NZ Oil & Gas (NZO)

[JBmurc]

New Zealand Oil & Gas Ltd has exploration acreage in New Zealand’s only hydrocarbon-producing region, the Taranaki Basin, and is actively looking for other opportunities in Taranaki, elsewhere in New Zealand and overseas......................

[Sehnsucht888]

An updated top 20 shareholder list on the website, with the treasury stock position removed. Since the list posted by "someone" last week I think it was with posityions as at 11th July, of the current top 20 holders 6 have not changed their holding, 3 have decreased (total -110,287), the other 11 have increased their positions (total + 3,202,426).

So the big holders, (even if many are nominees) aren't selling at these prices, they are accumulating..

[dsurf]

given the stated policy - "A reasonable amount of profit after funding: operating costs, exploration, development etc will be paid as a dividend". I expect a 5 or 6c interim coming up & am looking forward to it.

I know many posters have theoretical problems with the ensuing lack of re-investment, but I think a dividend would:

1/ raise the share price and
2/ make scrip bids cheaper
3/ and encourage more investors to buy NZO creating sustained buying at which point we return to point 1/ above and this virtuous cycle continues until $2 is properly tested.

[upside_umop]

great, back to the dividend talk again!

all will be revealed in the up and coming...

[Casa del Energia]

given the stated policy - "A reasonable amount of profit after funding: operating costs, exploration, development etc will be paid as a dividend". I expect a 5 or 6c interim coming up & am looking forward to it.

I know many posters have theoretical problems with the ensuing lack of re-investment, but I think a dividend would:

1/ raise the share price and
2/ make scrip bids cheaper
3/ and encourage more investors to buy NZO creating sustained buying at which point we return to point 1/ above and this virtuous cycle continues until $2 is properly tested.

My stake in the ground is still 10c div. (Why? - a quick doodle with the abacus says 23c NPAT (incl royalites) if taking Tui as stand alone. So going on the assumption of a conservative div cover … 10c seems good).
Ok - it's whacky accounting but it's a nice thought.

[zacman]

I dont believe that NOG will be looking too keenly at PPP ... although I stand to be corrected. NOG considers themselves to be an exploration company first,then development and lastly as a producer.

There is little opportunity to add value to PPP through NOGs inbuilt expertise. Same probably applies to TAP.

I believe they will be looking for fresh exploration then development firstly in Taranaki where they have the greatest knowledge and then slowly further afield.

zacman

[Dr_Who]

JB, I know what you mean but let's keep things simple. Too many companies go and get horribly confused. This is the strength of NZO in Taranaki. The addition of PPP maximizes it .

They have so much experience here. Stay where you know what's going on.

I agree. NZO should to stick areas and drills the are familiar with and have a competitive advantage. Dont need to go wondering into the unknown and get lost.

[zorba]

Go the Price of Oil .......

GO NZO !!!!

http://futures.tradingcharts.com/intraday/CL_/98

[Corporate]

I dont believe that NOG will be looking too keenly at PPP ... although I stand to be corrected. NOG considers themselves to be an exploration company first,then development and lastly as a producer.

There is little opportunity to add value to PPP through NOGs inbuilt expertise. Same probably applies to TAP.

I believe they will be looking for fresh exploration then development firstly in Taranaki where they have the greatest knowledge and then slowly further afield.

zacman

With PPP you are obviously buying an undervalued producer. NZO know Tui, payback period would be low, the investment would eventually build more cash for more future drills.

Baby steps are required

[Nitaa]

With PPP you are obviously buying an undervalued producer. NZO know Tui, payback period would be low, the investment would eventually build more cash for more future drills.

Baby steps are requiredI still think PPP is a dead duck for a takeover by NZO (although i hold both). Simple reasons are, nzo sold ppp last year perhaps mainly for required cash. Secondly AT will have a very good idea of the true value of PPP and since he holds a sizable chunk he is not going to let it go at a discount unless there was other incentives for him.

Perhaps most importantly even if NZO were interested in PPP, at what price do you think they can secure it for?

Possibly the best assets could be in the permits.

[tim23]

I still think PPP is a dead duck for a takeover by NZO (although i hold both). Simple reasons are, nzo sold ppp last year perhaps mainly for required cash. Secondly AT will have a very good idea of the true value of PPP and since he holds a sizable chunk he is not going to let it go at a discount unless there was other incentives for him.

Nita - Your first reason is no longer valid is it because they needed cash then now they have cash!

[Nitaa]

I still think PPP is a dead duck for a takeover by NZO (although i hold both). Simple reasons are, nzo sold ppp last year perhaps mainly for required cash. Secondly AT will have a very good idea of the true value of PPP and since he holds a sizable chunk he is not going to let it go at a discount unless there was other incentives for him.

Nita - Your first reason is no longer valid is it because they needed cash then now they have cash!It would defy logic to sell something you intend to try and buy back especially at a price much more than what you sold it for. I am sure there were other alternatives.. eg get one of the Indian co's to loan money to Pike rather than NZO's last year or other financing arrangements.

On another note I am curious to know what NZO's intention on Pike. Do they wish to sell their stake over the next 12 months or so? Or are they now comfortable and are willing to accept a good size chunk and get long term revenue from it? My orginal thoughts were that NZO were going to sell Pike

[digger]

3. China after the Olympics
The numbers are now in, and China’s increase in oil product consumption during the first half of 2008 is truly impressive – “apparent consumption” of gasoline was up 16.2 percent, diesel up 14.7 percent and kerosene up 6.6 percent. While some of this increase is related to last winter’s blizzards, the earthquake, and preparations for the Olympics, a lot came from plain old economic growth which was 10.4 percent in the first half.

Currently China is faced with a power shortage partly due to the temporary closing of power plants in the vicinity of Beijing in an attempt to clean-up the air for the Olympics. Most Chinese authorities say the heart of the problem is the inability of China’s railroad system to move enough coal to the rapidly increasing numbers of power plants scattered across the country. Coal stockpiles have decreased by eight percent in recent weeks and two or three percent of China’s thermal power plants are reported to have closed.

To guarantee adequate electricity supplies while attempting to clean up the air during the Olympics, Beijing ordered a number of major industries, most notably aluminum production, to cut back on consumption prior to the games. Despite the shortages, China’s power generation increased 8.3 percent in June over 2007 and thermal power production increased by 6.8 percent.

Price caps on coal and electric power are complicating the situation. While long term coal contracts and retail electricity prices are capped, spot coal prices have doubled recently so that 80 percent of the power companies are sustaining losses.

In another month, the Olympics will be over as will the need for cleaner air and reliable electricity. Power plants around Beijing will resume operation as will the 100s of industrial plants that have been forced to shut down and the 300,000 trucks and 1.5 million cars that have been banned from operating around the capitol.

Increased transportation of coal over the short run seems difficult to achieve as various efforts to increase coal shipments over the past year are likely to have rung the slack out of the transportation system. This suggests that if China is to keep on growing at 10+ percent, there will be a need to import more coal, oil and natural gas. While increases on the order of 15 percent as we saw in the first half of 2008 seem high, continued growth in imports seems likely. Beijing also may seize upon the recent $24 a barrel drop in world oil prices as an opportunity to build its strategic oil reserves.

The rapid run-up in oil prices during the first half of the year and the recent drop may have more to do with Chinese demand in a tight oil market than is generally recognized.
End of article

Well i certainly agree with that last line.Good to see a few others are catching on.In another month i think we will see this retreat in oil was just a short passing phase to get that happy face for the olympics i have mentioned before on several occasions.Dispite China's big effort i still say 120 is the floor.

[Xerof]

They will sell Pike once it's producing a proven 1 mill tons pa and/or after Pike provide an upgrade on extractable volumes, which will certainly occur.....my pick remains late 2009

[tim23]

Agree they will get out of Pike but it will be a free distributions to NOG shareholders.

[Xerof]

10 cent fully imputed divvie plus a fistful of PRC shares - sounds Ok to me

:D:D

[zorba]

Tim,

I like the idea of a distribution of PRC shares -- I would support that !!

Precedent was set with the main slug of PPP shares that NZOG used to own (they had 57% of PPP). Most of the PPP shares distributed to NZOG sharholders some years ago.

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

Just noticed that NZ$ exchange rate has dropped by up to 0.5 % against major currencies.

Could be under US$ 0.74 in the next few days ?

And oil price is looking like it has support around US$ 124 - 125 / barrel.

Z

[the machine]

Agree they will get out of Pike but it will be a free distributions to NOG shareholders.


doubt if nzo would give free prc shares to nzo holders as giving away the premium they have with 31% holding.

M

[bbob]

Some speculation.

NZ economy slows/tanks. RB drops interest rates. Banks may or may not follow suit dep on international risk factored into their offshore borrowing costs, but suspect over time they will, leading to a relatively gradual but persistent drop in the exchange rate over the next few years to US 60c. Hard to know what oil prices will do but exchange depreciation helping NZO significantly whatever. NZO one of the few brighter lights on the NZ stock exchange but dragged back from full realization of underlying share value by the prevailing negative overall local market sentiment. Heavy local shareholder weighting in NZO under pressure from local poor conditions leading to gradual increase in foreign investment and probable takeover by a foreign oiler at a discounted price.

Hope I'm wrong. Shareholder since circa 2000 and don't want this NZ company doing well to go to offshore interests.

[Sehnsucht888]

TUI Production Performance:

30 July 2008: Tui has now been in production for one year. Since production began on 30 July 2007, total Tui production amounts to more than 15.2 million barrels.

In the original projections, total production was not expected to reach 15 mmbbls until mid-2009.

--
So looking forward to the quarterly, and annual reports coming out..

I too would be quite keen on another div. 5c, 10c something like that.
There are those that say its daft to give back some of the money they just raised, but they didn't know they would have so much when they issued the options.
384 odd million shares out there.
10c div would cost 38.4 million - a lot,
but based on their income:
NZOG's share of production approx 1.78 million barrels at, say NZ$100 per barrel, gives about $90 million more than expected
The have the money they wanted, $193 million from the options, an extra $50 million from TUI revenue, and that gives a sizeable chunk they could give back to the investors.

[Sehnsucht888]

----------------
ABN Amro said it had assessed profit risk to be on the downside for seven companies - Fletcher Building, Freightways, Pumpkin Patch, Briscoe Group, Ebos Group, Just Water International and Tenon.

Balancing this, the broker predicted earnings from seven other companies - Nuplex, ING Medical Properties Trust, Steel & Tube, AMP NZ Office Trust, Mainfreight, New Zealand Oil & Gas and New Zealand Windfarms - could surprise on the upside.

Another ABN Amro analyst, Dennis Lee, said the slowing domestic residential market combined with the disappointing performance of international benchtop group Formica would have a "negative impact" on blue chip Fletcher Building's results. The consensus of analysts' expectations is for Fletcher to post annual net profit of between $398 million and $476 million.

There are, however, some bright spots: New Zealand Oil & Gas is expected to announced strong full year results, boosted by higher production in its Tui oil fields and record oil prices.
----------------
http://www.nzx.com/news/markets/4635755
----------------
-- no kidding..

[fish]

I didnt expect Tui to be still producing in these conditions but the latest announcement says it hasnt lost a day-

However, since the de-bottlenecking of the Umuroa late last year, subsequent monthly production has been about 40,000bpd or more.

This production had been achieved despite various technical challenges and some very rough weather and sea conditions at the Tui field about 50km off the Taranaki coast.

Last week saw the worst conditions yet encountered, with sea swells of up to 14.2m recorded at a nearby wave buoy.

Despite such conditions, the field and the Umuroa floating processing, storage and offtake vessel have continued to produce every day.

The FPSO’s liquid handling capacity is being increased, from 120,000 to 150,000bpd, and should be completed in time for the tie-in of the new Tui-4H production well, anticipated to be drilled in early 2010.

Tui crude is typically sold against the Tapis benchmark and so far 50 tankers have visited the field.

Tui oil is sold into the east coast of Australia or southeast Asia and, for the first time last week, to Hawaii.

The Tui partners are operator AWE (42.5%), Mitsui E&P NZ (35%), NZOG (12.5%) and Pan Pacific Petroleum (10%).

[Paddie]

[QUOTE=Sehnsucht888;215677]TUI Production Performance:



I too would be quite keen on another div. 5c, 10c something like that.


I am sure that most holders would be keen to get a dividend.

I am not so sure that we will?

Paddie

[tim23]

Paddie - the dividend for 07/08 has been paid, fullstop!

[fish]

[QUOTE=Paddie;215713][QUOTE=Sehnsucht888;215677]TUI Production Performance:



I too would be quite keen on another div. 5c, 10c something like that.


With the nz dollar crashing down-now 73.4- income from Tui should remain high even with the falling oil price . Not the best time to buy an overseas oil interest however .

The best move in the interest of shareholder wealth would be a dividend and I would agree with your 5 to 10c .

[Paddie]

Paddie - the dividend for 07/08 has been paid, fullstop!


Tim,

I was responding to Sehnsucht88's call for a dividend.

As posted, I would be surprised if we get one.

Paddie

[fish]

Paddie - the dividend for 07/08 has been paid, fullstop!

Tim,
Where did you get this information from?
I suspect the market is not expecting a final or special dividend but I certainly am.
The information I obtained from the nzo website dated 13 th march 2008 states -
"The Board of NZOG resolved to pay a
fully imputed dividend for the 2007/08
financial year of 5.0c per ordinary share."
I am not a lawyer but to me this does not exclude another dividend-be it called final or special
Elsewhere they state a reasonable proportion of profits will be payed out as dividends . Now in march they were not aware of the final quarterly result-so how could nzo make a final decision -in actually fact I expect it to be much more than even a bigger optimist than me could have predicted at that time !.
The rights issue has given nzo a vast amount of cash to use to expand reserves and production . In these circumstances I would expect a good final or special dividend to reflect the unexpectedly higher profits .
If we have no news of future dividends tomorrow then I would have to conclude the current directors are confusing the shareholders and possibly not acting in the best interests of the shareholders .

[777]

Any dividend, if declared, could simply be an interim dividend for 2008/2009 year.

I give it a 90% chance a dividend will be declared. We have a company producing profits here so shareholders should get some return on their investment. The cash issue is for further expansion and separate from this issue.

[friedegg]

doesnt te thing that comes out tomorrow only have the cash situation and the previous 3 months goings on?and doesnt include future announcements?

[tim23]

Egg - as I recall the company paid the 5c as a interim but final for 07/08 I'd love there to be another but there is no evidence to suggest that would be the case and the company I thought was at pains to point that out.

[fish]

doesnt te thing that comes out tomorrow only have the cash situation and the previous 3 months goings on?and doesnt include future announcements?
Look at the quarterly activities report for March-this has the dividend announced on 1st page !

http://www.nzog.com/companyreports

[friedegg]

good youve answered the troubling thing in my mind

[fish]

Egg - as I recall the company paid the 5c as a interim but final for 07/08 I'd love there to be another but there is no evidence to suggest that would be the case and the company I thought was at pains to point that out.

Sorry Tim -I must have missed this -but please could you show me where this is stated

[Snow Leopard]

Look at the quarterly activities report for March-this has the dividend announced on 1st page !

http://www.nzog.com/companyreports
The last dividend was announced with the half yearly results on Feb 27th. It was not in the Half year Quarterly (i.e. 2nd Quarterly) at the end of Jan.

Sheesh, some people :p

[digger]

My 2 cents worth on the dividend question is that NZO is finanically very capable of paying a out a similiar sum as last time given the success of TUI but my thinking is that that will not be the case just yet .It sort of does not look too good to be taking money from shareholders and in a too short of space givening some of it back. So i will still plug for the next div to be announce at or just before the AGM.The last time the div hit the rounds i said in OCT. The AGM is less that 3 months away now and by then the full year report will be out usually end of sept approx,hence i pick second div in octomber.
If Fish is correct and i wrong i then i will have to replan my life to spend up sooner than expected.Hard call.

[tim23]

I maintain there will be no dividend until this time next year.

[fish]

.
OMG ..... oil cracks US$102 a barrel ..... !!!!

What a curve !!!!

http://futures.tradingcharts.com/intraday/CL_/48

Had to laugh at this-was researching what was actually said about the last dividend-at the time the directors made this decision oil had just reached a $102 a barrel-and we all thought it was incredible .

[tim23]

Dividend
The Board of NZOG has resolved to pay a fully imputed dividend for the
2007/08 financial year of 5.0c per ordinary share. This recognises an
outstanding period and provides shareholders with an immediate share of that
success.

The Board has determined a dividend policy that in future a reasonable
proportion of profit will be distributed by way of an annual dividend.


To me that looks like the only dividend, I could be wrong though.

[bermuda]

Had to laugh at this-was researching what was actually said about the last dividend-at the time the directors made this decision oil had just reached a $102 a barrel-and we all thought it was incredible .

Good point Fish,
I remember suggesting a dividend would help NZO get the options exercised and at the time I think I made the suggestion that all net revenues over $90..could have been $100...should be returned to shareholders by way of dividend.

Not a bad idea and would certainly rocket the shareprice if you knew that all net revenue over $100 was paid out in dividends.

Cant see oil going below $100..the Saudi's are looking forward to resting their oil fields.They are pumping more water into them than the oil they are getting out.And at an increasing level.

[fish]

Dividend
The Board of NZOG has resolved to pay a fully imputed dividend for the
2007/08 financial year of 5.0c per ordinary share. This recognises an
outstanding period and provides shareholders with an immediate share of that
success.

The Board has determined a dividend policy that in future a reasonable
proportion of profit will be distributed by way of an annual dividend.


To me that looks like the only dividend, I could be wrong though.
Thanks Tim ,
You are probably right -I think most people would interpret it the way you have and certainly the market doesnt seem to have anticipated a dividend tomorrow .
A number of posters seem to think like me-the dividend policy isnt clear and doesnt exclude a special or final dividend being announced tomorrow .

[tim23]

You lot have got my curious though!

[bermuda]

Had to laugh at this-was researching what was actually said about the last dividend-at the time the directors made this decision oil had just reached a $102 a barrel-and we all thought it was incredible .

Good point Fish,
I remember suggesting a dividend would help NZO get the options exercised and at the time I think I made the suggestion that all net revenues over $90..could have been $100...should be returned to shareholders by way of dividend.

Not a bad idea and would certainly rocket the shareprice if you knew that all net revenue over $100 was paid out in dividends.

Cant see oil going below $100..the Saudi's are looking forward to resting their oil fields.They are pumping more water into them than the oil they are getting out.And at an increasing level.

[Sehnsucht888]

digger - your reasons against a div are as I have seen by McDunk, and expected to see already too (if memory serves). I see that point, but was trying to emphasise that the capitial raising was started when they expected much less in the bank now. Given the huge success to date, and bulging coffers, a not unreasonable prospect is to pass some back.

Tim23 - I disagree, and think there will be something earlier. NZO had said a while ago there was no dividend anticipated, but then TUI exceeded projections early, and so they did one. (not saying they didn't want too, but I think they implied it was a fair way off). If telecom, and the others can pay dividends, with a decreasing share price, and surely decreasing profits, then NZO with stacks of money coming in must surely be able to. The last div was was not a final one from my reading of it - could a special div for the jun 08 year have any tax advantages vs one later this year?
Tomorrow will be a good day, irrespective of news on a dividend. I agree unlikely to hear about one tomorrow, but will be impressive results nonetheless.

[upside_umop]

Again, the sharechat interview with DS shows him clearly stating it was the final dividend for the financial year, as well as the what tim showed. Been talked over quite a few times...

http://www.sharechat.co.nz/features/iinterviews/article.php/7573c2ee

The only way I can see a dividend, would be by way of a special dividend. This would be interpreted as a non-reoccuring distribution.

Dividends are funny, as they give a signal of future intentions of a company...companies dont like to have to reduce their dividend as shareholders can get upset and when shareholders get upset, management can come under scrutiny.

A share buyback would probably be best if the shareprice gets below $1.50. The company will know a few people are leveraged, and by an open market share purchase, it would underpin the shareprice stopping margin calls etc.

[kanejones]

Will the SP move much on tomorrow's report? May seem a dumb question, but I'm still learning.

[Nitaa]

For my 2 bob worth.

No special dividend as per diggers comments. ie. too close to option conversion.

nzo intention will be a steady dividend(yearly with revenues from tui and then from kupe to keep coming over the next 20 years. Not sure if they will keep Pike for too long.

nzo showing attitude towards growth through aquisition/'s therefore need to retain substantial cash.

wiping off treasury stock indicates to me they intend to buy back shares aty some stage.

Cash will still be required for future exploration.

not to forget some cash required for some decent sized sausage rolls this year. i dont want dm pulling out his hanky half way though the agm again

[upside_umop]

No special dividend as per diggers comments. ie. too close to option conversion.


I wasnt suggesting it would have anything to do with the options. More of a 'tui is performing great, thanks for holding with us...' again kind of special (interpreted as one-off). But i do think its unlikely, and best to see what they say in annual report.

This WARCHEST (i say in capitals..as its a serious threat to quite a few listed oilers about) is going to make it an exciting few months following NZO...as long as they dont over pay for what they're after.

Again, things could be aligning well for NZO, as oil comes down and sentiment changes (although $100 oil is nothing to be negative about)..

[the machine]

I didnt expect Tui to be still producing in these conditions but the latest announcement says it hasnt lost a day-

However, since the de-bottlenecking of the Umuroa late last year, subsequent monthly production has been about 40,000bpd or more.

This production had been achieved despite various technical challenges and some very rough weather and sea conditions at the Tui field about 50km off the Taranaki coast.

Last week saw the worst conditions yet encountered, with sea swells of up to 14.2m recorded at a nearby wave buoy.

Despite such conditions, the field and the Umuroa floating processing, storage and offtake vessel have continued to produce every day.

The FPSO’s liquid handling capacity is being increased, from 120,000 to 150,000bpd, and should be completed in time for the tie-in of the new Tui-4H production well, anticipated to be drilled in early 2010.

Tui crude is typically sold against the Tapis benchmark and so far 50 tankers have visited the field.

Tui oil is sold into the east coast of Australia or southeast Asia and, for the first time last week, to Hawaii.

The Tui partners are operator AWE (42.5%), Mitsui E&P NZ (35%), NZOG (12.5%) and Pan Pacific Petroleum (10%).



think you will find that 12 months ago before production commenced, the swell was about 18m from the same storm that grounded the pasher bulker in newcastle.

M

[Drone]

WTI back up to 126.70 (up 4% today), Tapis to follow suit, kiwi getting beaten up at 73.40ish. Quarterly report to show extremely strong cash flows. Should be the first strong up day for the stock in a while , am going to stick my neck out and say 5c plus.

Disc: long NZO

[Bilo]

WTI back up to 126.70 (up 4% today), Tapis to follow suit, kiwi getting beaten up at 73.40ish. Quarterly report to show extremely strong cash flows. Should be the first strong up day for the stock in a while , am going to stick my neck out and say 5c plus.

Disc: long NZO

The most important aspect of this $4 rise is that the $120 support level held confirming strong resistance to going lower than $120. I doubt if anyone is expecting it to stay at $127 for long...

[Bilo]

The most important aspect of this $4 rise is that the $120 support level held confirming strong resistance to going lower than $120. I doubt if anyone is expecting it to stay at $127 for long...

And this as well from CNN:

$149 a barrel?: A report by Goldman Sachs predicting prices could reach new heights was also feeding the rally.

The falling demand for crude, which had driven down prices more than $25 a barrel over the past two weeks, was only temporary, a Goldman analyst wrote in a report released Wednesday. The report went on to predict that prices would jump back up again to hit $149 a barrel by the end of the year.

"Basically Goldman Sachs hit right at the heart of why the market was going down," said Phil Flynn, senior market analyst at Alaron Trading in Chicago.

US demand was recorded as having fallen 2pc. Of 20 million barrels per day or 400,000 barrels.

[Sehnsucht888]

TV One business news this morning mentioned that the rise was partly due to an unexpected shortage I thin kit was..

[Anubis]

Crude oil inventories in the US did not fall as much as analysts had predicted. They were down 100,000 barrels versus a consensus prediction of a 1.6m barrel fall. These figures failed to provide evidence for accelerating demand destruction in the US.

[blockhead]

Buyer @ $1.58, very keen or had a wee peek at the quarterly ???

[Chalice]

Crude oil inventories in the US did not fall as much as analysts had predicted. They were down 100,000 barrels versus a consensus prediction of a 1.6m barrel fall. These figures failed to provide evidence for accelerating demand destruction in the US.

"The Energy Information Administration says that U.S. gasoline supplies fell by 3.5 million barrels last week. Analysts surveyed by energy research firm Platts expected gas supplies to increase by 400,000 barrels."

This may be an indication that demand may be a bit more robust than expected...
Looking good for a decent rise today.

[Grand Uber]

Buyer @ $1.58, very keen or had a wee peek at the quarterly ???

Yeah but look at the volume, nothing substantial, i would assume that there will be a few paying a little more with the expectation of a rise on release of the report.

But surely anyone who is looking to invest or has already invested in NZO knows what to expect in the report.

Buy on rumour, sell on fact.



but now that ive said that it will probably shoot up to $3

[777]

Remember that the opening quotes get settled at 10 am and at current quotes will all trade at 1.55. By bidding high he is first in the queue.

[QOH]

The result is out

[bk]

but small volume, so I don't expect insider trading - seems that some people are willing to have a small bet at a good report and climbing NZO price.

Oil price is funny - first it goes down because crude inventories are larger than expected, then it goes up because gasoline inventories as lower than expected (could it be that refineries produced less gasoline this week, leaving more crude?)

Anyway, these are just minor fluctuations - the demand destruction in the USA (currently some 4% compared with last year) is more than matched by the increase in demand in China (16% in the last 6 months - and yes, that is of a smaller base, but is in absolute terms larger now).

And once the Olympics (both of them) have passed, and all those trucks and cars are allowed back on the road, and the industries restart, then see the price of oil fly. I do not rule out $200 by the end of the year.

Also note a 40% increase in SUV sales in China - thanks to the subsidies on oil they have not gotten the message yet.

My prediction for NZO by the end of the year (with Pike finally producing) - $2.00

[Toddy]

NZO
31/07/2008
QUARTER

REL: 0945 HRS New Zealand Oil and Gas Limited

QUARTER: NZO: NZOG Reports 12 Month Revenue of NZ$234.6 Million

New Zealand Oil & Gas Ltd (NZOG) is pleased to report that revenue for the
three months to 30 June was $80.9 million, taking revenue for the full
2007/08 financial year to $234.6 million.

NZOG has today released its June Quarterly Activities Report and Cash Flow
Report.

The 12 month revenue figure of $234.6m compares to revenue of $4.2m in the
previous financial year.

The outstanding result is based around the highly successful Tui Area
Oilfields off the Taranaki coast, in which NZOG holds a 12.5% stake.

NZOG's Tui revenue for the year ended 30 June 2008 was $222.8m . There was
also a gain recognised form the successful float of Pike River Coal Ltd and
some other small non-Tui revenue items.

Tui began production almost exactly one year ago, on 30 July 2007. To date it
has produced over 15.2 million barrels of oil. The initial proven and
probable (2P) reserves were upgraded twice during the June Quarter; first to
47 million barrels and then to 50.1 million barrels.

Oil prices hit record levels during the June Quarter. Tui oil is generally
sold against the regional Tapis benchmark crude. Tapis rose from US$110 at
the beginning of April, to US$150 at the end of June. It has since eased back
to US$135. However, that has been somewhat offset by the fall in the NZ
dollar.

Tui's expected production for the 2008/09 financial year has been upgraded
from 6 to 9 million barrels of oil (NZOG's share 1.125 mmbbls), providing
continuing strong revenue and cash flows ahead of commercial production
starting in mid-2009 from the Kupe project.

NZOG completed the largest capital raising on the NZX this year during the
June Quarter, through the exercise of June 2008 options. 91.8% of the options
were converted to shares at $1.50 per option, raising $190.8m. Along with the
Tui revenue, this has contributed to a very substantial cash balance.

Cash in hand at 30 June was $256.5 million. With further option payments
received in July, the current cash balance is approximately $280m.

"NZOG is on a very sound financial footing and we are focused on maximising
value from our existing assets, as well as identifying attractive new
investments", Chief Executive David Salisbury said.

"This includes looking beyond New Zealand, as the opportunities currently
available here are too few to confidently satisfy our growth targets".

In the interim, the cash funds have been invested in short-term banking
facilities with a number of S&P AA or better rated institutions.

"We are not in the business of financial speculation with shareholder funds,"
David Salisbury said.

[Drone]

Rev in quarter $81m!

Looking good for $1.60+ today. Strong buy interest on the open.

[fish]

I think a small dividend-maybe 10 cents= 40 million was affordable .
With many of us having taken big overdrafts to convert the options it would be some help to have a dividend to pay some interest
We need a director who is working in the interests of shareholders-preferably one that has a large shareholding

[Toddy]

I think a small dividend-maybe 10 cents= 40 million was affordable .
With many of us having taken big overdrafts to convert the options it would be some help to have a dividend to pay some interest
We need a director who is working in the interests of shareholders-preferably one that has a large shareholding


Maybe they can now afford to put on more sausage rolls at the agm.

[QOH]

I'd be happy with even a 2 cent dividend. That wouldn't make much of a dent in their funds, they could pay that out of the interest alone they must be earning.

[Corporate]

Well I think the Quarterly looks pretty damn good. What we expected.

The $90m for the quarter means that PPP got about $70m, Nearly half there Market Cap

[trackers]

Wasn't expecting a jump like that on what was fairly common knowledge... Good timing with a bounceback in POO and falling NZ dollar I guess!

Was hoping to see something about a dividend, and more info on what they plan to do with all the cash.

[Chalice]

Wasn't expecting a jump like that on what was fairly common knowledge... Good timing with a bounceback in POO and falling NZ dollar I guess!

Was hoping to see something about a dividend, and more info on what they plan to do with all the cash.

It was an quartely activities report so you can't expect div or investment statements.

[Corporate]

Wasn't expecting a jump like that on what was fairly common knowledge... Good timing with a bounceback in POO and falling NZ dollar I guess!

Was hoping to see something about a dividend, and more info on what they plan to do with all the cash.

Lets hope it holds now

[trackers]

It was an quartely activities report so you can't expect div or investment statements.




"NZOG is on a very sound financial footing and we are focused on maximising
value from our existing assets, as well as identifying attractive new
investments", Chief Executive David Salisbury said.

"This includes looking beyond New Zealand, as the opportunities currently
available here are too few to confidently satisfy our growth targets".

In the interim, the cash funds have been invested in short-term banking
facilities with a number of S&P AA or better rated institutions.

"We are not in the business of financial speculation with shareholder funds,"
David Salisbury said.



Sounds like an investment statement to me (loosely translated to "we have no idea what we're doing with it at this stage"). Not complaining as such, just would have been nice to have had more of an indication of what the plan is, rather than BAU

[Dr_Who]

Wasn't expecting a jump like that on what was fairly common knowledge... Good timing with a bounceback in POO and falling NZ dollar I guess!

Was hoping to see something about a dividend, and more info on what they plan to do with all the cash.

Oil price overnight jumped $4 which help push up NZO sp. :)

[Chalice]

Sounds like an investment statement to me (loosely translated to "we have no idea what we're doing with it at this stage"). Not complaining as such, just would have been nice to have had more of an indication of what the plan is, rather than BAU

That is just a rehash of a previosly stated position (apart from the "were not gambling with your money statement"). Activities reports state what has happened - not what is going to happen.

I think that "we have no idea what we're doing with it at this stage" is too harsh - we have been informed that they have been actively seeking and analysing investment options.

I do agree with you that an outline of where to next would be great, but as that info is undoubtely commercially sensitive I would imagine that either the AGM or an announcement post deal will be the next we hear of NZO's plans going forward.

[kanejones]

Can we also expect a strong report from PPP?

[boysy]

one would like to think so they should release their report at start of trading on the asx

[Mr Tommy]

With 2008 earnings of $234m, and 383m shares, the EPS is now 61c
With Tui production for 2009 year now likely to be 9m barrels its still looking good for next financial year, and then Kupe kicks in for the next financial year.
Plus all the interest being earned from $280m in the bank on top.

[upside_umop]

dont confuse earnings with revenue...grrr

[digger]

dont confuse earnings with revenue...grrr

Good point upside-umop,and i will keep them seperate.
I think i really am entitled to some bragging rights now that the finanical year end monies are reported. Got it right on two accounts. Some 7 or 8 months ago said our revenue would top 200 million for this finanical year and for the calander year 2008 would top 300 million. At the time it looked a bit over the top but there it is for all to see. Also said that the revenue for 08/09 would not drop nearly as much as first projected.Now tui has been upgraded from 6 million to 9 million.I first said this about 6 months ago.Yes today is pay off day for me on my forward planning projections,however before i pi-ss off too many with my bragging i had better sign off that subject.
Hang on also remember no div just now as too close to options exercise,so got it right count three. Count four will be when div is announced about end of sept,and if not i would say the desire to empire build is becoming more important than the interest of shareholders.

[tim23]

Maybe they can now afford to put on more sausage rolls at the agm.
__________________
Toddy

There was plenty of superb food (inc sausage rolls) at last years AGM at the Intercontential, my son & I had a great feed!

[Casa del Energia]

Revenue reported in stuff as well.

http://www.stuff.co.nz/4638247a13.html

and again there is Mr Salisbury's comment ..

"This includes looking beyond New Zealand, as the opportunities currently
available here are too few to confidently satisfy our growth targets"

is in there. This is about the millionth hint that they WILL buy something overseas. And the more I think about it - the inevitibility increases - no drilling till 2009 at least - and NZ is a small pond for quarter of a billion in cash sitting about AND the comment that it's all in short term deposits.

Watch that space.

Looking forward to the AGM - I live for sausage rolls.

[swissboy]

In that report it also mentions full year financials will be out by end August so not long to wait

[QOH]

Maybe they could give us all a specimen jar full of oil at the AGM, as a souvenir.

[Chalice]

Maybe they could give us all a specimen jar full of oil at the AGM, as a souvenir.

Great idea, maybe marinating a piece of PRC coal..

[Casa del Energia]

Great idea, maybe marinating a piece of PRC coal..

And fizzed with injected Kupe gas.

[Dr_Who]

Maybe all shareholders gets to fill up their car for free at the AGM? I will bring the big V8 4wd. :D

[Billy Boy]

:DLatest rumor :- Hot from the Hair dresser(s) & Taxi drivers.
The AGM is gonna be in Invergumboot coz NZO are looking
at the Great south Basin. But its still a secret so no yabbing you lot.
And by hell you'll get some S/rolls then.... filled with oysters.
Serve by our very own Southern Bells !!!! :D:D none the less :D
And keep you hands to yourself coz the cutest is sixteen stone, and
can she pack a backhander.
Ask Tim the Mayor !!!

[777]

Sorry Billy Boy but the venue has already been announced. Wellington.

http://investorcentre.nzog.com/phoenix.zhtml?c=171108&p=irol-AGM

[Billy Boy]

Sorry Billy Boy but the venue has already been announced. Wellington.

http://investorcentre.nzog.com/phoenix.zhtml?c=171108&p=irol-AGM

NO NO NO read the fine print !!!

[fish]

Tapis is $136
nz/us 73 cents
Tui producing well
$280 million sitting in bank deposits
SP would probably be over $2 if a dividend had been announced
Maybe the directors need reminding they need to keep all shareholders onside

[777]

Big buy orders at close of play. Heading for a 1.67 close.

[sideline]

looks like a strong finish coming up.....

[zorba]

.

What a great ending to the day ..... couple of million go through at 5 pm and price is up at 166 cents !!

Z

[troyvdh]

...after 20 plus years.......gee this is good......oh so good......i have been here before......

[Drone]

Yeah solid ending. I like it.

Not sure what all this divvy talk is about, divvys are normally announced in conjunction with financial results (i.e the full year results towards the end of august if at all).

This is simply an activity report. Nothing more or less.

Cheers

[fish]

Big buy orders at close of play. Heading for a 1.67 close.

I found it fascinating watching the close of trading today-I needed some cash and was debating selling some tel ,tpw,cen or nzo . A decison I was finding hard as all seem undervalued-decided to sell 10 000 tel at 3.81 which was completed when there was a mad rush of buyers for nzo-prepared to pay $1.70.
I presume at this stage a lot of sellers came out of the woodwork and kept the price down to 1.66
How did you manage to work out the close so accurately 10 mins before the close ?

[blockhead]

Big gap between buyers @ $1.61 and sellers @ $1.66 at the end of play, interesting to see who is playing ball tomorrow morning.

[777]

I found it fascinating watching the close of trading today-I needed some cash and was debating selling some tel ,tpw,cen or nzo . A decison I was finding hard as all seem undervalued-decided to sell 10 000 tel at 3.81 which was completed when there was a mad rush of buyers for nzo-prepared to pay $1.70.
I presume at this stage a lot of sellers came out of the woodwork and kept the price down to 1.66
How did you manage to work out the close so accurately 10 mins before the close ?

If you look at the total shares the two buyers wanted at 168 and 170 then go down the sellers totals until you get the same approx total then you have a settlement price. It of course can change quite quickly. eg if someone came in and wanted to sell say 200,000 at 164 then you need to look again and recalculate. It is easy with DB as all you need to do is hold the curser over the red dots on the depth page to get the sum of the shares for sale above the price you have selected. Hope this helps.

[neopole]

with all the option monies and tui monies sitting in a bank account along with a depressed sp........ im wondering how hard it would be for someone to take a stand in the market to get 51% and use the shareholders wealth to partially pay for the takeover?
i think the board should be bending over backwards to protect the piggybank before it gets taken off them.
best way to do it is to shore up the sp.
giving a divvi will help boost that, or finding a large cornerstone holder.

If nzo is not careful, i can see them being raided and delisted, and current share holders missing out on the real spoils to come in the future.

just my opinion....

[tim23]

51% holder won't delist the company not much point in a divvy a buy back might be the go but in the meantime they must be running the rule over several prospects.

[fish]

If you look at the total shares the two buyers wanted at 168 and 170 then go down the sellers totals until you get the same approx total then you have a settlement price. It of course can change quite quickly. eg if someone came in and wanted to sell say 200,000 at 164 then you need to look again and recalculate. It is easy with DB as all you need to do is hold the curser over the red dots on the depth page to get the sum of the shares for sale above the price you have selected. Hope this helps.

thx 777 .
Does that mean all the sales go through at that settlement price-ie those sellers listed at 1.62 actually got 1.66 ?

[777]

thx 777 .
Does that mean all the sales go through at that settlement price-ie those sellers listed at 1.62 actually got 1.66 ?

Exactly. As the sales show.

It works the same way at opening as well. You end up with buy and sell quote with all achievable trades completed.

[neopole]

i realise 51% wont delist the company, but 51% is an easy first target and gets control,
after that mop up the rest..........

[neopole]

and a buyback only puts cash in the pockets of traders and speculators.
the longterm investor and supporter of the company misses out in the short term.

[shasta]

i realise 51% wont delist the company, but 51% is an easy first target and gets control,
after that mop up the rest..........

Just remember 51% does not give you control over the cashflows!

90% + & complusory acquistion does ;)

[tim23]

A buy back reduces number of shares on issue and would increase earning per share?

[Paddie]

with all the option monies and tui monies sitting in a bank account along with a depressed sp........ im wondering how hard it would be for someone to take a stand in the market to get 51% and use the shareholders wealth to partially pay for the takeover?
i think the board should be bending over backwards to protect the piggybank before it gets taken off them.
best way to do it is to shore up the sp.
giving a divvi will help boost that, or finding a large cornerstone holder.

If nzo is not careful, i can see them being raided and delisted, and current share holders missing out on the real spoils to come in the future.

just my opinion....

I agree Neopole,

NZO should be worth well over $2 by now.

Management just don't seem to be active in increasing shareholder wealth.

The environment they have had of late I doubt will get any better, so why would you not reward loyal holders.

I believe that this is part of the reason holding back the price.

$2.50 should be around the corner yet posters are high fiving over $1.66 today.

Not me!

Paddie

[tim23]

Gee you guys are hard to please share price up 70% this year alone, management can't talk up the share price as such, I reckon they're doing fine.

[fish]

[QUOTE=Paddie;216051]I agree Neopole,

NZO should be worth well over $2 by now.

Management just don't seem to be active in increasing shareholder wealth.

The environment they have had of late I doubt will get any better, so why would you not reward loyal holders.

I believe that this is part of the reason holding back the price.

$2.50 should be around the corner yet posters are high fiving over $1.66 today.

Not me!

Paddie[/QUOTE
Fully agree with you Paddie .
I hate it when management starts talking about taking shareholders funds overseas-we almost always seem to lose out-look what it did to Telecom in Australia and Air NZ with ansett.
TTP is another bad example albeit due to a majority shareholder and a board of directors not acting in the interests of shareholders.This saga taught me a lot about minority shareholder rights and thanks to all who participated we won at arbitration and the high court appeal .
NZO board have in my opinion in recent times acted well and made good decisions . However that doesnt stop them-as it didnt stop the air nz/tel boards getting carried away trying to expand overseas with disastrous results .
I believe we have shareholders posting on this thread with a wealth of experience who would make excellent directors acting in our best interests-eg digger , bermuda , unicorn.
The board has space for another director and additionally 2 directors have come up for re-election .
Maybe its time to make our votes count- Amongst family and friends outside this thread I could muster up over 3 million and digger has more than me -bermuda mentioned a few weeks back he had a 100,000 and fried egg must have more than this( I am just pointing out the magnitude of shares some posters hold and not that they agreee with me ).
If others want to explore this avenue please could they post here-or send me a private message so we could gauge if this road is worth exploring .

[tim23]

So a change of director or 2 is going to get the shares over $2 - the market decides what they are worth and today its $1.66

[Unicorn]

I agree Neopole,

NZO should be worth well over $2 by now.

Management just don't seem to be active in increasing shareholder wealth.

The environment they have had of late I doubt will get any better, so why would you not reward loyal holders.

I believe that this is part of the reason holding back the price.

$2.50 should be around the corner yet posters are high fiving over $1.66 today.

Not me!

Paddie

We live in uncertain times. All shares should be expected to be at a larger discount than in more settled times. NZO have just completed the largest fund raising on the NZX this year, which should be expected to force the share price towards the issue price for a while.

Management appear to have delivered an underlying operating profit well in excess of $100M, and the Pike holding is currently worth more than $100M above book value. Kupe appears to be progressing well for such a large project. I think management has done very, very well for their shareholders this year.

If you invest on NZX you need to accept that your shareholding will be at a discount to the underlying value, at least until an overseas buyer decides to take your company over. This is a legacy of the 1987 crash, a fixation with property, and a widespread preference for borrowing rather than investing. I don't think we can blame NZO management for that.

I am pleased to see that NZO is clearly not just resting on its Tui laurels. There are already things happening to grow the company further, and clear attention being paid to more growth into the future. Many of these things can't be rushed, so we should be pleased that there have been no hasty decisions made.

I am happy that short term panaceas like throwing dividends at shareholders are taking second place to the more important issues of sound financial management going forward. NZO shareholders have had a great year, and have a lot to look forward to in the year ahead. Can't ask for much more than that.

[fish]

So a change of director or 2 is going to get the shares over $2 - the market decides what they are worth and today its $1.66
Quite right Tim

[tim23]

Well put Unicorn - I'm a satisfied holder and I suspect at this years AGM it will be the David Salisbury show - last year I felt he was a bit overshadowed by Tony Radford.

[Sideshow Bob]

Can someone please remind me approx how much per barrel it costs to produce out of Tui - I have a figure of about $10 USD per barrel??

Thanks
SSB

[upside_umop]

Good post unicorn.

Fish, would you not consider NZO expanding overseas is just a not a little different to WHS and TEL?

Geology changes, yes..but not so much that NZO's experienced team couldnt exploit other areas overseas. There is no brand challenge (WHS had to try convince australians to convert to them...so did TEL). NZO will always be able to sell oil, because it is a common good at the market place. It doesnt have to convince people to buy it.

[Sumnerned]

Well said, Unicorn.

I'd just add that many NZ investors also seem to have a fixation with dividends.

[friedegg]

Well said, Unicorn.

I'd just add that many NZ investors also seem to have a fixation with dividends.
probably because it makes them feel like its a bit like putting money in a bank

[fish]

Good post unicorn.

Fish, would you not consider NZO expanding overseas is just a not a little different to WHS and TEL?

Geology changes, yes..but not so much that NZO's experienced team couldnt exploit other areas overseas. There is no brand challenge (WHS had to try convince australians to convert to them...so did TEL). NZO will always be able to sell oil, because it is a common good at the market place. It doesnt have to convince people to buy it.

Absolutely-everycase is different . I have only recently sold out of air nz but you will recall it was the purchase of ANSETT that resulted in the loss of shareholder value and eventual near government buyout to prevent it going down . You have to admit nz companies buying overseas assets seldom preserves shareholders funds-so why do it ?-you need very good reason in my opinion

Have we really exhausted Staying in this country and trying to maximise shareholder value eg-by further drills in taranaki plus maybe taking a big stake in ppp plus other local oppurtunities -?csg etc.-this would allow dividends to be paid with imputation credits not forgetting lower royalties .?

If NZO ventures overseas it will likely need shareholder approval . I wonder how many shareholders would vote against it and seek minority buy-out rights .
This board needs to realise they should try and keep all shareholders happy . Rather than putting 280 million in bank accounts I think 200 million would have done and a 20 cent dividend with full imputation credits could have been paid

If this had been the case today I believe the sp would have been close to 2 dollars and we all would be very happy .

[digger]

Good post unicorn.

Fish, would you not consider NZO expanding overseas is just a not a little different to WHS and TEL?

Geology changes, yes..but not so much that NZO's experienced team couldnt exploit other areas overseas. There is no brand challenge (WHS had to try convince australians to convert to them...so did TEL). NZO will always be able to sell oil, because it is a common good at the market place. It doesnt have to convince people to buy it.

True oil is international sold and you sure do not have to convince people to buy it. If that was the only problem with this sudden desire to expand overseas i would be all for it .The problem is much greater.Here is my gut feelings against it.
Firstly i started in NZ in 1962 with nothing and as i finanically grew found i had to constantly leave behind former friends or go down the road they took. In nearly all cases this road was that at some stage most people get money and blow it.I would have to have many more fingures and toes to count them.So the problem is after a long time having no money then getting some and suddenly haveing to do a big spendup just because you can. That policy leads to the complete cycle where you soon have no money and are back to square one. Seen it too often .NZO could easily lose vast amounts by rushing overseas,and rushing overseas is any time in the interval of 5 years after you first find yourself no longer broke.
Changing laws and resource nationalisation is the first order of the day with oil development these days.Super oil companies are being pushed around all over the globe.What chance does little NZO have it this enviroment with the very small pot of gold we now have.Remember we just began to get money in the last year and i say are biggest threat is the way new money almost always burns a hole in the newbe wealth pocket.
NZ or AUS is where we should stay for the forseeable future.I love NZO too much to see us risk this just because we have two bob to rub together,and by international standards that is all we have.

[digger]

Fish good call on suggesting that sellers consider holding off until after the quartely. Anyone taken that advise will be well rewarded from tomorrow.

[Corporate]

True oil is international sold and you sure do not have to convince people to buy it. If that was the only problem with this sudden desire to expand overseas i would be all for it .The problem is much greater.Here is my gut feelings against it.
Firstly i started in NZ in 1962 with nothing and as i finanically grew found i had to constantly leave behind former friends or go down the road they took. In nearly all cases this road was that at some stage most people get money and blow it.I would have to have many more fingures and toes to count them.So the problem is after a long time having no money then getting some and suddenly haveing to do a big spendup just because you can. That policy leads to the complete cycle where you soon have no money and are back to square one. Seen it too often .NZO could easily lose vast amounts by rushing overseas,and rushing overseas is any time in the interval of 5 years after you first find yourself no longer broke.
Changing laws and resource nationalisation is the first order of the day with oil development these days.Super oil companies are being pushed around all over the globe.What chance does little NZO have it this enviroment with the very small pot of gold we now have.Remember we just began to get money in the last year and i say are biggest threat is the way new money almost always burns a hole in the newbe wealth pocket.
NZ or AUS is where we should stay for the forseeable future.I love NZO too much to see us risk this just because we have two bob to rub together,and by international standards that is all we have.

Digger - this is why you should be on the board!

I wonder what will happen tomorrow?

[zorba]

........ This board needs to realise they should try and keep all shareholders happy . Rather than putting 280 million in bank accounts I think 200 million would have done and a 20 cent dividend with full imputation credits could have been paid

If this had been the case today I believe the sp would have been close to 2 dollars and we all would be very happy .

Fish, steady on, If I read the announcements correctly, NZO currently has approx NZ$64m of debt on its books ...... perhaps the company should first neutralise the debt before contemplating more dividends.

And IMHO there's no point in raising big bucks and then immediately given a whole heap back to shareholders.

I'm picking that as PRC achieves the milestones to significant coal production we will see PRC further uprated.

Given robust coking coal and oil prices, seems to me that NZO's shareprice will continue to be uprated as well .... $2 per share is achievable provided the US doesn't hit the skids.

Overall I agree with Unicorn, I think NZO management are doing a good job -- the next three months leading up to the Annual Report and the Sept Quarterly Report plus the AGM will all be very interesting.

No doubt we should get some steerage on where NZO is heading.

Also agree with Digger and others that NZO has to be careful with overseas projects .... I wonder how much attention has been given to joining some of the big AWE permits to the north-west of Tui ?

Z

.

[Anubis]

I've been thininking about that extraordinary finish on the market today (a buyer coming in and buying the large number of shares they wanted in the closing auction, with seemingly little regard for what price they had to pay compared with what prices were available earlier in the day). It is typical behaviour of institutional funds making adjustments to their portfolios on the last day of the month - unlike smaller individual investors they're not too worried about a few cents here and there in the price they pay - they need to buy a certain amount and they do it in the closing auction, and often on the last day of the month. Likewise all the crossings after market close. I assume that some of the funds will want or need to have increased their holdings in NZO due to increases in market cap weighting this month.

[digger]

We live in uncertain times. All shares should be expected to be at a larger discount than in more settled times. NZO have just completed the largest fund raising on the NZX this year, which should be expected to force the share price towards the issue price for a while.

Management appear to have delivered an underlying operating profit well in excess of $100M, and the Pike holding is currently worth more than $100M above book value. Kupe appears to be progressing well for such a large project. I think management has done very, very well for their shareholders this year.

If you invest on NZX you need to accept that your shareholding will be at a discount to the underlying value, at least until an overseas buyer decides to take your company over. This is a legacy of the 1987 crash, a fixation with property, and a widespread preference for borrowing rather than investing. I don't think we can blame NZO management for that.

I am pleased to see that NZO is clearly not just resting on its Tui laurels. There are already things happening to grow the company further, and clear attention being paid to more growth into the future. Many of these things can't be rushed, so we should be pleased that there have been no hasty decisions made.

I am happy that short term panaceas like throwing dividends at shareholders are taking second place to the more important issues of sound financial management going forward. NZO shareholders have had a great year, and have a lot to look forward to in the year ahead. Can't ask for much more than that.

Unicorn excellent summary of what NZO has achieved in the last year and so correct about NZ borrowing habits and a failure to develop investing skills.Can you also give us some of your thought on tomorrow.Where should we put this new found monies and how much risk do you put on going beyond aus. On this subject we are in reverse rolls as normally i find you too consertive but here it is me who fears undertakeing risks beyond our understanding of changing international rules.Experience and competence here in NZ is no indicator of success in the international oil wars taking place globally.I fear you don't.WHY?

[Toddy]

The only reason the SP went up today was because of the continuous ramping on this web site.

It looks like we are all going to be put on a two week holiday.

Thats no problem though, its going to take NZO management atleast two weeks to count all of that cash.

[AMR]

I would be happier with a close above 1.67, it's still nudging that old resistance.

[upside_umop]

Yeah Fish, I do remember AIR..I was a 5th form accounting student at the time, and my teacher said they would go under! But again, that is different circumstances. Its to do with operational management, and airlines are usually poor investments (very cyclical). Imagine though, if Ansett could have restructured into a low cost airline back then..could have been interesting.
Back to topic, they are very different IMO. Oil companies are best placed for international expansion apart from political risk, which digger mentions, but can be avoided.

Digger, those concerns are very real. Political/nationalisation are risks. Its also a risk here in NZ with our greenie members of public and parliament. What was that about no more gas power plants to be permitted? Austrailia looks to be the best bet. They are introducing a ETS which is the only risk i see in the medium term..but they wont risk their international competitivenss as this would be political suicide. I would however, be concerned if they had plans to invest substantially in 3rd world countries. Your just asking for it then arent you...

Diversification (people seem to hate this word) of their producing assets wouldnt be a bad thing. $280M is a lot of money, I cant possibly see how they would spend it in NZ (apart from PPP). Then when they offload PRC in the future, there could be another $300M or so. Maybe they will buy a company and leverage it somewhat with anticipation they can reduce debt when they sell PRC. Who knows.

NZO have also said they want their core business to be oil/gas, they dont want to deviate from this, which is a pity, given NZ govt has set standards to become less dependent on foreign oil. This could be an opportunity for NZO to do something with LMP/Solid Energy in the coal to liquids..be good to see them vertically integrate their business lines. Would keep more funds in NZ, and they would be less cyclical than other oil companies. Just my thoughts anyway.

[Unicorn]

Hi Digger

I am keen to see more exploration within the excellent Taranaki permits (PMP38158 and PEP3849 in particular). But there is clearly a difficulty in getting the rigs that are essential to that initiative - a look at the Diamond website shows that problem quite clearly. And the amount of cash that is available does mean there is a need to look elsewhere as well.

I would have been happier for the share price to have stayed down for a while, and the NZOODs to have lapsed. In these uncertain times I feel that would have been a safer outcome for all of us. But it did not work out that way, so now something productive needs to be done with the money - although not necessarily right away.

I take some comfort from NZO having a Chairman who knows the industry and has shown himself to be an astute operator. I also take comfort from the fact that nothing rash or hurried has been attempted since the growth strategy was announced. NZO has a board that knows the value of money - they have had many years of managing on a shoestring and I am sure they will not want to give their hard won profits away easily.

I am generally not in favour of overseas ventures, but in the current situation think it is an option that should be explored - but entered into only if the right deal can be found. I support the search for a deal, but that does not mean I will necessarily support any particular deal.

[shasta]

Exactly Unicorn.

If NZO find a "gem" of an opportunity, then go for it, otherwise wait...

One just needs to see how BPT destroyed shareholder value, chasing overseas projects all over the world!

[fish]

Hi Digger

I am generally not in favour of overseas ventures, but in the current situation think it is an option that should be explored - but entered into only if the right deal can be found. I support the search for a deal, but that does not mean I will necessarily support any particular deal.

Unicorn
If nzo did try and seek shareholder approval for a major overseas investment would I be correct in suggesting that minority nz shareholders who voted against this would be entitled to a fair and reasonable price for the purchase of their shares by the company .

The current share price would not be fair and reasonable as it is in a depressed market situation therefore a valuer would use what the components could be sold for-eg back of my cuff calc -cash 70 cents tui 70 kupe 70 and prc 70 -around $2.80 per share . The cash reserves of course would be much greater by the time of the compulsory purchase .Plus nzo might have to pay further interest and other costs-say $3 a share .

You would imagine the current board will have considered this -although they might not have the expertise and experience to understand the significance of the relevant sections of the companies act .

I actually want to be a longterm investor but preserving shareholder value would most likely take precedence if there is a change in direction of the company

[Rabbi]

Exactly Unicorn.

If NZO find a "gem" of an opportunity, then go for it, otherwise wait...

One just needs to see how BPT destroyed shareholder value, chasing overseas projects all over the world!

The price of BPT has lapsed, but this has more to do with the huge capital raising they had a $1.43. Prior to the capital raising the SP had been bouyant, at $1.60's.
In saying that , it is true, that their foray into Egypt is perceived by the Shareholders with some trepidation, but this play could yet turn out to be immensely profitable for Beach.
Presently ALL Australian oilers are under the hammer!
I thought I should point this out as what you are saying is pure speculation;)

[Unicorn]

Unicorn
If nzo did try and seek shareholder approval for a major overseas investment would I be correct in suggesting that minority nz shareholders who voted against this would be entitled to a fair and reasonable price for the purchase of their shares by the company .

The current share price would not be fair and reasonable as it is in a depressed market situation therefore a valuer would use what the components could be sold for-eg back of my cuff calc -cash 70 cents tui 70 kupe 70 and prc 70 -around $2.80 per share . The cash reserves of course would be much greater by the time of the compulsory purchase .Plus nzo might have to pay further interest and other costs-say $3 a share .

You would imagine the current board will have considered this -although they might not have the expertise and experience to understand the significance of the relevant sections of the companies act .

I actually want to be a longterm investor but preserving shareholder value would most likely take precedence if there is a change in direction of the company

I doubt that NZO would take on a 'major transaction'. Therefore there is unlikely to be a need for a special resolution, and no compulsory share purchase.

[digger]

Hi Digger


I take some comfort from NZO having a Chairman who knows the industry and has shown himself to be an astute operator. I also take comfort from the fact that nothing rash or hurried has been attempted since the growth strategy was announced. NZO has a board that knows the value of money - they have had many years of managing on a shoestring and I am sure they will not want to give their hard won profits away easily.

Hi Unicorn ,again i agree with most of your post except some of this quote above.The only comfort i take from NZO's decision to look beyond Aus is that TR has his neck on the block even more than i do,so yes i do agree he will not want to see that go down the drain. In fact none of the directors will desire that outcome,but my point is that apart from TR there neck is just not on the block as there shareholding is miniual.
We are strongly at odds over what makes up a useful value of money. Living on a shoestring and managing later to get money as NZO has done is only the beginning.As i pointed out before i have seen many people get money but not be able to make the next hard step of managing it to get more. 90% of them go for the big spendup and are soon back on a shoestring.
For me a dread outcome would be for TR to suddenly drop dead.If that were to happen NZO would pass entirely into the hands of the remaining directors who have put very little of their own monies into the company.As competent as they may be in their areas of expertize their assesment towards a spend up would be much more tempered if the money is coming from their own pocket than someone elses.

[Bilo]

Reuters today:
"Western oil companies' output has fallen in recent years and oil producing countries now prefer to award their richest fields to their own national oil companies."

I mean Australia are onto it. They started with keeping Shell's involvement in WPL down. Yet NZ back Exxon. Well I suppose Exxon is the NZ super funds largest investment....but that is not the same as developing NZ for NZers.

It seems crazy to me that NZ explorers' are not required to be in on the ground floor with the most prospective territory. The rest of the world has gone that way. The "tender processes" used favours the big guys but there must be a way of structuring the tender so that more investigative work is conducted by NZ in conjunction with Crown Minerals and then get the NZ companies to farm out once the costs become astronomic. There must be a way of the little guys learning and growing bigger in their own patch.

Buy Kiwi I say to the government/Crown Minerals. Perhaps two tier tendering where foreign company dollars only count as 30pc of NZ company dollars in evaluating mineral tendering rounds. That way the resource tender's would have to be channelled through NZ companies. Does this sound way out?

And to NZO the most profitable field development in the world must be Tui - why would you risk off shore when so much is still to be done on your doorstep? So it takes time - we can wait for the right opportunities at home. NZO has some capital now, it needs to be preserved. NZO needs to be preserved and not sold to the highest bidder as Fletcher Challenge Energy disappeared just as they were becoming useful. When it comes to capital purchases NZ'ers have never (in my lifetime) competed because our cost of capital is kept at astronomic levels. Tilt the playing field back towards our companies I say.

[Anubis]

Good news article this morning:

http://www.stuff.co.nz/4638685a13.html

In discussing acquisitions, Mr Salisbury "ruled out coalseam methane gas".

[sideline]

In discussing acquisitions, Mr Salisbury "ruled out coalseam methane gas".

I am glad to hear that. CSG would be very difficult to make a profit of and its financial
metrics are nothing like those of conventional oil and gas.

[bk]

I take it this stands for the Volume Weighted Average Price? On the Direct Broking website I see 2,042,875 shares sold for a total of $3,347,758 - which results in an average of $1.639 and that is what the page says.

However, it also shows a low of $1.60 and a high of $1.63 - how can the average be higher than the highest price? Am I missing something?

[Bob C]

BK,

The average will include the trades before the market opened; 1.2m were crossed at $166 at 9.24am.

Bob C

Still holding and buckled in for the ride north.....

[bk]

Thanks Bob, that explains it. Although the volume traded then is the volume traded after market open, not the volume traded for the day, which has the potential to skew figures.

[777]

Thanks Bob, that explains it. Although the volume traded then is the volume traded after market open, not the volume traded for the day, which has the potential to skew figures.

What I understand is that the total $ divided by the total shares traded gives the VWAP. This does include all those shares traded prior and after the market period but the price used for these is not used in the high/low for the day figures. Therefore the $1-66 is not shown for the high today.

[dsurf]

Can anyone tell me if a liability for capital gains can occur before the shares are sold, ie at the end of a financial year? or will the gain only be taxable when the shares are sold?

Looking at some big paper gains in the 07/08 financial year and am wondering if I will be liable for tax even though I have not yet sold the shares.

Technically I qualify as a trader even though I currently only do 10 to 20 trades a year.

[digger]

Can anyone tell me if a liability for capital gains can occur before the shares are sold, ie at the end of a financial year? or will the gain only be taxable when the shares are sold?

Looking at some big paper gains in the 07/08 financial year and am wondering if I will be liable for tax even though I have not yet sold the shares.

Technically I qualify as a trader even though I currently only do 10 to 20 trades a year.


dsurf are you refering to overseas shares or just nz ones? I have never heard of nz shares being subject to what would be capital gains but there was some govt plan to do that on overseas shares.I am not longer a trader but when i was about 7 years ago i only paid tax on realised profits.Still it will be good to get an update on this for this site from someone with current experience.

[dsurf]

NZ predominantly. I do not suggest this is a course of action for anyone else as borrowing to buy shares is dangerous.

However for a number of years I have used interest deductability from my NZO holdings financed via the mortage to lower my effective tax rate back towards 33%. I am currently thinking if I should continue to do this until I have no income, at which point I could then slowly sell down approx 30K a year and pay no / little tax on the capital gain

[blockhead]

looks like same late interest again tonight, no buyes all day above $1.62 and just before 5.00pm they appear at $1.63 - $1.64

[troyvdh]

I would suspect that a financial year is irrelavent.....its "your intention at time of purchase"......tread carefully and pay someone good for advice.

[Casa del Energia]

looks like same late interest again tonight, no buyes all day above $1.62 and just before 5.00pm they appear at $1.63 - $1.64

I don't think it's just 'late interest'. Have been watching this for two days - steady but subtantial buying all day; last nights jump was just brokerage crossing up at end of day. Same pattern tonight. And yet.. no SHH notice.

Theories anyone?

Oh - and about tax on capital gains - no tax for unrealised stuff UNLESS its overseas shares held by private individuals with greater than 50k worth - then its 5% tax. And to make matters worse - there's no credit if you make a paper loss (Ratbags)

[777]

A trading gain is different to a capital gain. dsurf states he is "technically" a trader. The fact that he has deducted interest payments against previous income no doubt confirms this. You can deduct interest only against income producing assets. Shares producing a regular dividend would qualify but NZO over the past few years have not indicated that.

Personally I pay tax on my realized/unrealized profits/losses each year. Some years I pay tax others I get a refund.

Any discussion on this topic is going to get all sorts of "bush accountants" theories. An hour with an expert is worth paying for.

[Mick100]

Personally I pay tax on my realized/unrealized profits/losses each year. Some years I pay tax others I get a refund.

.

Why do you pay tax on unrealised profits?
Sounds like your the person who needs to see a financial advisor

[777]

Why do you pay tax on unrealised profits?
Sounds like your the person who needs to see a financial advisor

Because then I can claim all my costs incurred against them. Interest,magazines,internet,computer depreciation,telephone(part of), brokerage, meeting expenses etc etc.

It's tidy and the IRD don't complain.

Financial advisors know zip about tax!

Tax experts need to be qualified people.

[shasta]

Because then I can claim all my costs incurred against them. Interest,magazines,internet,computer depreciation,telephone(part of), brokerage, meeting expenses etc etc.

It's tidy and the IRD don't complain.

Financial advisors know zip about tax!

Tax experts need to be qualified people.

777

Individuals are treated on a "cash basis" not accrual basis, therefore only realized gains are taxable (& losses claimable).

The IRD won't complain about you paying more tax now, just be careful in future years that this doesn't come back to bite you.

NZO would have plenty of shareholders sitting on unrealized gains.

I presume many here (like Digger, Blockhead & co) are buy & hold long term investors?

Sorry to be off topic - 777 Pm me if you have any questions ;)

[fish]

[QUOTE=shasta;216299]777

NZO would have plenty of shareholders sitting on unrealized gains.

I presume many here (like Digger, Blockhead & co) are buy & hold long term investors?

Buying with the intention of being a long-term holder should make me bullet -proof from the point of view of the IRD and enable the best tax efficiency .
For the last 25 years -since emigrating to NZ I have worked long and hard and always been in the highest tax bracket .
This year my tax bill will be a lot less-I might even be in a low tax bracket-yet my gross earnings should be higher than ever
Using the ASB margin trading account I have bought a lot of NZO with the intention of long-term holding and no trading .
NZO have stated they will pay a reasonable proportion of earnings as dividends .
Hence I have borrowed to buy an income producing asset and all interest is tax deductible-as would any other expenses involved in this .
In general I agree with most of the advice given on this thread not to borrow to buy shares.However anyone that has an income that is higher than they need for living expenses and wants to invest in nzo this scheme is a good way of making it tax efficient .

[shasta]

[quote=shasta;216299]777

NZO would have plenty of shareholders sitting on unrealized gains.

I presume many here (like Digger, Blockhead & co) are buy & hold long term investors?

Buying with the intention of being a long-term holder should make me bullet -proof from the point of view of the IRD and enable the best tax efficiency .
For the last 25 years -since emigrating to NZ I have worked long and hard and always been in the highest tax bracket .
This year my tax bill will be a lot less-I might even be in a low tax bracket-yet my gross earnings should be higher than ever
Using the ASB margin trading account I have bought a lot of NZO with the intention of long-term holding and no trading .
NZO have stated they will pay a reasonable proportion of earnings as dividends .
Hence I have borrowed to buy an income producing asset and all interest is tax deductible-as would any other expenses involved in this .
In general I agree with most of the advice given on this thread not to borrow to buy shares.However anyone that has an income that is higher than they need for living expenses and wants to invest in nzo this scheme is a good way of making it tax efficient .

Fish

I too had NZO on margin loan, but that was during the "bull market".

I don't use margin lending during a "bear market", way too risky!

ASB Sec had NZO on 50% loan prior to production!

[Casa del Energia]

A trading gain is different to a capital gain. dsurf states he is "technically" a trader. The fact that he has deducted interest payments against previous income no doubt confirms this. You can deduct interest only against income producing assets. Shares producing a regular dividend would qualify but NZO over the past few years have not indicated that.

Personally I pay tax on my realized/unrealized profits/losses each year. Some years I pay tax others I get a refund.

Any discussion on this topic is going to get all sorts of "bush accountants" theories. An hour with an expert is worth paying for.

Whoops - sorry, I missed the 'technically' a trader statement. (But one should check with your local CA on this as it gets a little grey where the crossover is - - besides - your CA often has a good relationship with the local IRD dude and can swing you a 'good result' if he/she/it is any good. Now - enough of this tax talk - really off subject.)

[the machine]

see nzo now have weekly average tapis price on website under tui section

thisis good

M

[Casa del Energia]

see nzo now have weekly average tapis price on website under tui section

thisis good

M

Yes. And the web site revamp has generally produced a far more informative site. It is now very good - - wonder if the groaning about the lack of detail info had anything to do with it. (or probably not - I'd imagine a six month lead time to produce it.) (Nice colouring too. Pity about the java script)

[fish]

[quote=fish;216320]

Fish

I too had NZO on margin loan, but that was during the "bull market".

I don't use margin lending during a "bear market", way too risky!

ASB Sec had NZO on 50% loan prior to production!

Shasta

For a trader I agree margin trading would be ill-advised during a bear market .
For a long-term investor the success or otherwise of margin lending depends on whether interest rate charged is less than dividend received plus capital appreciation .
About 30% of my holding is loaned by margin trading so I feel secure that i will not recieve a margin call
A simple alternative way of looking at whether it pays to borrow to buy this share is that the earnings per share look like being around 50 cents pa -the cost of borrowing to buy a share is 17 cents(10% interest ) which for me is tax deductable at 39% so net cost is 10 cents a share per annum .Therefore total profit is 40cents per share per year .

[fabs]

Nearly 300mil. in term deposits?
Makes me a bit uneasy in the present climate!
Invested in AA or better rated Inst. now have we not heard that somwhere before?
FABS.

[zorba]

.

Fabs,

Welcome to the thread .....

Yes, it also had me worried, AA rating, wot a w.ank on the part of our esteemed rating agencies, they should all be the subject of class actions for fraudulently misleading the global investment industry with there totally false and completely self serving AA and AAA ratings for those CDOs that where riddled with sub-prime c.rap. [And locally, Hanover goes from BB+, before collapse, to D for default, they day after default, thanks to Fitch for supplying us with that wonderous example of local ratings rubbish]

Just so long as the smart alec bankers sitting on top of there 210th floor super high rise downtown Manhatten sky-scraper, can put together a totally bull.sh.ite package and then get a huge bonus at the end of year, well I am not surprised that these "fast money" mendacious bankers got bombed !!!!

I hope some republican redneck is reading this, then we can hear some more reasons why they launched such an immoral invasion and splurging trillions of dollars on a corrupt military gung-ho errol flyn kind of "dont mess with us, or else we will show you" kind of yanki-doodle we will save the world and grab the oil at the same time.

Anyway I gues NZOG'ers should thank the republican rednecks, and there democrat lackeys, for driving up the price of oil with there completely stupid foreign policy military defecations. To say nothing of the 50,000 plus Iraq civilian deaths due to "colateral" damage. Frankly Bush and all his "PNAC" (google it) sidekicks need a colonoscopy to find more about how to purge them of their colateral cr.ap.

Yes, wot a rant, but its all true, if badly spelt !!!!!!!!!!!!!!!!!!

Z

[fish]

Nearly 300mil. in term deposits?
Makes me a bit uneasy in the present climate!
Invested in AA or better rated Inst. now have we not heard that somwhere before?
FABS.

Probably over $300 million by now fabs--Tui is still producing around $900,000 a day .
If you are planning buying overseas it would have paid to have some of it in overseas currency when the Kiwi was strong .
In fact by xmas there should be around a dollar a share in the bank -not counting what pike does .
I really think they should diversify the risk-eg return 1/2 to shareholders !

[the machine]

mon/tues looks like a good weather window tol ose the rig after momoho


one wonders how much the the cost is to keep rig on station waiting to move and who pays for it


m

[digger]

mon/tues looks like a good weather window tol ose the rig after momoho


one wonders how much the the cost is to keep rig on station waiting to move and who pays for it


m


We do ,so it looks like it turned out to be an unfortunate call to not explore both sides of the Momoho fault.Would imagine there would be a daily charge for having the rig on site but it will be less than drilling. As a farmer i know only too well how easy it is to call the weather wrong but that is what happens when you are up against nature.

[Corporate]

This morning I've been thinking about what is going to make NZO's share price appreciate in the long term.

1. Tui - We all know it has performed beyond any expectation, and high oil prices have just further compounded this. However, the best is probably behind us, as production is set to decrease. The market knows how successful Tui has been and unless further reserves are discovered, I can not see this as a driver of a higher share price. The future revenues are factored in, along with market sentiment.

2. Kupe - Apparently 80% complete. As and when Tui revenues decline. Kupe will hopefully kick in, and will enable NZO to maintain a steady stream of revenue. However again, I don't see it as driving the share prices from where we are currently at. Tui down, Kupe takes over.

3. Pike - Is Nearing productions which should see a re-rate. It seems that NZO's intention, from what I understand has always to eventually sell out in one way or another. This will just add further cash to the kitty, and isn't really a long-term share price driver.

4. Momoho - A bit of a dead duck for the foreseable future.

So the long term share price appreciation seems to hinge on what NZO do with all the Tui and Option Cash. They are fundamentally sound; with the value of cash and PRC totaling about half the current market cap, along with steady income streams from Tui and then Kupe.

I'm not in favour of NZO paying out a 10-20c dividend for the sake of it. I want growth, and a heafty dividend is short term thinking in my view! Sure if they can't find something worth spending the cash on, then fine, give it back.

Even buying PPP and returning any revenue to shareholders above payback would be a better option than spending what cash we currently have on a dividend. Once it's gone, it's gone.

This is a bit of a thought dump. But interested to see other peoples views.

[Mick100]

sounds like it's time for you to sell;)

[Corporate]

sounds like it's time for you to sell;)

Don't get me wrong. I still think there is 20% SP appreciation to come, $2 should be achievable. I'm talking about longterm prospects of say 100% growth.

[duncan macgregor]

Don't get me wrong. I still think there is 20% SP appreciation to come, $2 should be achievable. I'm talking about longterm prospects of say 100% growth. Everything depends on the next hole in the ground nothing more nothing less. It is an expensive high risk game that can go either way you gotto have faith my friend if not get out. Macdunk

[tim23]

I thought it was all to do with what the chart was saying?

[blockhead]

I thought it was all to do with what the chart was saying?

No Tim you didn't listen to McDunk, its to do with the market, market down...NOG down, market up...maybe NOG up, pretty simple,...according to "share dealing 101" with McDunk

[tim23]

Is that when you use the 30 day MA to pick up road kill from the blue eyed brigade?

[blockhead]

Is that when you use the 30 day MA to pick up road kill from the blue eyed brigade?

You have been listening after all !

[digger]

This morning I've been thinking about what is going to make NZO's share price appreciate in the long term.

1. Tui - We all know it has performed beyond any expectation, and high oil prices have just further compounded this. However, the best is probably behind us, as production is set to decrease. The market knows how successful Tui has been and unless further reserves are discovered, I can not see this as a driver of a higher share price. The future revenues are factored in, along with market sentiment.

2. Kupe - Apparently 80% complete. As and when Tui revenues decline. Kupe will hopefully kick in, and will enable NZO to maintain a steady stream of revenue. However again, I don't see it as driving the share prices from where we are currently at. Tui down, Kupe takes over.

3. Pike - Is Nearing productions which should see a re-rate. It seems that NZO's intention, from what I understand has always to eventually sell out in one way or another. This will just add further cash to the kitty, and isn't really a long-term share price driver.

4. Momoho - A bit of a dead duck for the foreseable future.

So the long term share price appreciation seems to hinge on what NZO do with all the Tui and Option Cash. They are fundamentally sound; with the value of cash and PRC totaling about half the current market cap, along with steady income streams from Tui and then Kupe.

I'm not in favour of NZO paying out a 10-20c dividend for the sake of it. I want growth, and a heafty dividend is short term thinking in my view! Sure if they can't find something worth spending the cash on, then fine, give it back.

Even buying PPP and returning any revenue to shareholders above payback would be a better option than spending what cash we currently have on a dividend. Once it's gone, it's gone.

This is a bit of a thought dump. But interested to see other peoples views.

Hey that is not how i see it.
TUI----you have tui all factored in.This is getting to be a bit of a stuck record.First heard that one about 3 years ago.In fact it was even factored out by some as costs were going to be higher and we were even supposted to sell it all at 40 dollars while the going was good.For the records TUI has proven it is still going to beat the conserative JV estimates which is the way we want it.Certainly not underpreforming. By world standards the TUI area is lightly drilled so much potential there yet.
Kupe is a winner for years to come.Do note that TUI with one year to production had little effect on SP as given today,and similiary Kupe effect is yet to come.The market just wants and will wait for the bank account to measure if Kupe has any hydrocarbons or not regardless of that our geologists tells us.
Pike.I probably was always the biggest supporter of this project from day one.I come from a mining family in Canada so the extraction of this coal in this world time always made good economics to me.Am starting to think that maybe NZO should hang onto this investment.It will be a good long term money earner,so ask why sell it.Certainly little point in selling it to go off chasing some overseas project that are increasingly in danger of being nationalised the moment they becomes productive.
Momoho---the productive of this one is a function of price.Remember Kupe was not economic because of Maui and the then current price.This one is for a future time,which is a time far longer than investers will factor in.You can be sure though that the info gathered will be carefully stored.OK the market has this one at a drill cost and nil value.
There are other reasons why the SP is so low which i would like to express MHO about some other time.

[bermuda]

Good news article this morning:

http://www.stuff.co.nz/4638685a13.html

In discussing acquisitions, Mr Salisbury "ruled out coalseam methane gas".

I had a chat with DS in Sydney at the oil conference about purchasing VPE. Was going to get some material for him but decided against. I realised that would be a stupid idea. VPE is destined for QGC. NZO would only get into a silly fight and come up way short on CSG experience.

But most of all NZO need to stay in their existing field of expertise/experience. They know so much about Taranaki and have numerous targets lined up.I know they have a corporate plan to double through an acquisition/s but in my mind it would have to be done in the Taranaki area and that is why PPP must be the strong contender. Remember they sold it under duress and it is a perfect investment for them.

Stick to your knitting NZO. Taranaki will make us a fortune.

[gazprom1]

Does anybody have any thoughts on NOG buying Horizon (HZN)? Would be a big undertaking but would generate immediate (well nearly) income from Maari (which appears to have have upside potential) as well as other opportunities in China and PNG.

[zorba]

Hi Gazprom1 (Rusian connection ?), welcome to the NZOG thread.

A T/O of HRN is perhaps possible but it might be difficult for their shareholders accept anything less than 40 - 45 cents a share.

A script plus cash take over might be cheaper and might work.

For me the best fit would be PPP .......

Also here is a thoght outa left field:

BG manages to buy Origin and then divests NZ operations, including holdings in Kupe (50%) and Contact (51%). Could this open up some interesting options for NZOG ?

Z

.

[gazprom1]

Z,

As discussed here before, I think PPP could be a first step and then look for something else...Origin's NZ assets? Cost???

Re the Russian connection, I spent 5 years working in Russia running the Hermitage Fund...at that time it was Russian specific and we were large holders of Gazprom! Thought Gazprom would be a good name as it is a oil and gas co. and it has been very good to me!!!

[digger]

Z,

As discussed here before, I think PPP could be a first step and then look for something else...Origin's NZ assets? Cost???

Re the Russian connection, I spent 5 years working in Russia running the Hermitage Fund...at that time it was Russian specific and we were large holders of Gazprom! Thought Gazprom would be a good name as it is a oil and gas co. and it has been very good to me!!!

gazprom1 ,a big welcolm aboard.Your Russian experience if you would be so good as to share it with us will be invaluable.This site needs as much varied and new experience as it can get.Hope you stick around and share your thoughts.
Cheers.

[AMR]

Any thoughts on NZO going upstream? If Contact gets sold off by Origin the new owners might be interested in selling off the swift energy assets.

[digger]

Dividends
There have been several comments posted recently about pampering to shareholders by giveing out a dividend.Also another about a div just because you can.I would like to add my 2 cents worth on that subject.
Surplus money must be the one area of discussion that all we long term holders and directors have thought least about.Prior to very recently the only connection we have had with money is finding it somewhere somehow to fund the three projects.It is only in the last 6 months this situation has explosively changed,so whoever comes up with an idea how to best spend money is treading on virgin territory.
My own is radically opposed to what i would have thought years ago.Mostly i invested in shares that had blue sky and sold out as production and income sent the share skyward,so have little experience in dividends and there effect on SP..Now i am staying and retiring with NZO so have to face the what to do with surplus money question..In the past i would have said never pay a dividend and let the sp rise by that much.However if anything i am a pragmatist and it seems clear to me that the NZ investing public want a dividend and measure the success or otherwise of a share on yield.My recent approach to the bank to borrow money to fund NZOOD conversion came right up against'what is the three 3 yield?'. Many discussions i have had with potential investers have stalled as NZO has no established yield.My attempts to say otherwise were always dismissed as yeilds are the in thing on this market and i will just have to be a pragmatist and accept that it works.
The recent 5 cent dividend confirms this.To my suprise the share price went up when if i thought about it at all should have dropped by 5 cents.So it now seems clear to me that the SP is marked down on lack of consistant divs. My final conclusion then is that dividends should be given until the point of gain starts to drop by the amount of the dividend,and i now think this because that is how the market wants it. In fact i would go so far as to say that we could unlock a lot of potential future inflow of sp appreciations by a regular income stream that formally went to the finance companies.

[Casa del Energia]

Dividends
There have been several comments posted recently about pampering to shareholders by giveing out a dividend.Also another about a div just because
....... (sic).......to say that we could unlock a lot of potential future inflow of sp appreciations by a regular income stream that formally went to the finance companies.


And my 2 cents worth:

I philosophically favour dividends.

There will be further explorations/perhaps acquisitions but they 'should' be paid for out of debt or capital raising (and don't forget there has been a recent share issue) as it isn't 'normal' for one part of a business to subsidise another out of company profit. Remember that one of the costs of development of new business is legitimately the cost of capital - part of that is the borrowing costs. Releasing retained earnings to shareholders keeps a company focussed on the profitability of the individual business units and forestalls a tendency towards cross subsidisation. In a way it forces a business to concentrate on units that are worthwhile rather that 'nice to do'.

I could also rattle on about investors perception and share price effects - but you've already covered that to good effect.

[Rabbi]

I tend to favor dividends myself, especially if there is a tendency for the share price to stagnate as is happening at the moment. When the co. announces the full year result we will know what their policy is regarding a full year dividend There is no reason why they cannot use some of their earnings to pay a dividend, and still retain a significant portion to fund an acquisition, or drill some of the more promising permits.
At the moment the Co. is only making a lot of noise about their future plans, but once they come clean, and make a decision one way or the other, the SP will fire up again. At the moment uncertainty about exactly how they will spend the money is having an effect on sentiment.

[airedale]

Z,

As discussed here before, I think PPP could be a first step and then look for something else...Origin's NZ assets? Cost???

Re the Russian connection, I spent 5 years working in Russia running the Hermitage Fund...at that time it was Russian specific and we were large holders of Gazprom! Thought Gazprom would be a good name as it is a oil and gas co. and it has been very good to me!!!

Hi Gazprom.....going off topic for a minute......a quick google of "Hermitage" reads like a John le Carre and the russian police involved in massive fraud. Amazing!

[gazprom1]

gazprom1 ,a big welcolm aboard.Your Russian experience if you would be so good as to share it with us will be invaluable.This site needs as much varied and new experience as it can get.Hope you stick around and share your thoughts.
Cheers.

Thanks Digger. I have been following this site for a while and thought it would be good to be involved. There are some excellent posters and great chat about NOG which I find informative.

Would be happy to discuss Russia and especially the oil and gas situation when I was there (I finished in 2003 - valued my life too much!). The Hermitage Fund was/is a very aggressive investor in Russia and we used to be involved in many lawsuits against oil/ resource companies so that we could protect our interests. Inevitably, this lead to counter-lawsuits and threats on employees from the "mafia" owners. Bill Browder, the founder of the fund, is now banned from Russia by the authorities (no reason given) but still does business there and has started up a global fund.

Gazprom is truly an outstanding stock story. Up until 3 years ago, "local" shares could only be bought by Russians which obviously kept the price artifically low. Foreign investors, including ourselves, set up structures in regions of Russia to comply with the law but which enabled us to buy local Gazprom shares. The market was then liberalised and the share price skyrocketed. For example, during the debt default and currency crisis of 1997 we were buying gazprom at between US$0.10 and US$0.15. This year the price has been to US$14 and currently sits around US$12. Not too many shares that you can get 100 bagger on. Huge risk, huge potential reward.

Sorry for the length of the post but wanted to give a little bit of background to my investing history.

I agree with Digger etc, seems that this market likes regular dividend payments and the share price reacts in a counter-intuitive way...up and instead of down when a dividend is paid.

[digger]

Thanks Gasprom1 for your first story.Naturally you will have many more.Is this Russian company not now the biggest oil company in the world,now that they have taken over most of Europe---a condition if they wanted supply.And what happen to that guy that used to run Gasprom that the russian sent to jail so he would sell to the govt.Not a nice place from what i have read.

[gazprom1]

The guy I think you are referring to Digger is Mikhail Khordorkovsky who used to control YUKOS. Shocking what the State did to his empire but he was not a particularly nice guy.

Gazprom has too much control of European gas supplies IMO. Russians can be volatile especially since Gazprom is State controlled. That is why NZ is a great place to invest when we as investors in NOG can have a voice that is heard.

Does anybody think that NOG could be raided/ taken over for its war-chest??

[digger]

Thanks for the support about dividends but i am complaining that so far all have missed the central point.What i was trying to stress is that if a SP rises many times on a dividend as it did on the last one it shows that the lack of income is suppressing the SP.Then a dividend sends up the SP by that much ,the market is saying it recognizing the base underliying value is higher. I used to invest in GPG that gave regular divs and for a time afterwards the SP went down.The market in this case is saying we know all about your underlieing value and the div just comes off the SP. So my certral point is that NZO should look at div as long as the market continues to also increase SP.Esentially i am neither for or against a div but say lets let the market decide,but am defitinatly against if it just comes off SP.

[bermuda]

Gazprom1.
Welcome to the site.
Miller, the Head of Gazprom is forecasting $US250/bbl for oil next year. These Russians know what they are talking about. Russian output is in decline.

[blockhead]

Gazprom1.
Welcome to the site.
Miller, the Head of Gazprom is forecasting $US250/bbl for oil next year. These Russians know what they are talking about. Russian output is in decline.


I hope the Ruskies are wrong, if it goes to $250 we are all doomed !

[bermuda]

I hope the Ruskies are wrong, if it goes to $250 we are all doomed !

That is why we have to conserve and then conserve again...and then stop breeding.

The growth in human population has a hugely strong correlation with oil consumption.

NZO well poised to benefit in a bear market.

[digger]

That is why we have to conserve and then conserve again...and then stop breeding.

The growth in human population has a hugely strong correlation with oil consumption.

NZO well poised to benefit in a bear market.

Bermuda post 5902 has declared not peak oil but peak NZO. The top is come and gone.Sorry but she is all down hill from here on.

[BigBob]

For anyone who has read Twilight in the Desert; you should also read The Last Oil Shock by David Strahan...

superbly written... puts everything into chilling perspective...

Check out http://www.lastoilshock.com/

Cheers
BigBob

[Corporate]

Ya can't complain much about an average of 35,000 Barrels at day since 1 July.


Up to 3 August: Approx 1.2 million barrels. NZOG's share of production approx 150,000 barrels.

[bermuda]

Bermuda post 5902 has declared not peak oil but peak NZO. The top is come and gone.Sorry but she is all down hill from here on.

I know it is all down hill from here and some of the guys dont know it.

That's why I made a recommendation to Vince about his competition that we have a Pick the DOW competition. The trouble is when I went to post it I think Vince had shut the site down. Which was a pity I think .

Yes, I agree, the DOW goes way below 10,000.

[trackers]

120 tested and found wanting...Bugger



Crude oil prices continue to fall

New 9:30AM Tuesday August 05, 2008


Oil prices fell below US$120 a barrel for a time in overnight trade as tropical storm Edouard skirted away from oil facilities in the Gulf of Mexico.
Crude is currently trading at US$121, down more than $3 a barrel on yesterday's close.
Falling demand in Europe and America and rising output by the world's top exporter Saudi Arabia are also being credited for the price drop.
In mid-July, oil prices reached a record US$147 a barrel.
- NEWSTALK ZB

[Drone]

120 tested and found wanting...Bugger

Dunno about that, false break perhaps, WTI closed above $121..

[Drone]

NZO back of envelope:

Cash net of debt: $280m approx
PRC Stake: $171m at market price

Current market cap $633m

So the market really is valuing the cashflow from Tui and the Kupe asset at around $180m!!

Why is someone not taking over this company? Am I missing something here?

Tui perhaps making $650k NZD profit a day...

I for one would pay $180m for that, in fact I would probably pay $400m for NZOGs Tui stake. But no the market values the Tui AND Kupe stake at $180m, just crazy.

The current price assumes a collapse in oil and coking coal prices in my opinion, like down to $80 USD and $150/ton respectively.

If prices/exchange rates stay close to where they are then the lucky owners of NZO/Pike are in cream.

Cheers

[Casa del Energia]

NZO back of envelope:

Cash net of debt: $280m approx
PRC Stake: $171m at market price

Current market cap $633m

So the market really is valuing the cashflow from Tui and the Kupe asset at around $180m!!

Why is someone not taking over this company? Am I missing something here?

Tui perhaps making $650k NZD profit a day...

I for one would pay $180m for that, in fact I would probably pay $400m for NZOGs Tui stake. But no the market values the Tui AND Kupe stake at $180m, just crazy.

The current price assumes a collapse in oil and coking coal prices in my opinion, like down to $80 USD and $150/ton respectively.

If prices/exchange rates stay close to where they are then the lucky owners of NZO/Pike are in cream.

Cheers

"Why is someone not taking over this company? Am I missing something here?"


I'm wondering as well.

(Interesting to watch the shareholding structure slowly changing over to the institutions now - and that may make take over easier)

[Hoop]

Drone quote "...Am I missing something here?...."

Yep....The worst global financial crisis since the 1930's or maybe worse...a rather hostile environment for everyone don't you think?

[Drone]

Drone quote "...Am I missing something here?...."

Yep....The worst global financial crisis since the 1930's or maybe worse...a rather hostile environment for an investor don't you think?

Without doubt, but there are plenty of unaffected individuals/firms that should/do have plenty of cash, a takeover of NZO would be more than self funding even done entirely with debt. This should be meat and drink for soverign wealth funds, private equity, even high net worth individuals.

Good deals will still get finance IMHO.

Private equity could break it up, get hands on the cash to repay purchase funding, sell the PRC stake to overseas steel maker (who are buying at the mo (http://asterisk.tmcnet.com/news/2008/07/22/3559253.htm), cash and prc sale would probably net $550m. On say a $800m takeover price ($2.05), that would leave $250m to be funded from Tui and Kupe cashflows, so maybe $30m/ year "cost". I think Tui and Kupe could look after that ok..... all this totally leaves out condieration of further tui/kupe upgrades, or the exploration rights/opportunities.

[Nitaa]

Yes the ripple effect from the subprime has gathered momentum. Stocks such as nzo although looks great great on face value poses a risk like most other companies. hence why nzo is trading at a significant discount.

take us back 2 years in time. someone said the $nz at usd0.73 and oil at $100 in august 2008, tui increased reserves by nearly double and produced 15mbo, pike almost penetrated to the happy zone and kupe going well then most of us would be extremely content. The only difference is oil at $120 at the mo.

Markets are very volatile but what a stella performance by nzo.

discl. hold

[Chalice]

Drone quote "...Am I missing something here?...."

Yep....The worst global financial crisis since the 1930's or maybe worse...a rather hostile environment for everyone don't you think?

Recently individuals and institutions took the opportunity to enter NZO at what could reasonably be seen as discount levels.

Both had a fair while to absorb the info out there + given the low entry point, most probably entered at, or toward, their maximum comfort level, including leveraging (see Leveraged Equities shareholding...)

Both did so to the tune of nearly $200 million - huge & outstanding but justified in a difficult environment.

As such I think the curent unreasonably low SP is a result of the fact there are not too many individuals/institutions out there who want to "get in" or increase holdings substantually as it can be reasonably assumed they are already in - and to the hilt.

In saying so I'm sure institutions don't kind cleaning up undervalued shares as disenfranchised individuals sell at below medium term value.

This, coupled with short term oil downside and uncertainty on NZO forward investment strategy (well the strategy has been spelt out), re-read as contracts, I'm not surprised.

Whilst slightly frustrating I think the current low SP is undoubtedly short term & I'm looking forward to the Kupe upgrade!

[Hoop]

Chalice
Energy producers all around the world are accumulating good revenue and are cash richer...but their share prices are also off their highs for the year, and are "perceived" now to be cheap. There seems to be a rather large risk premium built in these energy producing stock share prices at the moment for some reason.
NZO is no exemption....yes, local factors (exercised options) don't help.
I am not sure at what degree the local factors has influenced the NZO share price, or whether it is more to do with the shift of available money away from the Global energy sector market causing an overall lack of momentum everywhere incl NZO.


Drone
Personally, I think takeover activity just adds extra risk which could in the future turn out to be unwise... taking in the consideration of a worsening hostile economic environment. Bank loans to oil companies normally carry high risk status, and in this current environment those high risk loans could be expensive. E.g PPP example,,,and that was when credit was easy and in a less risk adverse environment.
There are many more worse options than money in the bank (safe?) earning 8 to 10% interest. Can't think of many better options at the moment..I have the feeling, neither can the NZO management.

[gazprom1]

Hoop,

I think your points are valid except perhaps in the case of PPP (and maybe others). If NOG could buy PPP for A$200 million (45% premium to current market and I have no idea whether or not this would be enough to be successful). Fund it through PPP's own cash (A$100 million) and NZ$125 million of NOG's cash. If PPP is netting in excess of A$400,000 per day then payback on T/O would be 500 days from Tui project alone. Obviously this more likely to be 600 - 700 days as the field production declines. Potential returns are very attractive IMHO and I would rather NOG invest in PPP than leave all their money in the bank. They would still have more than NZ$150 million in the bank and would have nearly doubled their daily revenue. Only requires one of the AA banks to go west and some of our money could be lost..highly unlikely though!

[boxburger]

This thought might well be absurd, but I'd be curious to hear the reasons as to why. Experienced oilers, why is the following idea unworthy of pursuit?

NZOG and our partners know the Taranaki Basin. Our knowledge extensive but far from complete. I think this knowledge separates us from our giant global competitors. Our ace up the sleeve.

There is a global shortage of exploratory rigs. "Get in the queue buddy, we'll ring you in 2 years."

I wonder if an investment in a crewed exploratory rig of our own is a feasible idea. Perhaps with a venture partner that has expertise in this area.

When it wasn't drilling NZOG holes I could the imagine demand for such a piece of professionally manned equipment being strong from other oil exploration companies in our relative neighbourhood.

[blockhead]

Even if it was a good idea (and I have my doubts) I am not sure how many built up ready to go rigs are lying around waiting to be sold, with or without a full crew.

Nope, leave drilling to the drillers finding and selling oil is the bizzo for NOG

[boxburger]

I've heard lots of wise and successful businessmen say "Stick to what you know."

A rig could be built from scratch.

A rig based in NZ capable of handling the Southern Ocean depths could fetch 'Top Dollar'

There is a shortage of experienced 'oil men' in the world.

As other business sectors go into decline, unemployment will rise. I believe a Government could be lobbied to provide a considerable subsidy towards training our thrill-seeking gutsy young men in the skills required to create well paid, secure, life-long careers for themselves. A successful Nat govt investment in the future of our boys with tattoos would make them look good.

I think people interested in oil exploration are curious by nature. I keep having this uncontrollable urge to visualise ways we can turn the Taranaki Bite into Swiss Cheese.

[Casa del Energia]

Iran tests a missile capable of sinking shipping in the Gulf, threatens to close it off if attacked which would make oil rival gold in price .... therefore NZO sp immediately plummets to 5 or 6c.

That makes about as much sense as a cat getting up on the podium at Crufts and saying 'I hate dogs - come and get me'.

Crazy times.

[duncan macgregor]

It would be the blind leading the blind just as it was in the building game leading up to the leaky homes problems. When you get a group of people how ever well intentioned trying to organise a complex problem like building a drilling rig making decisions about something they know nothing about, its a sure fire way to lose money. If for instance it was such a lucrative proposition there would be an abundance of drilling rigs. Get back to your school books teaching the kids what one and one make, and leave the big decisions to the people with the expertease to make the decisions. People like that stuffed up the building trade dont wish it on the oil industry. Macdunk

[AMR]

It seems to be a sector wide sellout. I never imagined BPT could touch $1 again, nor could AZA fall back to $1 so soon after a $1.50 bid.

All eyes on oil price tonight...today is either the bottom at 120 or the start of another secondary correction.

[boxburger]

It would be the blind leading the blind just as it was in the building game leading up to the leaky homes problems. When you get a group of people how ever well intentioned trying to organise a complex problem like building a drilling rig making decisions about something they know nothing about, its a sure fire way to lose money. If for instance it was such a lucrative proposition there would be an abundance of drilling rigs. Get back to your school books teaching the kids what one and one make, and leave the big decisions to the people with the expertease to make the decisions. People like that stuffed up the building trade dont wish it on the oil industry. Macdunk

Hi Macdunk,
Yes, I see the valid points you raise glaring at me.

I also thought about the building and commissioning of the Umuroa. A process that went true to plan and a purpose built vessel that has just proven itself in extreme conditions. I think NZOG's dabble in the oil/nautical field so far has been a success. I'm not suggesting they go it alone. OK, I'll shut my gob now, making the Milo and reading what you have to say.

[Chalice]

Chalice
Energy producers all around the world are accumulating good revenue and are cash richer...but their share prices are also off their highs for the year, and are "perceived" now to be cheap. There seems to be a rather large risk premium built in these energy producing stock share prices at the moment for some reason.
NZO is no exemption....yes, local factors (exercised options) don't help.
I am not sure at what degree the local factors has influenced the NZO share price, or whether it is more to do with the shift of available money away from the Global energy sector market causing an overall lack of momentum everywhere incl NZO.


Drone
Personally, I think takeover activity just adds extra risk which could in the future turn out to be unwise... taking in the consideration of a worsening hostile economic environment. Bank loans to oil companies normally carry high risk status, and in this current environment those high risk loans could be expensive. E.g PPP example,,,and that was when credit was easy and in a less risk adverse environment.
There are many more worse options than money in the bank (safe?) earning 8 to 10% interest. Can't think of many better options at the moment..I have the feeling, neither can the NZO management.

Hoop,

NZO has never really had a "high", a couple of spikes above 180 and fluffed around 170ish for a month with an equilibrium around 155-165 - the local market is saturated with NZO for the time being.
Given the fact that energy producers are "cheap"/risk factors built in wouldn't it be a great time to acquire? I didn't give NZO my money for it to sit in a bank a/c.

I disagree that NZO management can't think of better options - they are assessing them at present and for all we know doing due diligence /negotiations.

[duncan macgregor]

It seems to be a sector wide sellout. I never imagined BPT could touch $1 again, nor could AZA fall back to $1 so soon after a $1.50 bid.

All eyes on oil price tonight...today is either the bottom at 120 or the start of another secondary correction. C-MON AMR you are a chartist it is really simple to understand. I tried to tell NITA but HE is to much i am right you must be wrong attitude to learn anything. NZO crossed the 30 day moving average in the middle of march at roughly 124c giving me my buy signal. It then reached 162c and dropped to 153c which would have got you out with a tight stop loss. The next time it crossed the thirty day moving average was in june at about 158c it then went up to 185c getting you out with a stop loss at whatever level. The buy signal right now is at approx 165c. The point being rough mathematics included is you only need half a brain to beat the buy and hold for ever and a day types. Let us look at the share price in a realistic rational way over the last four years.
The sp was roughly 130c four years ago today its roughly 160 c plus a 5c divi plus a free option now worth 10c. That is a gain of 45c on an investment of 130c or roughly 35c over four years which is not even beating the bank in the most hyped up share in the NZX.
At least with the bank you reinvest the interest.
I know that i have pulled figures out to suit the arguement but you cant argue with facts which only proves that the brain dead are exactly that. The chartist is in a different position he neither loves or hates a company, only looking at numbers barking at the herd getting them to run, predicting there next move, preying on the weak, jumping in and out for the kill, where nothing matters other than the thrill of the drill [KILL]. I only hope that my mate NITA can come out the cupboard and prove me wrong with numbers for a change.
DISCL am out the market looking in. macdunk

[Nitaa]

Let us look at the share price in a realistic rational way over the last four years.
The sp was roughly 130c four years ago today its roughly 160 c plus a 5c divi plus a free option now worth 10c. That is a gain of 45c on an investment of 130c or roughly 35c over four years which is not even beating the bank in the most hyped up share in the NZX.
At least with the bank you reinvest the interest.
I know that i have pulled figures out to suit the arguement but you cant argue with facts which only proves that the brain dead are exactly that. The chartist is in a different position he neither loves or hates a company, only looking at numbers barking at the herd getting them to run, predicting there next move, preying on the weak, jumping in and out for the kill, where nothing matters other than the thrill of the drill [KILL]. I only hope that my mate NITA can come out the cupboard and prove me wrong with numbers for a change.
DISCL am out the market looking in. macdunk
Duncan this is why i love you so much.

Let us look at the share price in a realistic rational way over the last six years.
The sp was roughly 25c six years ago today its roughly 160 c plus a 5c divi plus a free option now worth 10c. That is a gain of $1.50 on an investment of 25c or roughly 5c over six years which is beating the bank in the most hyped up share in the NZX.
At least with the nzo you can reinvest the dividend.
I know that i have pulled figures out to suit the arguement but you cant argue with facts which only proves that the brain dead are exactly that. The fundamentalist is in a different position he neither loves or hates a company, only looking at numbers and fundamentals syphoning all the herd and getting them on the run, who cares what they are predicting there next move, preying on the weak, jumping in and out to be killed, where nothing matters other than the thrill of the drill [KILL]. I only hope that my mate DUNCAN can come out the cupboard and prove me wrong with numbers for a change.
DISCL am in the market looking out. nita

[duncan macgregor]

Duncan this is why i love you so much.

Let us look at the share price in a realistic rational way over the last six years.
The sp was roughly 25c six years ago today its roughly 160 c plus a 5c divi plus a free option now worth 10c. That is a gain of $1.50 on an investment of 25c or roughly 5c over six years which is beating the bank in the most hyped up share in the NZX.
At least with the nzo you can reinvest the dividend.
I know that i have pulled figures out to suit the arguement but you cant argue with facts which only proves that the brain dead are exactly that. The fundamentalist is in a different position he neither loves or hates a company, only looking at numbers and fundamentals syphoning all the herd and getting them on the run, who cares what they are predicting there next move, preying on the weak, jumping in and out to be killed, where nothing matters other than the thrill of the drill [KILL]. I only hope that my mate DUNCAN can come out the cupboard and prove me wrong with numbers for a change.
DISCL am in the market looking out. nita NITA you old darling what you have said is that NZO performed very well from 6years ago to four years ago, then the in hindsight you should have for the last four years stuck your money in the bank. The aussie banks would have been better, you would have about a 15% gain to add to that. Its not very good to tell everyone how clever you are when even the bank beats your investment. Macdunk bringing you back to earth as usual.

[Nitaa]

Duncan. The obvious choice for you rather than sitting on a pidley 5% interest after tax is to load the back, back it up, top up nzo when it hit low $1.00 this year, sell a few weeks ago when it hit $1.91 and voala. Easy peazy japanesey for the not so brain dead TA expert.

I dont have time to trade in and out, i do plenty of that in the evening to worry about why the charts proved me wrong. in not a chartist and dont care. I play on fundamentals and let the ta player such as yourself get mentally screwed, then you justify why yesterdays trading pattern went against you.

[boxburger]

Iran tests a missile capable of sinking shipping in the Gulf, threatens to close it off if attacked which would make oil rival gold in price .... therefore NZO sp immediately plummets to 5 or 6c.

That makes about as much sense as a cat getting up on the podium at Crufts and saying 'I hate dogs - come and get me'.

Crazy times.

Hi Casa,
Yes, crazy. I agree

I think it is a product of human nature. Something digger was referring to recently when he raised the subject about how poor we are at thoughtfully preparing for our futures. Humans seem to struggle with seeing past next pay day.

China's consumption has pulled back. The success of these games are so important to them on so many levels. The Yanks are having a think before running their tanks around the block for Big Macs. Iran is simmering. Stockpiles around the world are looking ok. The hurricane in the Mexican Gulf has calmed down. Global Strategic reserves are chocka. As far as the 'human animal' is concerned everything is Hunky Dory. We've got ten bucks in our top pocket.

Recall the kooky goings on in the US. The sub prime lending fiasco had to smack them around the head with a 4x2 before someone whispered 'uh oh'.

I'm not in this company to chase share price fluctuations. I'm in this company because I like to think I've taken a considered view of my long term future and I can see sense in backing things we need that we're running out of.

[zorba]

.

McD prophecies may yet roost apon the world and its bourses ..... witness today's widespread sell off commodities and oilers and miners, large and small ..... Dow to tumble down into the 10,000s or below !!

It p.isses me off to be a pessimist ...... those reckless "Fast Money" yanks and their totally shonky and fraudulent financial scams have a lot to answer for .....

In the meantime NZOG, imho NZO should keep its powder dry, keep its NZ$300m earning interest, and when oil is down below US$100 and the DOW is below 10,000, and oilers like PPP and TAP have tanked out and are trading at rediculously low prices because the Bears have wiped the bourses clean of investors .... then NOG with its war chest brimming with dollars should swoop in and take over the likes of PPP and TAP for a song !!

************************************************** **********

Believe it or not, those Yanks actually do have a "Fast Money" TV program -- really it should be called "Fast Down the Dunny Money"

http://www.cnbc.com/id/15838499

What the American Financial Culture needs is a rectal lobotomy, and the first thing they can unblock and send down the dunny are such TV programs !!!

Another spectacular example of monetory masticulation is the "Ahead of the Curve" lady who came on Nightly Business Report some months ago and told the world to continue buying up big on her recommendations, particularly because she had shuch good ahead of the curve vision.

The evening NBR show is full of US financial performance patsies !! I've not heard anything that is remotely hard hitting about what the US needs to do to stop the financial scams and the rot.

Z

.

[Hoop]

Hoop,

I think your points are valid except perhaps in the case of PPP (and maybe others). If NOG could buy PPP for A$200 million (45% premium to current market and I have no idea whether or not this would be enough to be successful). Fund it through PPP's own cash (A$100 million) and NZ$125 million of NOG's cash. If PPP is netting in excess of A$400,000 per day then payback on T/O would be 500 days from Tui project alone. Obviously this more likely to be 600 - 700 days as the field production declines. Potential returns are very attractive IMHO and I would rather NOG invest in PPP than leave all their money in the bank. They would still have more than NZ$150 million in the bank and would have nearly doubled their daily revenue. Only requires one of the AA banks to go west and some of our money could be lost..highly unlikely though!

Gazprom, Chalice

I didn't give NZO my money for it to sit in a bank a/c.

I disagree that NZO management can't think of better options - they are assessing them at present and for all we know doing due diligence /negotiations.
Maybe a bad wording from my post.. OK.. NZO probably can think of better options and some of those options are not available at the price NZO wish to pay for at this moment in time...and as you say Chalice there may be something brewing in the pipeline (pun) as we write.

The NZO management made it very clear in their Quarterly report
quote.." ""NZOG is on a very sound financial footing and we are focused on maximising value from our existing assets, as well as identifying attractive new investments", Chief Executive David Salisbury said. "This includes looking beyond New Zealand, as the opportunities currently available here are too few to confidently satisfy our growth targets". In the interim, the cash funds have been invested in short-term banking facilities with a number of S&P AA or better rated institutions. "We are not in the business of financial speculation with shareholder funds," David Salisbury said.

From this we can safely assume that the money is not going to be sitting in the bank or in some other financial instrument for the long term.
But note the wording ...DS does not specify the type of investment opportunity. Boxburger may be correct in thinking that NZO may be looking outside the square and sourcing common thread opportunities.
DS quote "....and we are focused on maximising value from our existing assets,..."

I personally think NZO are being financially responsible ....they are taking their time in evaluating ...that is a good move at the moment.

Back to PPP, Gazprom I bought PPP shares a while ago with a T/O in mind, PPP are very vulnerable..however I won't be selling my shares for anything less than 42NZCents I expect about 45c (35Acents)
35 x 588.6M shares = A$206M which is nearly spot on your figures.

Why NZO or others haven't raided PPP by now makes me wonder if NZO management and others may be seeing a questionable downside risk, maybe the current direction of oil prices may be worrying them, who knows. However from where I sit PPP T/O looks OK to me too, Gazprom, but it's obviously not OK with NZO otherwise they would've pounced by now.


So it seems buying PPP for A$205M now and getting A$100M cash now + A$255M Tui oil reserves net profit(after taxes,expenses,royalities,etc) later (assuming oil price Average US$120/b), less Maitlands future expenses less other bits and pieces?? ..isn't enough to make PPP an attractive T/O target for NZO....Hmmmmmm

There is always that possibility that PPP isn't on NZO's radar....that could signal NZO is looking at Common thread opportunities..."the Boxburger scenerio" :cool:

[bermuda]

Zorba.
Always knew you were bright. That is exactly ( unless they are gunning for PPP ) what I would do. Put it in the bank...and wait for the bargains.

[tricha]

NITA you old darling what you have said is that NZO performed very well from 6years ago to four years ago, then the in hindsight you should have for the last four years stuck your money in the bank. The aussie banks would have been better, you would have about a 15% gain to add to that. Its not very good to tell everyone how clever you are when even the bank beats your investment. Macdunk bringing you back to earth as usual.

dam i thought u still held PEM :rolleyes:

[Rabbi]

Price of Oil down again overnight and Oil and Gas stocks in freefall. Anybody like to speculate what sort of support level Oil might have. I wouldn't like to think it would be under a dollar, as some Companys- such as Beach petroleum- have closed of their hedge, on the basis that the Oil price will remain high. NZO SP doesn't look too bad compared to some of the others.
Nervous Nellies are closing out their positions, and stop loss orders appear to be getting executed, which is adding to the carnage.

Good buying opportunities for anyone cashed up!?;)

[duncan macgregor]

No worries lads the price of oil will hit $200 a barrel in 2009 crashing the market. Fill your gas tanks up and batten the hatches. Macdunk

[Chalice]

Hummm, looks like the number of people willing to give away their NZO shares has dryed up - 5 cent difference between buy & sell.

[Bob C]

Looks like a mexican stand-off. Bids at $1.55 and Offers at $1.60. Or is there a problem at the NZX - I see that ASB Securities are having technical problems?

Bob C

[Casa del Energia]

Hi Casa,
Yes, crazy. I agree

I think it is a product of human nature. Something digger was referring to recently when he raised the subject about how poor we are at thoughtfully preparing for our futures. Humans seem to struggle with seeing past next pay day.

China's consumption has pulled back. The success of these games are so important to them on so many levels. The Yanks are having a think before running their tanks around the block for Big Macs. Iran is simmering. Stockpiles around the world are looking ok. The hurricane in the Mexican Gulf has calmed down. Global Strategic reserves are chocka. As far as the 'human animal' is concerned everything is Hunky Dory. We've got ten bucks in our top pocket.

Recall the kooky goings on in the US. The sub prime lending fiasco had to smack them around the head with a 4x2 before someone whispered 'uh oh'.

I'm not in this company to chase share price fluctuations. I'm in this company because I like to think I've taken a considered view of my long term future and I can see sense in backing things we need that we're running out of.


Oh - totally agree on the 'backing things we're running out of'. (and where practical, the rest of my portfolio reflects that - (e.g Sanford = fish, remember the cod fishery). I'm not too concerned over the short term sp - NZO is a strategic investment - - just somewhat bemused by the price behaviour as of late.

And, agree humans are not very good at thinking more than two milliseconds into the future - I had adjusted my 'worldview' to that long ago - - but just lately, it is not just the 'usual' silliness - it is a madhouse.

(And....Back on subject - it looks like that long and deep buying pressure of the last week has subsided. - I have no prediction on what will happen now: too confused and befuddled these days)

[fish]

NZOG a takeover target: analyst

Neil Ritchie, New Zealand
Wednesday, 6 August 2008

WHILE most energy analysts are pondering how New Zealand Oil & Gas will spend some of its “sizeable war chest” of about $NZ280 million ($A222 million), McDouall Stuart has raised the possibility of NZOG being taken over by a larger corporation.



The Umuroa FPSO at the Tui Area oil project

In its latest report on NZOG, Wellington-based McDouall Stuart said NZOG’s significant discount to valuation, outstanding asset portfolio, cash-heavy balance sheet, open register and reserve upside potential were “key attractions to a potential suitor”.

However, potential suitors were not obvious, with the majors appearing to be resigned to a relatively passive upstream presence in New Zealand while Australia’s Origin Energy and Australian Worldwide Exploration are currently managing merger and acquisition activities elsewhere in their businesses.

McDouall Stuart added that while it appeared increasingly certain that NZOG would spend some of its “sizeable war chest” overseas, it was likely that NZOG would focus its resources primarily within NZ.

“While NZ opportunities may not currently be abundant, there is considerable scope to lean on existing domestic relationships. The Tui and Kupe JVs are each strong, and are led by field operators that appear increasingly committed to NZ.

“Travelling with the JVs to drill new prospects within existing licence areas would represent a continuation of NZOG’s already successful model.”

Rig availability appeared to be the biggest constraint, with early 2010 likely to be the earliest a rig could be secured for New Zealand.

However, McDouall Stuart added, international campaigns brought quite a different risk profile.

“Depending on the target geography, political and economic risks play a much greater role. NZOG’s strategy must show both purpose and balance.”

The broker also noted the offshore Taranaki, New Zealand Tui oil field was still “going like a Boeing”, and that the nearby $NZ1.1 billion ($A0.87 billion) Kupe gas-condensate field development was over 80% complete.

Tui continued to outperform all pre-commissioning projections, producing a total of 15.23 million barrels for the 12 months to July 30, at an average rate of 41,600 barrels per day.

However, deliverability was expected to continue to decline until early 2010 when the drilling of at least one new production well, Tui-4H, was scheduled to be completed.

Confirmation of the intention to increase the floating, production, storage and offtake vessel Umuroa’s liquids handling capability, from 120,000bpd to 150,000bpd, would also boost deliverability.

“We continue to be of the view that increasing the FPSO oil-stripping capacity will deliver significant value to the JV. Advancing Tui’s production profile and, therefore, cash flows could add as much as 15 percent to the value of the field.”

The broker also said that day-to-day running of the field had improved markedly over the past 12 months.

“Improved demulsifying has reduced water and sediment levels in Tui sales product, moving the quality differential in the JV’s favour … the FPSO has at times operated comfortably at 130,000 barrels per day.”

McDouall Stuart added that first production from Kupe was expected in early 2009, with full production likely in the second quarter.

The broker also said that a reserves upgrade appeared likely, with the partners, headed by operator Origin Energy, expected to make an announcement before the end of this year, given the success of the three-well development drilling campaign.

The three development wells flowed more than 115 million cubic feet a gas of gas and 16,000 barrels per day of condensate during initial production testing earlier this year.

Current Kupe 2P estimates are 253 petajoules of gas, 14.7 million barrels of condensate and 1.1 million tonnes of LPG.

NZOG shares were this morning trading on the Australian Securities Exchange for $A1.20-1.22 and on the New Zealand Exchange for $NZ1.55-1.59.

The Tui partners are operator AWE (42.5%), Mitsui E&P NZ (35%), NZOG (12.5%) and Pan Pacific Petroleum (10%).

The Kupe partners are operator Origin Energy (50%), Genesis Energy (31%), New Zealand Oil & Gas (15%), and Mitsui E&P NZ (4%).

Click here to read the rest of today's news stories.

[Casa del Energia]

NZOG a takeover target: analyst




Thanks for posting that - very informative. And it shows that the posters in this thread are pretty up to the mark - there had been chatter of takerover risk.

Need a cohort of bretheren of small holders to pledge into a 11% holdout?

[Sideshow Bob]

It's amazing how lower oil price + declining share price = considerable less number of posts.

Disc: Holder

[Drone]

Thanks for posting that - very informative. And it shows that the posters in this thread are pretty up to the mark - there had been chatter of takerover risk.

Need a cohort of bretheren of small holders to pledge into a 11% holdout?


Mate, with the way the market has been viewing this stock I think us small holders would be pretty pleased to see someone share the view of the real value in the company, an offer in the 2.00 - 2.20 range would go down pretty well I would think while still leaving a lot on the table for the buyer. Win win all round with the irrationality of current market pricing.

Cheers

[Paddie]

Mate, with the way the market has been viewing this stock I think us small holders would be pretty pleased to see someone share the view of the real value in the company, an offer in the 2.00 - 2.20 range would go down pretty well I would think while still leaving a lot on the table for the buyer. Win win all round with the irrationality of current market pricing.

Cheers


They would have my holding.

Paddie

[Mingeathinaikos]

They would have my holding.

Paddie

Mine too.....
And if the management don't come out with something that they will do with the monies they are holding, the market will have my holding at what ever price in 3 months.

[sideline]

Surely the bottom must be near, with so much negativity around.

Keep it up guys, errrr I mean down of course.....



Meanwhile from Bloomberg:

Commodity Prospects `Astoundingly' Good, Rogers Says (Update1)

By Jesse Riseborough

Aug. 6 (Bloomberg) -- Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said the fundamentals for commodities are ``astoundingly'' good.

The bull market for commodities ``has a long way to go,'' Rogers, 65, said today at an investor conference at the Gold Coast, Queensland, Australia. The bull market may end by 2020 based on historical cycles, he said.

The Reuters/Jefferies CRB Index had its biggest monthly decline in 28 years in July reversing course after its best first half in 35 years. Agricultural commodities and crude oil may fuel the rally for five more years as global supplies won't increase fast enough to meet demand, Pinpoint Investment Advisor Ltd. said last month.

``We are going to have plenty of setbacks in commodities but when they happen please keep your heads about you, do some more homework, and if you decide that thing is still OK I would suggest you might think about buying more commodities,'' Rogers said today.

Prices for copper, gold, iron ore and coal all rose to records this year on increased demand for raw materials from China and India.

``By the time we come to the end of the bull market commodities are going to be skyrocketing, they are going to be going through the roof, everybody is going to be investing in commodities,'' Rogers said.

The CRB index slid 10 percent in July, the most in any month since March 1980, when the U.S. economy was in a recession. Following that month the index then rose 30 percent through to the end of November 1980, setting a high that wouldn't be matched for the next 25 years.

[Casa del Energia]

Mate, with the way the market has been viewing this stock I think us small holders would be pretty pleased to see someone share the view of the real value in the company, an offer in the 2.00 - 2.20 range would go down pretty well I would think while still leaving a lot on the table for the buyer. Win win all round with the irrationality of current market pricing.

Cheers

Oh well - maybe it's just my knee jerk reaction - I've been squeezed out of Flet Engergy, Montana and Waste Management in the past and whilst I got bundles of cash - I still had to find a new home for it and remain diversified- - which on a small bourse like NZs - - not easy. And of course, someone else is getting the ongoing income from what are very good businesses.
- - And since they have all gone off overseas - it doesn't help our invisibles.

[Drone]

Oh well - maybe it's just my knee jerk reaction - I've been squeezed out of Flet Engergy, Montana and Waste Management in the past and whilst I got bundles of cash - I still had to find a new home for it and remain diversified- - which on a small bourse like NZs - - not easy. And of course, someone else is getting the ongoing income from what are very good businesses.
- - And since they have all gone off overseas - it doesn't help our invisibles.

Fair points all. Ideally the market would price these stocks "correctly" and we wouldn't have quite the big discrepancies that we have often seen between the value the market attaches to a widely held company vs what people are prepared to pay for control.

As an aside, while everyone talks about the falling price of oil not many people have been mentioning the NZD which is tanking, down 7% in the last 3 weeks alone, new lows this morning below 72c. Certainly will help to insulate NZO from "declining" crude prices, although 6 months ago I'm sure we would have been very happy with $127 tapis.

Cheers

[AMR]

The brokers might help. Check out the new NZO website. There are now 7 brokers covering NZO.

[Corporate]

The brokers might help. Check out the new NZO website. There are now 7 brokers covering NZO.

I just had a loook at this. It gives me the feeling that NZO are keen to get the shareprice moving!

[bk]

The brokers might help. Check out the new NZO website. There are now 7 brokers covering NZO.

So, 7 brokers value NZO with an average of $2.19, and the most pessimistic one still says $1.83

Is the market wrong, are the brokers wrong - why the disconnect?


Makes my expectation of $2 by year-end looking good though

[Casa del Energia]

So, 7 brokers value NZO with an average of $2.19, and the most pessimistic one still says $1.83

Is the market wrong, are the brokers wrong - why the disconnect?


Makes my expectation of $2 by year-end looking good though

Apparently no disconnect - I understand that the fund managers are dealing with loss of confidence and therefore many withdrawals - which forces them to sell. The options overhang has gone now but the funds just haven't got the cash to turn the market - by now there should have been institutes crawling over themselves to take a stake in NOG. This is general market malaise.
This means there is 'nothing wrong' with NZO (or other shares that are really cheap at the moment) - and since I personally don't answer to unit holders - my response it to raid every piggy bank in sight and pump it into this over cheap market - NZO included.

Fantastic opportunity for the brave, the savvy and the patient.

[Hoop]

So, 7 brokers value NZO with an average of $2.19, and the most pessimistic one still says $1.83

Is the market wrong, are the brokers wrong - why the disconnect?


Makes my expectation of $2 by year-end looking good though

Bear Market!!!

[JBmurc]

Bear Market!!!

It certainly is great buying optionality's round at the moment NZO an absolute ripper

[Phaedrus]

I know I recently posted a "Sell" signal for NZO, but let's get this current price "weakness" in perspective.

Until/unless NZO breaks below the current support level it is still in an uptrend. That's quite something in these trying times!

Sure, it has been making lower highs for the last few weeks and the OBV is falling but so long as the support holds, these facts mean little.

http://h1.ripway.com/Phaedrus/NZO88.gif

[pietrade]

Once again your charting skills are very much appreciated. Many thanks to you.

[Anubis]

Thanks Phaedrus. As we know a lot of shares were bought at $1.50 recently so this should create a strong level of support for the price in the near term. Personally I would not like to see it dip much more than $1.55 from here. If it breaks the $1.50 support this would - in my view - be a major sign of loss of investor confidence. Personally I am currently accumulating again, as long as it stays above $1.50.

[fish]

Thanks Phaedrus. As we know a lot of shares were bought at $1.50 recently so this should create a strong level of support for the price in the near term. Personally I would not like to see it dip much more than $1.55 from here. If it breaks the $1.50 support this would - in my view - be a major sign of loss of investor confidence. Personally I am currently accumulating again, as long as it stays above $1.50.

Has a lot of upside and very little downside so a good time to be accumulating .
Annual report at end of month will be excellent and will probably give the sp a boost-definately a dividend announcement would give the sp a big push
A lack of a dividend announcement could make nzo more vulnerable to a takeover offer-$300m in bank ,great cash flow,falling nz dollar plus ?disgruntled shareholders willing to sell cheaply .

[foodee]

Fish

Agree. Makeup of shareholders dermographics (as evidenced here)
will show different expectations-some look for pure growth, some
look for div and some look for both.
Certainly NZO will give itself no negativies by paying a div out of profits.
Even a 5 cents div would be nice - like it will fund 2 months fishing up
north!:)

P
Thanks for your chart again

cheers

[Mick100]

disgruntled shareholders willing to sell cheaply .

Where are all these disgruntled shareholders
I think the few disgruntled shareholders are all posting on this thread
My guess is that the vast majority of shareholders, including myself, are very happy with NZO's performance over the past 12 months

[Drone]

The NZDs sharp correction continues, 70.45ish now, very little support. Good news for NZO, Pike or any exporting stock.

US/NZ 2 year swap spread has declined over 50 points in the last month a trend that is likely to continue and drive the kiwi lower.

Currency movements have really worked out pretty well, I imagine that most of the large ticket items and expense for Kupe have now been paid for and were done when the kiwi was strong (a lot of USD bills needed to be paid in that time), now that the revenues from the 3 projects are coming or about to be coming in we are see a massive reversal, very good timing there! We should see mid 60s before too long, an almost 20% decline.

Excellent.

[fish]

Where are all these disgruntled shareholders
I think the few disgruntled shareholders are all posting on this thread
My guess is that the vast majority of shareholders, including myself, are very happy with NZO's performance over the past 12 months

Earnings performance has been and still is stellar.
Disgruntled shareholders because a reasonable proportion of profits are not being returned to shareholders -$300 million stashed away in various cash investments .
If the shareholders were happy this company would be trading at over $2 a share-and probably would be if a dividend was announced.
Disgruntled shareholders will be a large portion of those selling at under $1.60 this week-and no I dont believe they are posting on this thread-in the main we are very optimistic /realistic for the future of nzo

[Anubis]

How below 70 cents.

[upside_umop]

Now below 70 cents.

wow, awesome drop today...NZD that is.

i sold some nzo at 1.60 a couple days back...about 3/8's of my holding. i could see depth falling away. no point taking the impact of these little losses.. i believe we are seeing oil drop a little further. this will be the main sentiment drive for nzo, not so much the nzd. kupe gas is denominated in nzd long term contracts, but liquids are following global. pike seems to have lost its steam for a bit..will dabble for 1.50.

there is not much more in the pipeline that we havent heard of, nothing certain with whats happening with the cash, and until i hear more, i wont be back in for a bit..

if it gets below 1.50..ill be buying more again..i would hope that nzo management will be looking at sharebuybacks <1.50 if they cant find other uses for the monies that will generate the current return that is expected from the projects -> which at the moment roe is looking very high for the foreseeable future...

[QOH]

I certainly hope for one soon, at least it would help shareholder loyalty. GPG must have a big war chest building, and Ron has a long memory. If someone was to offer me $2 at the moment, I'd be out.

[croesus]

My pick is if the S/P drops to $1.48.... it could then rapidly drop to $1.35.... must be lots of holders who borrowed heavily to convert options.....

[boysy]

there must be some stop loss targets getting close if under 1-50 is tested it could all go down hill from there.

[Unicorn]

Certainly NZO will give itself no negativies by paying a div out of profits.
Even a 5 cents div would be nice - like it will fund 2 months fishing up
north!:)

Paying a dividend after raising funds, at a discount, is not a negative? Paying out money before the ongoing capital requirements have been determined is not a negative?

NZO has nearly $300M in the bank at a time when the world economy is very volatile. There will be opportunities to use that cash to advantage, but there is also significant opportunity for losses through ill-considered or ill-timed ventures.

It is time to relax and let the enormous Tui profits continue to accumulate, while the Kupe and Pike projects get ever closer to completion. Shareholder value is increasing at a great rate, as it has been for the last year or more.

Flooding the market with NZO shares has been very costly thus far for NZO shareholders. It will take time to recover, but eventually the market will see that assigning nil value to Kupe, and pricing Tui oil at $30 a barrel is not warranted.

[bermuda]

My pick is if the S/P drops to $1.48.... it could then rapidly drop to $1.35.... must be lots of holders who borrowed heavily to convert options.....

I would really be interested in your reasoning. As this world rapidly gets sucks into a black hole vortex it is companys like NZO that are the cream of the crop and stay at the crest and avoid getting sucked down into the mire.

The weak are selling now but the astute are buying. I doubt whether you could find such an outstanding stock as this anywhere in the world.

Liquid cream.

Almost making 0ne $1 MILLION per day. Far out.