 a barrel, breaking Friday's peak of $84.05.

[Dr_Who]

Oil prices at these level makes NZO look cheap. :)

[upside_umop]

soon it cant get any better for nzo...in oil terms.
the call option comes in at $86.25 wti.

[Lion]

NZO up 6 in Aus yesterday, Tapis over $87, $NZ down a little ;)

[boysy]

Though not much depth on buyers side even with all this news on ASB securities

[sideline]

soon it cant get any better for nzo...in oil terms.
the call option comes in at $86.25 wti.

Call options should long be gone.
If the upcoming quarterly report does not clarify the status (quantity,strike price,expiry date) of
the call options before the AGM, could please somebody at the AGM ask the relevant question for those details and feed the answers back here for the rest of us who can't make it.

[upside_umop]

as ive said before, and stated in the may presentation, the call options were from june 2007 - 2010. we are within that period, so should be within the restrictions of the call options.

but yes, somebody check up at the agm.

[bermuda]

Almost a year ago at the AGM Mr Radford advised that based on his expectations the price of oil would rise to approx $US90 per barrel by the 2007 AGM.

He also advised that ABN AMRO valued NZO at $NZ1.60 and that was back in October 2006.

Since then there have been 3 drill disappointments but I would put money on Kupe


Delivering substantially increased reserves through additional adjacent fields.Add on a Tui reserve upgrade plus further reserve potential and you have the ingredients for a big shareprice leap particularly with Pike which is well under the radar.

Pike will benefit enormously through the lift in coking coal prices which are forecast to rise by at least 25% in the next round of negotiations betwen the aussies and the Japanese/china.The current spot price is $US150 per tonne, well above the $US96 used in Pike's model.

Oil supply is getting tighter everyday and Parker's decision to disincentivise gas exploration will be overturned by the next National party.

[sideline]

as ive said before, and stated in the may presentation, the call options were from june 2007 - 2010. we are within that period, so should be within the restrictions of the call options.

but yes, somebody check up at the agm.

I checked on the NYMEX some time after NZO announced the hedging which call options where in
existence at the time (=open interest).
The furthest out existing call options in the US$86, US$87 bracket were then for August 2007. Anything
further in the future was either $85 or $90 at that time. Long term (=several years ahead) options are only
traded in 5$ steps anyway.
I also remember that initially there were calls for 228000 (from memory) barrels, and a later announcement
reduced that to 186000 barrels. The drop coincided nicely with a bunch of June 2007 call options which
expired on the NYMEX. So that was the status as at 30 June 2007.
According to what I saw on the NYMEX the remaining 186000 barrel calls should have been July and
August ones.
Only the $50 puts should extend to 2010.

[The Plunger]

...

Oil supply is getting tighter everyday and Parker's decision to disincentivise gas exploration will be overturned by the next National party.

On the positive side, wellhead gas prices are bound to rise as realistically there's no show of meeting that 90% target, so known discoveries - "kupe" - will be worth a lot more !!!

Small companies like TAG oil / L&M must be mighty pee'd off with Govt, basically just ups the threshold for economic gas discoveries by quiet a significant margin. Methanex might as well just pack up and leave as well.

[sideline]

a prediction about POO in a Bloomberg article:

...........................

``It's going to soon hit $90 and go north of $100 next year,'' said Peter Schiff, chief executive officer of Darien, Connecticut-based brokerage Euro Pacific Capital, with $700 million in customer accounts. ``We should see $150 to $200 oil in the next two to three years because of the drop in the dollar. Once Asian countries allow their currencies to appreciate, demand will explode there.''


..........................


Maybe we should throttle TUI back a little in the short term????

[boysy]

its already being trottled back it could produce more than the current 45,000ish bopd

[trackers]

NZO winding up nicely - expect to see a good announcement in the next.... two weeks :D... with quarterly activity (i.e NZO counting the cash). Good times

[Toddy]

I'm back boys. I just bought myself a nice tidy bag full of NZO's. I could not resist as the current SP is looking cheaper by the day.

[neopole]

looks like small time punters and speccies are moving in again,
is this the beginning of the end of $1 shares?
or are the sheep just grazing untouched fields?
im happy that i have finished my accumulation faze.

[Dr_Who]

My energy portfolio is looking very healthy. :)

[Toddy]

looks like small time punters and speccies are moving in again,
is this the beginning of the end of $1 shares?
or are the sheep just grazing untouched fields?
im happy that i have finished my accumulation faze.

Last time I grazed on NZO grass it was about TWO WEEKS off being tasty and mature. I got sick so moved onto greener pastures.

The grass is looking better this spring.


Baa

[boysy]

good to see 5:1 buy sell ratio at the moment on ASB securities . And with no announcements as such this could be seen as a change in sentiment about nzo and its future prospects ?

[bermuda]

Just watching a commentary on CNBC re the oil price. The commentators are still referring to oil as a commodity.!! For goodness sake.....it is a precious resource.

I recommend everyone to read 'Twilight in the Desrt' by Matt Simmons and then google his latest presentation.

I hope NZO throttle back Tui to 30000 barrels per day because oil will be $US150 at least by 2010. Throttling back not only preserves the field but also allows more oil to be pumped out. And on a DCF basis...and assuming $US150 per barrel in 2010 it would be prudent.

The whole Oil Industry is at breaking point not just due to geopolitical factors but supply struggling to meet demand. The 200 year oil window we have all enjoyed is about to be closed .....not slammed ,..but gently closed.

No wonder Mr Radford (CEO ) recently upped his holdings

[neopole]

my post wasnt directed at you toddy,
while you posted i was writing mine.

but i hope you have a good feed this spring......... try not to get the staggers.

[Oiler]

Just watching a commentary on CNBC re the oil price. The commentators are still referring to oil as a commodity.!! For goodness sake.....it is a precious resource.

I recommend everyone to read 'Twilight in the Desrt' by Matt Simmons and then google his latest presentation.

I hope NZO throttle back Tui to 30000 barrels per day because oil will be $US150 at least by 2010. Throttling back not only preserves the field but also allows more oil to be pumped out. And on a DCF basis...and assuming $US150 per barrel in 2010 it would be prudent.

The whole Oil Industry is at breaking point not just due to geopolitical factors but supply struggling to meet demand. The 200 year oil window we have all enjoyed is about to be closed .....not slammed ,..but gently closed.

No wonder Mr Radford (CEO ) recently upped his holdings

You're on to it Bermuda. I am with you, we arent going to see cheap oil again. I guess if the mainstream media or the major oil companies were to come out in public and say "we are running out of oil" all hell would break loose.

On another note we dont need Miz Clarke trying to kill the developing oil industry in this country with her politically correct ass covering posturing. She needs to get real :mad:

[upside_umop]

i tend to disagree that oil will hit 200 or even 150 a barrel.
think of it logically.
we have just broken all time inflation adjusted highs from back in the 70s. see what it did then? imagine if it was to hit 200 a barrel, this is say 2.5 times what its weighted average approx over last 4 weeks. that means, at the pumps, petrol will cost 2.5*1.60 = $4 a litre. if the nzd was to drop (which will happen), add at least 30-50% on that. $5.20-$6 a litre? c'mon, think about it fundamentally, nz is a reasonably well off country and not many/if any would own a car at those prices. it would be the same for the rest of the world...
it may eventually hit those prices, but not in real terms...i dont even see how it can hold at these levels. usa has the largest oil reserves in the world (enough for the states for 100 years) which are economically recoverable at $30 a barrel. do the maths, but ill take it while it comes with shares in oil companies...although its a pity nzo/ppp are only starting to move there was no strike on drills.

[Oiler]

i tend to disagree that oil will hit 200 or even 150 a barrel.
think of it logically.
usa has the largest oil reserves in the world (enough for the states for 100 years) which are economically recoverable at $30 a barrel. do the maths, but ill take it while it comes with shares in oil companies...although its a pity nzo/ppp are only starting to move there was no strike on drills.

Upside Down...

how do you come up with the idea the US has enough oil reserves to last 100 years???? I am sure there are a lot of people who would love to know where all these low cost reserves are. ANWR is a no go zone so dont even include that in your calculations. The world is waiting ..:)

[upside_umop]

the oil shale reserves in the us. read it in the austrailian weekender one day at uni.
recoverable at $30 as they have to heat the shale up which big rods which make the oil seep out and then they can recover. what they're waiting for is certainty that oil will stay this high. remember in the 70's (i dont, but again, i've read), that oil companies set up camp trying to extract oil from us shale, the oil price slumped and they lost billions (yes, billions in the 70's, that was a lot of money). now, they wont go near there with a barge pole until they have certainty oil price doesnt collapse.

look at any oil reserves by geographical location and you will see the states has the highest by far, i thought you would have known this oiler.

i ask you the question, would you pay $4 a litre to fill up?
fill up 5 times and its worth more than my car!

[arjay]

Don't agree with your $4/litre Upside. Petrol may be $1.60/litre, however only a fraction of that is made up of the price of crude. Assuming refining costs, GST and the rest of aunty Helen's taxes don't change I suspect oil at $200/barrel would work out somewhere this side of $3 per litre (anyone got a figure?). They already pay those levels in some parts of the world.

[Nitaa]

If petrol ened up at $3 per litre or so and stayed there for some time then people would get acustomed to it. Back in late 70's or ealry 80's petrol was 99.9 cents per litre. It cost me $90 to fill up the Valiant yet i was only on $200 per week.

Only2 or 3 years ago many thought that oil at $50 was far fetched. Even when there was talk of possibly hitting $80 most laughed. If it does hit $100, $150 or $200 people will see it as reality and adjust accordingly. Just like CNG, LPG was the big thing in the early 80's other fuel options will become more viable. $200 per barrel is not the end of the world. Just possibly get used to it.

[Hoop]

UU..... if there is one thing I have learnt about markets, it is the illogical actions that can take place in the marketplace in times of extreme demands or uncertainty....so I now expect anything no matter how absurd it may seem to me now at the present day

You asked the question whether I would pay $4/litre at the pump? ...yes I would if I had no other choice.

Would this happen within the next few years?
Oil shocks do happen and we haven't had one for a while...so it is not impossible.

[upside_umop]

Don't agree with your $4/litre Upside. Petrol may be $1.60/litre, however only a fraction of that is made up of the price of crude. Assuming refining costs, GST and the rest of aunty Helen's taxes don't change I suspect oil at $200/barrel would work out somewhere this side of $3 per litre (anyone got a figure?).

yeah your right, i was being rather illogical on that one. didnt think about it too indepth.
anyone know an approx formula to work it out? taxes will remain the same and are applied for the end consumer, which means would increase linear with production costs. the world bank was suggesting of nz increasing their gst to reduce inflationary pressures...



They already pay those levels in some parts of the world.

they do already pay around the $3 a litre, your right again, but their top selling vehicle isnt a v8, and they mostly run diesel. their exchange rates are reasonably stable, compared to ours, so it cant change much apart from fluctuations in the oil price. the question is, would they pay much more? ie at 200 a barrel.

thinking about it more, the reason why some are saying it will hit that price is because of the usd declining further. in that case it shouldnt it have too much of an effect on foriegn purchases..but im sure it would, its never equal.



If petrol ened up at $3 per litre or so and stayed there for some time then people would get acustomed to it. Back in late 70's or ealry 80's petrol was 99.9 cents per litre. It cost me $90 to fill up the Valiant yet i was only on $200 per week.

nita, you talk of a supply shock and other fuel options. fuel options now are getting more and more viable. sure they take a few years to get up and running, but it will sort itself out before oil hits 200 a barrel imo. i doubt anyone will come to party and have a go at the us shale for a while either. 1 billion barrels per square mile...amazing.

im not fully aware of how the supply shock occured back in the 70's, can someone explain if circumstances are similar? and how it would occur from here?

refining must have gotten a little more efficent since those days wouldnt you think? or maybe just a reduction of taxes etc...

can china/india the upcoming consumers, afford to pay that much more out of their already little disposable income?

we all know how inlastic gasoline is...but there must be a point where that stops, and becomes elastic and nz will be like the netherlands with bicycles from here to amsterdam.

also, what on earth were you doing driving a valiant around at those prices?

[Crypto Crude]

shrewd crude report :cool:

some very interesting topics ATM...
first of all, Great couple of days for NZO... backed up by PRC on a charge.... great for my NZO friends....
happy to see PRC run in the face of stiff opposition here at ST...
I reckon NZO sp will be strong after AGM ;)

....
Upside down....
Im with Bermuda and Oiler around high future oil prices,
it will get incrementally higher as time passes...
oil willnot run out, it will just be depleted to the point where it will become so expensive for the general population that we will be forced to stop consuming....consumption will go to the rich, or necessary input as raw material to create final product....
there are so many reasons why oil price ^ is the case.... and I guess thats a whole new thread's debate....

going back to your reasoning of saying that 'why is oil so high when we have shale idea'?
Yes Shale has some massive numbers in barrels terms, but Shale is far from the answer at this stage due to technological and enviornmental reasons amongst others.... Inground resource is just that, in the ground... it means nothing when I go to the petrol station and want to fill up.... its all about having the barrel in your hand... which is the underlying problem....

facts: oil shale provides .0001 of World Energy
:Oil shale contains 1/10 the energy of Oil
:Oil shale contains 1/6 the energy of coal
:$500m electricity expense per year to produce 100,000 barrels of oil shale per day....
:60% of worlds oil shale in Colorado and Utah...
Oil shale is capital intensive, inefficient, messy, a big polluter, consumes a massive amount of energy to produce....( 3 barrels of water for every barrel of oil)...
Shells scientists have concluded that "blasting, digging, hauling, roasting, disposing, and revegetating millions of ton of shale ore would never be economically viable or environmentally acceptable"....
....
At this stage technological advances are not quite there to produce oil shale....
The one idea (patented by Shell) is to somehow create some underground furnace and squeeze oil shale to the surface, but we are still awhile off that.... Can Oil shale takeover from conventional oil?... and will it halt decreasing oil supply?.... I dont think so...
with oil consumption at 80 something million...NO nation has ever produced more than 16,000 barrels per day in oil shale....
If you believe in the Idea then have alook at GRV... billions of barrels in oil shale resource, 20 something million market cap.... been watching it for years, and its done nothing.....


1....im not fully aware of how the supply shock occured back in the 70's, can someone explain if circumstances are similar? and how it would occur from here?
2....can china/india the upcoming consumers, afford to pay that much more out of their already little disposable income?

1.... 70's oil spike due to Iran invading Iraq or vice versa... factors nowadays are alittle different but more intense because of the demand, supply side problems and ever tighting excess capacity which will be minimal to none in 2012 and beyond... but the threat of a spike is there now, next year, and beyond.. A future oil shock will be on a different level to the 70's one... 70's was spike up and spike down.... I dont believe that next shock will be like that, but more like a sustained shock... events like
Hurricanes, rebel attacks middle east, terrorism, war, and the further tension of increasing demand, cartel Opec straining supply and no incentive to change (extra capacity is minimal anyway), supply decreasing... if a problem comes up that cant be sorted out immediately, then we have prolonged spike due to the tight market... it willnot not take much to tip the scales..... back in the 70's b4 the spike excess oil capacity wasnot so tight...

2.....yes they can afford to pay even with increasing prices... to fill a car up is not really that expensive... it just appears so for us as NZ Govt slaps on taxes every which way possible, oil is still cheap... When I was in China this year it cost me 8 yuan or $1.6 for a 20min to 25min taxi ride which was cheap as....thats on top of expenses to run car, depreciation etc...
back to the question,
..the problem only gets bigger as India and China become richer...
The main point is that every economy needs oil to grow... as soon as oil consumption stops then so does GDP growth... the fight for who gets those barrels only becomes more difficult when those emerging countries get richer...
Thats what it will come down to one day when demand will outstrip supply and we will fight for barrels by signalling prices.... The current situation churning away and then a shock to finish it off is where we are heading......
the longer this goes on, then the smaller the shock required...
...
...
SC

[Mick100]

Yes, in 1979 when iran and iraq went to war and ceased exporting oil, saudi arabia ramped up production from 3m bpd to 8m bpd - ie, there was plenty of spare capacity - that's no longer the case.
.

[Dr_Who]

OMFG!

Crude brent hit a record 87.71 this morning!!! Time to buy a scooter, but then my energy stocks will cover the petrol cost for my cars.... LOL

[Seti]

Why would you or anyone else need to pay $4 a litre if you had no job to go to or couldn't afford basic foodstuffs. That is the bigger picture of $150bl oil prices - 1930's style global depression. Then the price of crude will tumble so you can afford to use it in lanterns to spin yarn by at night while waiting for the hunter-gatherers to return with the evening meal.

[digger]

facts: oil shale provides .0001 of World Energy
:Oil shale contains 1/10 the energy of Oil
:Oil shale contains 1/6 the energy of coal
:$500m electricity expense per year to produce 100,000 barrels of oil shale per day....
:60% of worlds oil shale in Colorado and Utah...
Oil shale is capital intensive, inefficient, messy, a big polluter, consumes a massive amount of energy to produce....( 3 barrels of water for every barrel of oil)...
Shells scientists have concluded that "blasting, digging, hauling, roasting, disposing, and revegetating millions of ton of shale ore would never be economically viable or environmentally acceptable


That was a great report SC. However you could have summed it up very quickly on the fact that ROEI is negative and no-one knows how to bring it into positive territory
I find it somewhat a puzzel how people go on about all this oil and it will never run out. If in fact they changed there thinking away from oil in the ground to net oil flows to the pump ,they would quickly see the problem. Oil shale from my readings have a ROEI even worse than corn ethanol,which is just a subsidy game and is adding nothing to the energy net gain.

[shasta]

Just out for the Oil bulls...all good for NZO

Oil surges to record US$88 a barrel
New 7:30AM Wednesday October 17, 2007

Oil thundered to a record above US$88 a barrel this morning (NZT), extending a nine-dollar rally since last week driven by tight supplies, strong demand and growing tensions in northern Iraq.

Oil is closing in on the inflation-adjusted high of US$90.46 seen in 1980, the year after the Iranian revolution and at the start of the Iran-Iraq war. Prices this year have averaged US$67 a barrel.

At 1555 GMT, US crude was up US$1.92 at US$88.05 a barrel. London Brent was up US$1.60 at US$84.35 a barrel. Oil has set a series of records over the past three days.

The Organisation of the Petroleum Exporting Countries said it was worried by the record run but said it was due to rampant speculation by big money investors, not any physical shortage of crude supply.

"While the Organisation does not favor oil prices at this level, it strongly believes that fundamentals are not supporting current high prices and that the market is very well supplied," it said in a statement.

Investors themselves have cited rising tensions between Turkey and Kurdish separatists in northern Iraq, sturdy world energy demand growth, tight inventories in consumer nations heading into winter and unprecedented weakness in the US dollar.

"There's a lot of risk there and that is being reflected in the price," said fund manager David Dugdale of MFC Global Investment Management.


"This market has it all right now," said Peter Beutel, president of energy trading consultant Cameron Hanover. "It has supply concerns, projected increases in demand, dollar weakness, momentum and political fears."

The Turkish cabinet asked parliament Monday for permission to launch an attack on the separatists.

Iraqi oil exports via Turkey have been sporadic since 2003, although Turkey is also now a major conduit for Caspian oil exports to the Mediterranean.


But some analysts leaned toward Opec's view and argued the easing of a global credit crunch was a bigger factor driving oil.

Moves by the US Federal Reserve to cut interest rates and add billions of dollars of temporary reserves to the banking system have added liquidity that is finding its way into oil, seen by some as a one-way bet.

"We suspect massive long-side commitment by sidelined money has had more to do with it," said Edward Meir of MF Global.

Oil has climbed from below US$70 in mid-August and surged 10 per cent since Oct. 9. The rally has also been aided by fund buying as a hedge against a weaker dollar. Gold hit a 28-year high and platinum breached record levels.

"The market fundamentals are in balance. There is too much money coming into the market," Indonesia's Opec governor Maizar Rahman told Reuters.

Opec officials said they had heard no discussion within the organisation about raising output beyond the 500,000 barrels per day agreed in September, which takes effect on Nov. 1.

Oil prices have more than quadrupled since 2002 and climbed 43 per cent since the start of 2007.

"Barring a massive sell-off, the path of least resistance seems to be higher still, although like many others out there, we are hard-pressed to justify such high valuations," MF Global's Meir said.

"Still, we learned long -- and many dollars -- ago that it is best not to take on a speeding freight train."
- REUTERS

[Sehnsucht888]

Big article in the Dominion post this morning. Refering to David Salisbury plugging the company with brokers etc over the last couple weeks- and a lot more..

[Nitaa]

although i am heavily weighted in oil stocks.. i have been for the last 5 years. I am expecting a signicant correction (around the 25&#37; mark in oil prices when the correction occurs) by years end. This will of course still make the oil price relatively high. Like most corrections its only short lived. That is when we will see a huge spike imo over the next couple of years then the almighty crash..

im not trying to be pesimistic but history always repeats itself no matter what the commodity. Oil will be no exception.

Back to NZO. Short term the rise in oil is reaping in about $US1.0m ($NZ1.35m) every 2 days in revenue at current levels. No wonder NZO can afford 25 geek geo scientists onto their pay register. The numbers to come out in the next quarter will make interesting reading.

NZO is going from dog to darling this year. macdunk..where art thou.. this is your calling and its ok to change your mind

[Dr_Who]

It has broken through the resistence price of $80 and heading north. Maybe someone can post up a better graph that goes back 5-10 years?

http://futures.tradingcharts.com/charts/BCW.GIF

[Mr Tommy]

NZOG on the hunt for funds and offshore oil fields
By NICK SMITH - Independent Financial Review | Wednesday, 17 October 2007


New Zealand Oil and Gas is seeking more oil assets and is prepared to look offshore.

With a new chief executive and oil revenues beginning to flow, the company has set itself the ambitious target of nearly doubling next year's production of more than 1.1 million equivalent barrels of oil in just four years.

"We're going to have to look at asset and corporate acquisition," says David Salisbury, a 40-year-old Taranaki native raised in the 1970s when Bill Birch's Think Big scheme pumped millions into provincial New Zealand's economy.

Salisbury, six months into the job and having seen subsidiary Pike River Coal successfully floated, says growth will come solely from NZOG's core business exploration, development and production of oil and gas.

Existing sources will peak around 1.3 million of barrels of oil equivalent in 2010, tailing off to just over 1 million in 2012 and 750,000 in 2015.

NZOG is confident of exploiting its existing Taranaki prospects but even so, for the equivalent of two million barrels by 2012, it will need to go to the market for funding to buy.

"The exploration we're looking at is New Zealand focused at this stage. We're going to have a very strong go at growing and we want it in meaningful tranches."

The high level of inherent risk and investment needed by the industry requires a sustained return.

"That's what makes us look at acquisition."

The company is working on a number of strategies to fund future acquisition. Much depends on the size of the target but Salisbury says it could include further debt, going to the equity market, share placement, issuing equity to another company or even forward selling oil production.

On the government's new energy strategy putting a 10-year ban on state-owned gas or coal-fired power plants, he says there is still a strong domestic need for gas and "any gas we find will find a home".

"It certainly doesn't put NZOG off from further exploration."

For a company that recorded revenue around $18 million last year "it was a series of one-offs" and whose production only started properly this year, its chief executive is bullish.

Are peak oil prices causing a rush of blood? "It's not a bad rule of thumb to look at a barrel of oil as being worth about $100," is his riposte, noting many expect the price of oil to top US$100 a barrel this year.

It costs hundreds of millions of dollars to develop a site but at those prices ``we expect the fields to be profitable for up to 10 years".

"This year we've already sold around 300,000 barrels of oil." By financial year's end it will be just shy of 1.2 million $120 million by Salisbury's rule of thumb.

The company has a record of moving quickly. While the Tui field is based on decades of data, actual oil discovery was recent: "To go from discovery to production in a four-year window is very, very good going."

Tui has transformed the company. "While we're not going to acquire Shell in the next couple of years'' it is suddenly earning significant cash.

How significant? In August, Statistics New Zealand recorded its largest amount of crude exports for one month. August also broke the record for receipts to Australia, our largest trading partner.

"September's presumably going to do the same."

It's not just Tui but Kupe, ``which most people think is only a gas field".

Gas is great but its off-products are more profitable. While Kupe holds 254 petajoules of gas, it will also produce 1.1 million tonnes of LPG and, more importantly, 14.7 million barrels of condensate, a light oil similar to the top-shelf product produced by Tui.

Kupe is on track for production in mid-2009, Salisbury says.

The 30 kilometres of pipeline connecting the well-head to the production station is at Port Marlborough and is ready to be welded and installed. The "jacket" the legs of the platform are in Port Taranaki. The platform top will be finished in Thailand and shipped to New Zealand by the end of the month.

It's Tonka toys times ten: "When you spend $1 billion, you get some pretty pieces of kit."

[upside_umop]

sc,

i think i backed myself up in my posts why oil shale was not yet viable.
refresh:

-oil companies lost billions in the 70's (yes billions in the 70's was a lot of money) when oil price crashed and it became uneconomic again and all their capex was a waste of time - they dont want to do this again until they know poo is sustained.

-your thinking of the old way they tried to extract oil from the shale..ie dig it up, take it to a factory, roast it etc etc..but seem to be mixing it up with the new way in which i was talking about.

like you said, shell has a new way which they're not letting out too much detail.
what they have let out is:

-they done a 'small' test plot scheme and have pumped 1600 barrels a day of some of the sweet crude they know of. no heavy refining. messy? no

-the energy input is 1 unit in and 3.5 units out.

-yes, they have to use ice wall technology, as has been used for years to isolate flows into mines.

-they WOULDNT be using electricity heaters down there, why use gas to convert to electricity then back to heat again? thats very inefficent sc, i think they would just use gas or even the oil from onsite, rememember 3.5 units return for every one unit used. its almost a perpetual motion device!

the only thing i have read is that shell isnt sure their heaters are reusable, which could be expensive...they didnt give figures though.

there is 1 million barrels per acre, 1 billion per square mile. 2000 square miles of this land. 2 trillion barrels. it will happen one day, but your right, wont happen tommorow.

[upside_umop]

http://www.dailyreckoning.com/rpt/OilShale.html

here is a similar article, its very similar to one i've read at canti.

digger, negative ROE? there is always a price in which its commercial, and that price is said to be $30 a barrel. would they be getting a negative ROE now? no, they're just scared of the price risk thats all.

[Nitaa]

u u. if they are scared of oil going below $30 in the forseeable future then i suspect they are in the wrong game. I would suspect it is significantly higher than that.

[upside_umop]

i tend to agree nita, but they are the experts and they want certainty.
it went as low at $50 this year didnt it? thats volatile prices, and gives them no certainty.
we will need to see prices sustained at this price for a while longer yet before we see commercial quantities of that sweet shale oil come from the ground.

[bermuda]

Nita,
I am pleased you are long on oil. But please dont refer to oil as a commodity.

It is a precious resource.

I have studied the Oil Sands for years and the more I read the more problems surface.Even with present planned expansion they will be lucky to increase their production by more than 3 mbpd in the next 5 years.

As I have said before China has spent the last 5 or so years gearing themselves up to be in a position to 'fuel ' their economy by negotiating contracts with many Opec countries including options to take delivery at prices up to $US200 a barrel.

Take a look at Matt Simmons latest presentation and you will realise that the infrastructure behind pumping this most precious resource is sadly crumbling.As long as China and India keep growing then I cant see the oil price coming down much, but rather it will continue to climb.

[sideline]

just trying a picture - WTI futures Nov 07

[Dr_Who]

What a beautiful graph!! If only NZO graph can track the oil price graph.

[Seti]

NZ Oil & Gas chief spreads good news about production

By BRUCE MCKAY - The Dominion Post | Wednesday, 17 October 2007


http://inl-images.adbureau.net/inl/accipiter/images/AE0.gif (http://inl.adbureau.net/accipiter/adclick/CID=fffffffcfffffffcfffffffc/aamsz=300x600/POS=STORYMIDDLECOLUMN/acc_random=28177469687/pageid=28177469687/site=s/area=s.stuff.business.opinion)

During the past couple of weeks David Salisbury, chief executive of NZ Oil & Gas, has been doing the rounds of the brokers and journalists doing what CEOs do not do often enough; meeting those people face to face and answering their questions.


Mr Salisbury joined NZ Oil & Gas earlier this year when the company was going through something of a quiet revolution.
As an exploration company, the prospects for revenue have often seemed somewhat distant, but now the company is enjoying its first real revenue in quite some time.
Also, NZ Oil & Gas has managed to get the Pike River IPO away after a few bumpy moments. Given the state of financial markets since August, it is an achievement to have raised $85 million from the public for a coal company.
But what's next?
Mr Salisbury's message is that the company is hunting for the next big thing, having boosted its exploration staff, and is ready to tackle some new offshore targets with all the cash flow coming in from, firstly, the Tui project and then from Kupe.
Though the company's share of these two projects is only 12.5 per cent and 15 per cent respectively, they are significant investments and profit generators.
The nature of the reserves means that Tui will flow strongly in the first couple of years and then rapidly reduce to a long tail, while Kupe, which is due to start production in the middle of 2009, will have a longer, more stable profile.
The company is planning to produce about two million barrels of oil equivalent on a continuing basis from both Tui and Kupe and from new discoveries. That's where the new staff come in.
One of the near-term opportunities for the company is drilling new wells in prospects that are near both the Tui and Kupe platforms.
The idea is that any new fields can be hooked into the existing production facilities, making the new fields relatively cheap to develop and prolonging the useful lives of the existing production assets.
There is also the possibility that the recoverable reserves estimates will increase from new drilling and testing in the existing fields.
The focus remains on offshore Taranaki assets rather than looking for new targets in areas such as the Southern Ocean.
NZ Oil & Gas knows the Taranaki structures very well and will continue to work in that area. It seems that the Taranaki basin is still highly prospective, even if a big replacement for Maui hasn't been found yet.
Mr Salisbury reckons that the company is in a good cash flow position, with no need to ask the bank or shareholders for money, at least in the foreseeable future.
The very nature of oil and gas exploration means that shareholders always risk being tapped on the shoulder for more money.
NZ Oil & Gas has a commitment to provide funding to Pike River. However, it would seem that if the company has to lend money to Pike River, it will do so only on commercially advantageous terms.
Mr Salisbury has been at pains to point out that the two companies are now separate entities in every sense, with the only contact between them at the board level.
It would also seem that NZ Oil & Gas will look to exit its holding in Pike River, but that is unlikely to happen for some time.
Pike River isn't due to start producing coal till March next year and any sale would probably happen only after Pike has established a production track record.
So will the company pay a dividend? It would seem unlikely.
Firstly, the company has $139 million of exploration and other tax losses that it can use, so it won't be generating any imputation credits in the foreseeable future.
It doesn't make sense for companies to pay dividends without imputation credits, so the most likely form of any payment to shareholders is likely to come from share buybacks.
Whether a share buyback programme is instigated remains to be seen as the only time a company should undertake a buyback is when the share price is trading at a deep discount to fair value.
In the oil and gas game it's a bit of a moot point to determine fair value, due to the volatility of the oil price.
NZ Oil & Gas has been in the NZX 50 Index for some time now, but is not that widely followed by analysts.
The company has more than 12,000 shareholders, but less than 20 per cent of the shares are held by institutional investors.
Given the "wall of money" hitting the market each week it seems surprising that the level of fund manager investment in the company is so low, given that it is in the headline index.
It could be that institutional investors have a hard time understanding the company.
There aren't many oil and gas analysts in New Zealand and the Australian analysts aren't about to divert their attention from much bigger companies in their own market to look at NZ Oil & Gas.
Another reason could be the need for the company to improve its corporate governance performance before institutional shareholders start taking more interest.
One of the issues here is the presence of Tony Radford as chairman of the company. He has been a key driver behind the company since it first listed in 1981.
However, at times the governance of the company has been somewhat opaque.
During the 1990s, Ron Brierley and GPG had a crack at Mr Radford and the cross shareholdings between related parties that were linked to NZ Oil & Gas.
While that has all gone away, it might be time for the company to look for a new chairman that has a good market profile and a sound corporate governance track record.
NZ Oil & Gas has certainly had a big year. The start of production from Kupe next year will be another major step forward and will provide ongoing cash flows and profits for the next few years. Mr Salisbury's challenge is to find the next Tui and Kupe to ensure that the company can produce two million barrels a year. If he can do that, then one day the company may start paying tax and dividends will start to flow. That will be a major achievement.

[Dr_Who]

Very good post. Thanks Seti.

If they change the chairman that the market likes this stock can add on 20-30% and I would probably look to add more NZO to my portolio. I am liking what the CEO is saying. Good, clear direction that is positive. Good to hear there will be no further capital raising in the near future.

[tim23]

Nice to see some momentum is share price, hope stays till AGM - many of you going? I am -1st time its been in Wellington for ages and its at the citys best hotel!

[boysy]

well the sp is certainly moving up 3 to $1.10