NZ Oil & Gas (NZO)

[the machine]

[QUOTE=Nita;234180]
Question or views please. What do you think of nzo buying or partnering with the likes of awe, ppp etc into having their own off shore rig? Not sure what the cost is but if its within the reach then it would make a lot of sense especially if they want to make swiss cheese out of the taranaki and canterbury basin. In other words, why not look to buy or have a rig built for such a purpose. NZO if they arent already should look at both up and downstream opportunities.


a rig represents a huge investment, not only in the rig itself but all the infrastructure that supports it.

for an example of the "weather risk" see what happenned to the jack up that sheltered for 3 months before maari could start [expect rig owners foots the bill for that delay]

I say no way take that risk with a rig

M

[fish]

[QUOTE=Nita;234180]Maybe some or no one will agree with me here but with the price of oil continuing to fall it is making nzo look better and better. Sure it would have been nice to have another year of $100 plus oil prices but it isnt so. surely what must happen is consolidation where the weak dissapear or get gobbled up by the cash rich companies. The longer or further oil drops the less attractive the spec companies are. Lets not forget the cheaper oil rigs will become..

With the kiwi at 54 cents nzo is still achieving over $100 nz a barrel-look at the nzog website under Tui to see the latest prices achieved converted into nz-and also check out the phenomenal production figures.

NZO has made massive currency gains having invested in nz dollars

Interest rates are dropping .

If you look at the bigger picture(beyond the pain of the sp ) nzog couldnt be doing better-the current low oil price will assist them to buy assets /procure drills cheaply .

[blockhead]

An article to encourage those of us who weren't as clever as McDuck and still hold our NOGs. The message is, hang on and up they will go, just takes time.

UNSUSTAINABLE ENERGY TRENDS
by Byron King

I've been getting a lot of calls and e-mails from people asking about the falling prices for oil in recent weeks. The immediate explanation is that world economic activity is decelerating. Demand is falling. OPEC announced cuts in output. But the markets still believe that economic decline will trump the ability of OPEC to prop up the price of oil. Enjoy it while it lasts.

Just over the horizon, things are about to become dicey. This week, the International Energy Agency (IEA) will release a new report on the future of world energy. In its World Energy Outlook, the IEA will state categorically that "Current global trends in energy supply and consumption are patently unsustainable."

There's not much wiggle room in that statement. According to the IEA, despite the recent fall in oil prices, the medium- and long-term outlooks for energy supply are grim. Conventional oil output is destined to decline. Demand will still grow, however, especially in the developing world. And the twain shall only meet by prices rising to clear the market. "It is," as our Arab friends like to say, "written."

The IEA performed a comprehensive study of 800 of the world's largest oil fields. And it concluded that depletion in conventional oil fields is occurring at a rate in excess of 9% per year. (That's an average. We see depletion rates in excess of 15% in Mexico's Cantarell field, for example.) This means that absent large amounts of new drilling, new investment in enhanced recovery and new discoveries, the current worldwide oil output will decline by over 9% per year. And if it keeps going along this trend (there's no reason why it won't), the base of world oil output could conceivably dry up within seven-10 years.

Don't get me wrong. The world won't run out of oil in seven-10 years. That's not how it works. It's just that volumes of conventional oil are declining. The takeaway point is that the energy markets will tighten up, like a hangman's noose around the collective neck of the oil-consuming world. We might not quite realize it, but when it comes to oil, we are all walking that long green mile.

The investment angle for OI is that the companies that own oil reserves in the ground, and the oil service companies that extract oil and natural gas, should profit in the future. Yes, the portfolio is down. It has been a hard hit to everyone (me too) who bought into the market up until midsummer. We've all lived through a midsummer's nightmare on this one.

So how long will we have to wait for this "future" to show up? Well, how long will the current worldwide recession last? I don't know. But I do know that many energy companies in the OI portfolio are at long-term lows in share price. If you can afford to be patient with your funds, these firms should eventually stage a comeback as oil prices rise again. As I said above, "It is written."

Says who, you ask? Written by whom? Well, how about the IEA? According to the IEA, even with massive levels of investment in the oil patch, the best estimate is that the global oil industry can reduce the rate of depletion to perhaps the 6% range. So the world energy industry will have to run faster just to keep from falling too far behind the demand curves.

Again, you need to keep in mind that current energy prices are just too low to support the level of energy investment that the world needs going forward. (Meanwhile, the U.S. government is spending trillions of dollars forward just to bail out the banks and bankers, not one of whom runs pump jacks.)

The IEA estimates that the oil industry will have to invest over $350 billion per year to counter the steep rates of decline in output. And even that will not be sufficient to maintain levels of output for traditional forms of crude oil. Thus, much of the future investment will have to go toward extracting other kinds of hydrocarbon substances.

What do I mean by "other kinds" of hydrocarbon substances? Fortunately, there are many different kinds of hydrocarbon molecules out there. The total worldwide carbon base actually adds up to a very big number, and that is NOT including the carbon that is part of the current living biology of the planet. For now I'm just discussing the fossilized carbon like oil, natural gas, bitumen in tar sands, oil shale and coal.

The big problem for the nonoil forms of carbon is affordability. That is, are people willing to pay? It takes a lot of steel and technology to transform some kinds of carbon into something we want to use. We see that, for example, in the Canadian tar sands projects. Lots of steel, concrete, labor, machinery, water and energy input - all to extract this thick, gunky crud that has to be upgraded to something that looks like diesel fuel. And the whole thing emits lots of carbon dioxide (CO2) in the process, as well.

The other big problem is whether or not there is the political will to "do carbon." Will the governments of the world allow - let alone promote - industry to invest in the industrial base that will be required to transform the varying kinds of carbon into something that the world can use? Because the other side of this coin is ever-increasing CO2 emissions, global warming and climate change. The more carbon that gets burned, the more CO2 that goes up the flue and into the atmosphere. In essence, within about two centuries, mankind is undoing the geological work of tens of millions of years.

This is not a "global warming" article. But most nations of the developed world have governments that are more and buying into the global warming thesis more. The political gun sights are on carbon. But if we collectively decarbonize the economy, the energy supply will dry up and we'll wish for the "good old days" when we had to worry only about Wall Street crashing. And besides, try telling the developing world not to develop. People have fought wars over lesser issues.

Do you want some numbers on hydrocarbon resources? Here are estimates of the total hydrocarbon resources in the world and the relative costs to convert them. This is my summary, based on several different government and academic compilations:



These are big numbers, right? And they can supply a lot of energy over a long time, but only if the world collectively decides to utilize the resources. If not? Well, you had better own some gold too.

The stark assessment from the IEA described above comes just as much of the world's banking and finance system lies in ruins. Many forms of lending have dried up, and much of the former system of world commerce is just not functioning.

So the politicians, bankers and investors of the world - including us - have their work cut out.

Byron King
for The Daily Reckoning Australia

[digger]

Blockhead that report from Bryon King has been hanging around for a few days now.Lets hope everyone has read it now and if not it is now here on sharetrader.
What the report does not stress enough is that all the world has for oil is the amount that is in the pipeline and in existing low cost wells. At $50 there will be no more Canadian oil sands or deep sea drilling. Our own Cantabury basin is a waist of one million dollars unless the directors believe that future oil prices are to be much higher. So industrial civilisation will end unless one of two things happens.Either oil much rise to replacement costs or we quickly find a new energy source.
Demand destruction is competing head on with depletion and just for the moment demand destruction has the whip hand.
Digger

[bermuda]

Blockhead that report from Bryon King has been hanging around for a few days now.Lets hope everyone has read it now and if not it is now here on sharetrader.
What the report does not stress enough is that all the world has for oil is the amount that is in the pipeline and in existing low cost wells. At $50 there will be no more Canadian oil sands or deep sea drilling. Our own Cantabury basin is a waist of one million dollars unless the directors believe that future oil prices are to be much higher. So industrial civilisation will end unless one of two things happens.Either oil much rise to replacement costs or we quickly find a new energy source.
Demand destruction is competing head on with depletion and just for the moment demand destruction has the whip hand.
Digger

Yes Digger I agree. As Matt Simmons says

A 1-3% surplus in crude is a glut.

A 1% deficit is a catastrophe.

At the moment demand destruction is the clear winner. As long as we can conserve ( i.e.reduce our demand ) by more than 9.1% per annum then we wont have a problem. The 9.1% figure is the natural depletion per annum of the world's oilfields....assuming no investment is made in field additions.

We can do that for a while...perhaps 18 months...but in the end we will face the same problem over and over again ( the 1% deficit situation )

We were on a knife edge which has killed demand. ( Good old Greenspan and Bush )

[Nitaa]

In my opinion, what is happening to the markets is the worst possible scenario for the average country or person. Its not so much the markets falling but the volatility around it.

I had expressed concerned about the steep rise in commodity prices earlier this year as it destabilizes and breaks down the confidence of everyone except for some who are riding the wave at the time. The same thing is happening on the way down.

It is forseeable that the quicker the fall the quicker and over exagerated rise that will be placed on precious resources be it oil, food or otherwise. This may bode well for the likes of nzo in the future but i am extremely concerned about the ones who have to pay.

As far as oil running out there does seem to be big potential in the artic with russia epecially trying to stake its claim along with the like of Norway, Denmark, USA and a couple of others i think. This may be the next frontier as a race for untapped oil.

[arjay]

If a major discovery in the Arctic was made tomorrow we'd probably be waiting till at least 2020 for it to come on stream. As it is, it will probably be quite a few years before any drilling gets started, so any benefits will arrive well down the oil supply decline curve.

NZO has done well with their timing - Paying off Tui development during high price oil means the price of oil can go a long way lower before Tui stops being profitable. I wonder how Maari will fare if low prices are sustained though it's first year of production?

[sideline]

....................
At the moment demand destruction is the clear winner. As long as we can conserve ( i.e.reduce our demand ) by more than 9.1% per annum then we wont have a problem. The 9.1% figure is the natural depletion per annum of the world's oilfields....assuming no investment is made in field additions.

We can do that for a while...perhaps 18 months...but in the end we will face the same problem over and over again ( the 1% deficit situation )

We were on a knife edge which has killed demand. ( Good old Greenspan and Bush )

I doubt that the current price has much to do with supply and demand - it looks more like
a market overreaction (the equivalent but opposite effect to the bubble that drove the price to
147-odd US$ at it's peak).
When looking medium term (say next year) the expectation for the world economy are for
much slower GROWTH (for example Fitch expect 1%), but still GROWTH. 1% growth may be optimistic,
but nobody expects a worldwide 9% slump.
(In fact China are now expected next year to GROW by ONLY 9%).

How could there be growth or even standstill in the world economy if oil availability dropped
by 9%. It just doesn't add up.

[the machine]

whats the story with tr selling some shares as per asx announement?

M

[friedegg]

whats the story with tr selling some shares as per asx announement?

M
looks like he got some and then sold most of them to some mate

[blockhead]

More reassurance for us not as clever as McDuck

The case for buying oil stocks
Investor Daily: Even with gas prices in free fall and the global economy sputtering, now may be the time to bulk up on oil shares (if you dare).
By Brian O'Keefe, senior editor
Last Updated: November 21, 2008: 7:26 AM ET





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NEW YORK (Fortune) -- Last week, the Paris-based International Energy Agency released its World Energy Outlook 2008 - a 578-page book full of future supply, demand, and price estimates which this year also included an eagerly-awaited study of 800 of the world's largest oil fields.

Here's the executive summary: Buy oil stocks.

Considering that the price of oil has plummeted from $147 a barrel in early July to below $50 and that the global economic slowdown is putting a major damper on demand, that might not seem like such a good idea. But as the IEA study makes clear, the long-term supply and demand picture for oil continues to favor higher prices. Maybe much higher.

The report estimates that energy demand will grow 1.6% a year on average through 2030, for a total increase of 45%. To meet that demand, daily oil production will need to rise from today's level of 85 million barrels to 106 million barrels. The study found high and rising depletion rates at existing oil fields that will make it increasingly hard for new supplies to keep pace. So, the IEA says, the world needs to invest some $26 trillion over the next couple of decades in infrastructure and exploration.

"Given what we know about the decline rates, just to stay flat [in global oil production] we'd have to add the equivalent of four Saudi Arabias between now and 2030," said Matt Simmons, chairman of Houston energy investment bank Simmons & Co. International and author of Twilight in the Desert, the 2005 book that argues that even oil-rich Saudi Arabia's petroleum production might have peaked. "It's a very, very scary study. It's hard to argue with the data and it's ghastly what the data says."

Over the next seven years, the IEA predicts that the price of oil will average $100 a barrel, and rise to more than $110 by 2030. "The era of cheap oil is over," Nobuo Tanaka, the IEA executive director, told reporters at a press conference in London.

If Tanaka is right, the vicious sell-off in the equity markets over the past couple of months makes this a historically good entry point for investors looking to grab oil-industry bargains.

[arjay]

A dilemma is wether to hold NZO, or sell NZO to buy into current better bargains.

[the machine]

Crude Oil Traders Reposition for Price Rise, CFTC Data Shows

By Dan Stets

Nov. 21 (Bloomberg) -- Hedge-fund managers and other large speculators reversed from a net-short position to a net-long position in New York crude-oil futures in the week ended Nov. 18, according to U.S. Commodity Futures Trading Commission data.

Each Friday the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators' positions because such transactions can reflect an expectation of a change in prices.

Last Updated: November 21, 2008 15:36 EST

[Lion]

Oil demand growing 1.6% p.a. and supply falling 9% p.a. according to the IEA (who admittedly don't have a great track record in forecasting) yet they predict average oil price over the next 7 years of just $100 a barrel.

Well, forecasting can be tricky, (especially when it's about the future, as someone said) but that just seems way out of whack to me. Recall that Matt Simmons quote of yours, Bermuda,

A 1-3% surplus in crude is a glut.
A 1% deficit is a catastrophe.

[Rabbi]

A dilemma is wether to hold NZO, or sell NZO to buy into current better bargains.

I'm thinking the same.

There are some Aussie juniors that are ridiculously cheap. I particularly like OEL and BOW.;)

[Nitaa]

Just a word of caution. "Some of these shares are cheap" Compared to what? I havent looked into the shares just mentioned like BOW etc. However caution needs to be applied. The landscape has changed dramatically. There are many companies with loads of potential but that is how far they will go. Unless commodity prices rebound quickly these companies will not be around or be taken over by companies with cash.

We are entering into uncharted waters with the financial meltown so no matter how good companies appear on paper if the financial institutions break down the ripple effect will and is already tremendous.

If the commodity prices rebound then i especially like BHP and some of the other big aus companies. Rio is another.

NZO for that matter will be in a strong position. I love the other 2 Tui JV partners in PPP and AWE. PPP is fairly well documented but again i throw caution.

[Dr_Who]

Oil demand growing 1.6% p.a. and supply falling 9% p.a. according to the IEA (who admittedly don't have a great track record in forecasting) yet they predict average oil price over the next 7 years of just $100 a barrel.

Well, forecasting can be tricky, (especially when it's about the future, as someone said) but that just seems way out of whack to me. Recall that Matt Simmons quote of yours, Bermuda,

A 1-3% surplus in crude is a glut.
A 1% deficit is a catastrophe.

I am just wondering if we are getting the same effect as when oil prices was around $150bbl. Traders and hedge funds maybe shorting the living daylights out of oil depressing the price creating a de-leveraging bubble. The opposite effect of a commodity bubble.

[sideline]

I am just wondering if we are getting the same effect as when oil prices was around $150bbl. Traders and hedge funds maybe shorting the living daylights out of oil depressing the price creating a de-leveraging bubble. The opposite effect of a commodity bubble.

Exactly my thoughts, Doc.

[Dr_Who]

I ve done some numbers to compare NZO to PPP. The reason I ve compare these two is due to the fact they both have similar shareholding in Tui.

PPP.... sp 19 cents.... net cash 25-30 cents (depending on exchange rate)
=> PPP is trading 42% BELOW net cash holding

NZO... sp $1.17 .... net cash + PRC 80 cents = 75-80 cents
=> NZO is trading 34% ABOVE net cash and PRC holding

To me PPP seems to be the better value out of these two.

[shasta]

I ve done some numbers to compare NZO to PPP. The reason I ve compare these two is due to the fact they both have similar shareholding in Tui.

PPP.... sp 19 cents.... net cash 25-30 cents (depending on exchange rate)
=> PPP is trading 42% BELOW net cash holding

NZO... sp $1.17 .... net cash + PRC 80 cents = 75-80 cents
=> NZO is trading 34% ABOVE net cash and PRC holding

To me PPP seems to be the value out of these two.

Remembering of course Kupe was twice the size of the tui project before any of the upgrades...

[boysy]

do people honestly belive that NZO is currently a better deal than PPP at this point in time ?

[shasta]

do people honestly belive that NZO is currently a better deal than PPP at this point in time ?

Yes i do, because NZO has the Kupe project coming onboard around the same time the water cut is expected to increase, & therefore the oil per day is expected to drop off.

I see you hold PPP, so you may be bias towards a cash box with little else.

Disc: Have held both NZO & PPP before

[Bixbite]

.
According to the Chief Executive’s address to NZOG 2008 AGM on 29 October 2008 - “…. Remaining Kupe development cost expected be around NZ$35 million.”

This means the Kupe development cost approximately NZ$90 million has been paid advance already.
.

[upside_umop]

Remembering of course Kupe was twice the size of the tui project before any of the upgrades...

I believe Tui has been very valuable to NZOG and probably more valuable than Kupe will be. Remembering that a lot of Kupe BOE are contract gas prices which are lower than oil prices comparably.

Kupe will have cost NZOG around $200 million by the time it comes on stream, and thats not taking into account TVM.

Tui cost around $30 million and was done in 2 years from FID.

Kupe upgrades? Why does every one think this is a given? The latest pre-production flow tests narrowed the range with a higher P10 but lower P90. P50 was unchanged.

There is however, as everybody knows, the potential for other tie-ins. Momoho + potential prospects may deliver results.

I don't think KUPE will have the same reserve upgrades on its original structure as TUI has had....but I could be wrong - maybe a reservoir expert is lurking about? In saying that, the production station can handle 3 times more flow than from the KUPE field which leaves you feeling this JV is reasonably confident that other tie-ins will result.

I myself like PPP better than NZOG at these prices...and am in the process of selling the rest of my NZOG for cash and maybe more PPP on the down days...

There is still the 'pub talk' of how big Tui could eventually be with potential tie-ins from prospects (AWE have said Kahu-Stratgraphic could be 'Tui' size...I'm not sure whether thats Tui individual of Pateke etc but still...thats only 1 from 5 drill targets...) And with PPP having more leverage to Tui...it will be bigger for them.

With the downside of PRC yet to set into NZO sp fully, I'm betting over the next couple of years PPP will outperform NZO. Want to take it up with me shasta?

[BigBob]

With the downside of PRC yet to set into NZO sp fully, I'm betting over the next couple of years PPP will outperform NZO. Want to take it up with me shasta?

Don't forget that NZO never reallly took part in the run up when PRC hit 200+.... I think that the current PRC SP is indeed factored into NZO.... any PRC upside now & it might be a different story (and I think PRC has just about bottomed out too)...

[shasta]

I believe Tui has been very valuable to NZOG and probably more valuable than Kupe will be. Remembering that a lot of Kupe BOE are contract gas prices which are lower than oil prices comparably.

Kupe will have cost NZOG around $200 million by the time it comes on stream, and thats not taking into account TVM.

Tui cost around $30 million and was done in 2 years from FID.

Kupe upgrades? Why does every one think this is a given? The latest pre-production flow tests narrowed the range with a higher P10 but lower P90. P50 was unchanged.

There is however, as everybody knows, the potential for other tie-ins. Momoho + potential prospects may deliver results.

I don't think KUPE will have the same reserve upgrades on its original structure as TUI has had....but I could be wrong - maybe a reservoir expert is lurking about? In saying that, the production station can handle 3 times more flow than from the KUPE field which leaves you feeling this JV is reasonably confident that other tie-ins will result.

I myself like PPP better than NZOG at these prices...and am in the process of selling the rest of my NZOG for cash and maybe more PPP on the down days...

There is still the 'pub talk' of how big Tui could eventually be with potential tie-ins from prospects (AWE have said Kahu-Stratgraphic could be 'Tui' size...I'm not sure whether thats Tui individual of Pateke etc but still...thats only 1 from 5 drill targets...) And with PPP having more leverage to Tui...it will be bigger for them.

With the downside of PRC yet to set into NZO sp fully, I'm betting over the next couple of years PPP will outperform NZO. Want to take it up with me shasta?

I hope you read what i meant, that was when Tui was originally a 27.1mmbo P2 project, "at that time" the Kupe project was projected to be twice the size (revenue wise), Tui upgrades & coming online with high oil prices has increased the returns from the Tui project.

I have no idea as to any upgrades re Kupe, at a guess i'd assume the costs will rise another 10% before it's into production.

If you want to take PPP on a bet, i'll take OEL instead of NZO :D

Disc: I've held all 3 & know them pretty well

[upside_umop]

Yeah your right..it is hard to determine isnt it..

When you look at the two graphs they have followed each other - this shows the correlation of the two stocks being in energy but also the flow on effects from the holding in PRC?

I guess what I was trying to say originally is...the NTA backing per share of NZO is cash + PRC and as doctor says is about 75-80 cents per share.

We can see its quite obvious from the asx thread that NTA holdings in the form of equity holdings in other companies will get discounted more than cash holdings...perhaps as low as half its market value. Therefore its possible in this market (not the old market) that PRC could be even further discounted....

PPP is unusual in this respect as its a reasonable size company with a lot more cash than market cap. This isnt the same with other companies...(a poster did put up a list, but they are all predominately miners which are actually cashflow negative from operations)...Marginal cost of tui oil is still about $10 USD a barrel...

Who would have thought, but PPP will actually be benefiting from their original hedge of $52 usd!

[upside_umop]

I hope you read what i meant, that was when Tui was originally a 27.1mmbo P2 project, "at that time" the Kupe project was projected to be twice the size (revenue wise), Tui upgrades & coming online with high oil prices has increased the returns from the Tui project.

I have no idea as to any upgrades re Kupe, at a guess i'd assume the costs will rise another 10% before it's into production.

If you want to take PPP on a bet, i'll take OEL instead of NZO :D

Disc: I've held all 3 & know them pretty well

I get what you meant...you were meaning kupe being upgraded to give a better return than tui has. I cant see a 100% increase with what they have said...and its operating cash which is the all important, not the size and not the revenue ;)

Yeah, I've seen OEL...and they 'could' strike it big. But this is about PPP and NZO. C'mon back it up ;)

[shasta]

I get what you meant...you were meaning kupe being upgraded to give a better return than tui has. I cant see a 100% increase with what they have said...and its operating cash which is the all important, not the size and not the revenue ;)

Yeah, I've seen OEL...and they 'could' strike it big. But this is about PPP and NZO. C'mon back it up ;)

I meant Tui's upgrades & higher oil prices received to date, has meant the project is closer in size to Kupe. (Originally Kupe was to be twice the size, ie before Tui upgrades)

Ok, i'll back up my reasons for my original claim that "NZO" was better than PPP, & yes i'll stick with it*.;)

NZO didn't re-rate when first oil came to the extent we all thought, probably with AED in mind (any delays or production downgrades, & the SP gets smashed as institutions price in good news in advance).

NZO then paid a dividend & gave the market an indication of what it would look to do with it's cashflows (pay off Tui, pay down Kupe & potentially "assist" Pike River, as well as more exploration around Taranaki)

When the market caught wind of all this the SP started to appreciate, & even though i'm against O&G companies paying dividends, NZO has institutional support & thus they want a steady dividend stream.

Many on this thread were happy to receive back 5c per share, strangely after paying $1.50 to convert the options! (Since received another 5c)

Point being anyone can run a "cash box" & the market wants to see what PPP intends on doing with the cash, & i'm afraid the SP won't take off until the market knows what direction PPP is taking, & that they like it.

I'm all for Mgmt/Directors having a decent stake in the company, but to my mind PPP is run more like a private company, & the top brass are getting paid salaries & receiving options knowing they can't be taken out without them selling/merging into either a friendly bid, or a decent premium if hostile.

Where's the growth coming over the next 2 years for PPP?

With NZO we know Tui will still be ticking along nicely, Kupe will come into production, & Pike River will be in full swing & NZO may well realise it's holding "at the right price". There's always the exploration upside, in & around Kupe that can be tied back in as well.

* Now my health is sorted & i've now secured my next contract, i'll be attending the Auckland/Christchurch meetings next year, good opportunity to discuss the merits of NZO/PPP over a beer or two :D

(As a side issue OEL is roughly the same SP/Market Cap as PPP!)

[777]

Something is up. A buyer just came in with a bid for 250,000 at 1.32 after a 10% plus increase today.

Macdunk perhaps?

A strong close which is nice for a change.

[Dr_Who]

Something is up. A buyer just came in with a bid for 250,000 at 1.32 after a 10% plus increase today.

Macdunk perhaps?

A strong close which is nice for a change.

I am also wondering whats up?

Maybe it is just short covering?

[777]

A trade of 2.9m at 1703 is significant in some way. Just what I can't figure.

[blockhead]

Nearly 6M for the day, support for both NOG and PRC, mmmn don't think thats just a good days trading, summats up !

[sideline]

A trade of 2.9m at 1703 is significant in some way. Just what I can't figure.

Cullen fund buying in preparation for the 40% local quota?

[777]

Maybe that fund needs a name change now.

[digger]

Something is up---well maybe,but then there are about 200 reasons why the SP should be a lot higher anyways so maybe nothing company wise is up. What i would say is that the current SP is high now relative to the price of oil.To have a $1-34 with oil at US 54 makes you think this company has a lot of upside left. Eventually the world will work out that new projects for future oil supply is a long way short of future demand,although in the very short current moment supply is greater than demand.This situation will not last for long and the tide will turn.
Digger

[Sideshow Bob]

Has BRICKS launched a takeover attempt??

[Dr_Who]

Has BRICKS launched a takeover attempt??

HAHA... Na mate, BRICKS is too busy with T/O of PPG.

[friedegg]

well we can only wish that this buyer wants a lot more

[Nitaa]

I was delighted to see a smiley day today. I wont kid myself to think there wont be any more dramtic falls left as i am sure the volatility will stay around for some time.

My first throughts with regards to the volume going through is TR selling to buy into PPP. other seller could be ACC i guess. Who the buyer is? May be digger who is slowly accumulating to take over the co at a good discount by years end.

The news from the US was extremely positive with regards to propping up these gigantic countries. I cant help but think that in 10 or 20 years time the US will get taken over by saudi Arabia at this rate. The stimulus package is going to be huge and will end up into the trillions of dollars. The next couple of quaterly results from the large corps will scare the living daylights out of investors as well imo.

Intersting to note that India is still steeming ahead and although China is expected to slow it is likely to be around the 6 to 7% growth.

summary. Oil is still a good place to be if you own stocks with excellent balance sheets

[upside_umop]

I meant Tui's upgrades & higher oil prices received to date, has meant the project is closer in size to Kupe. (Originally Kupe was to be twice the size, ie before Tui upgrades)

Ok, i'll back up my reasons for my original claim that "NZO" was better than PPP, & yes i'll stick with it*.;)

NZO didn't re-rate when first oil came to the extent we all thought, probably with AED in mind (any delays or production downgrades, & the SP gets smashed as institutions price in good news in advance).

NZO then paid a dividend & gave the market an indication of what it would look to do with it's cashflows (pay off Tui, pay down Kupe & potentially "assist" Pike River, as well as more exploration around Taranaki)

When the market caught wind of all this the SP started to appreciate, & even though i'm against O&G companies paying dividends, NZO has institutional support & thus they want a steady dividend stream.

Many on this thread were happy to receive back 5c per share, strangely after paying $1.50 to convert the options! (Since received another 5c)

Point being anyone can run a "cash box" & the market wants to see what PPP intends on doing with the cash, & i'm afraid the SP won't take off until the market knows what direction PPP is taking, & that they like it.

I'm all for Mgmt/Directors having a decent stake in the company, but to my mind PPP is run more like a private company, & the top brass are getting paid salaries & receiving options knowing they can't be taken out without them selling/merging into either a friendly bid, or a decent premium if hostile.

Where's the growth coming over the next 2 years for PPP?

With NZO we know Tui will still be ticking along nicely, Kupe will come into production, & Pike River will be in full swing & NZO may well realise it's holding "at the right price". There's always the exploration upside, in & around Kupe that can be tied back in as well.

* Now my health is sorted & i've now secured my next contract, i'll be attending the Auckland/Christchurch meetings next year, good opportunity to discuss the merits of NZO/PPP over a beer or two :D

(As a side issue OEL is roughly the same SP/Market Cap as PPP!)

I'll reply in the same order.

Yes Kupe was twice as big as Tui was originally....but Tui is liquids rich which is worth more.

NZO didn't re-rate because of the first of the subprime crisis and the all important hector drill. I wouldn't go so far to say institutions price in 'good news,' only expected news. You probably won't get institutions dumping the stock either around the bad times that quickly? They're far too big players to do that with a small relatively illiquid stock like NZO. (not today!)

NZO paid a dividend...the market liked it - true. So is that not already priced in to the shareprice? Ie 'Bird in hand theory' - Investors like tangible returns.

Only institutional support is ACC?

Yep, people converted at $1.50 as price was still above exercise price...but things were getting volatile.

PPP have direction. Management have stated they are screening out opportunities etc etc...actually, I think that the paragraph they used is almost exactly the same as what NZO used? Pretty similar direction dont you think...

No options are outstanding to directors/management as far as I'm aware. Total key personell salaries for the year was $500,000. D.S. made more than this including his options....yes one man in NZO made more than all of PPP staff + directors...

I dont mind directors holding on for a bit...'someone' will make an attack because it will just get unbearable to watch!

Growth for PPP? Pretty much the same permits as NZO less Canterbury and Kupe area permits.

Tui expansion will be the biggest driver...

Maitland but I understand thats starting to fall off the radar, however it will be reasonably cheap to tie-in to existing pipes running close. 2P estimates between 160-320pj but not accurate enough to proceed.

Acquisitions + farm-ins. PPP have said like NZO that they are being offered opportunities everyday but are screening them throughly. I wouldnt be surprised if PPP buy into Canterbury permit with NZO. 40% is a relatively large chunk....

Management are also very astute...you will know they made about 10's of millions in exchange rate gains. Part of this strategy was to hedge oil price and part to hedge development/operating USD denominated costs. NZO also made some gains...but as far as I'm aware not nearly as much as PPP.

So in my opinion....PPP have similar direction to NZO but just not quite the diversified base that NZO currently has.

But yeah, be good to meet and chat over a 'few' beers. So a beer on PPP v NZO? You've already got a head start?

I sold half my remaining NZO today at close...$1.34. But there was some seriously large volume there! Maybe it was a special crossing?

Oh...OEL may have similar SP but PPP could almost buy OEL two times over with its LITTLE cash pile (at market price...i dont actually know what would get s/h to sell...) :rolleyes:

[shasta]

I'll reply in the same order.

Yes Kupe was twice as big as Tui was originally....but Tui is liquids rich which is worth more.

NZO didn't re-rate because of the first of the subprime crisis and the all important hector drill. I wouldn't go so far to say institutions price in 'good news,' only expected news. You probably won't get institutions dumping the stock either around the bad times that quickly? They're far too big players to do that with a small relatively illiquid stock like NZO. (not today!)

NZO paid a dividend...the market liked it - true. So is that not already priced in to the shareprice? Ie 'Bird in hand theory' - Investors like tangible returns.

Only institutional support is ACC?

Yep, people converted at $1.50 as price was still above exercise price...but things were getting volatile.

PPP have direction. Management have stated they are screening out opportunities etc etc...actually, I think that the paragraph they used is almost exactly the same as what NZO used? Pretty similar direction dont you think...

No options are outstanding to directors/management as far as I'm aware. Total key personell salaries for the year was $500,000. D.S. made more than this including his options....yes one man in NZO made more than all of PPP staff + directors...

I dont mind directors holding on for a bit...'someone' will make an attack because it will just get unbearable to watch!

Growth for PPP? Pretty much the same permits as NZO less Canterbury and Kupe area permits.

Tui expansion will be the biggest driver...

Maitland but I understand thats starting to fall off the radar, however it will be reasonably cheap to tie-in to existing pipes running close. 2P estimates between 160-320pj but not accurate enough to proceed.

Acquisitions + farm-ins. PPP have said like NZO that they are being offered opportunities everyday but are screening them throughly. I wouldnt be surprised if PPP buy into Canterbury permit with NZO. 40% is a relatively large chunk....

Management are also very astute...you will know they made about 10's of millions in exchange rate gains. Part of this strategy was to hedge oil price and part to hedge development/operating USD denominated costs. NZO also made some gains...but as far as I'm aware not nearly as much as PPP.

So in my opinion....PPP have similar direction to NZO but just not quite the diversified base that NZO currently has.

But yeah, be good to meet and chat over a 'few' beers. So a beer on PPP v NZO? You've already got a head start?

I sold half my remaining NZO today at close...$1.34. But there was some seriously large volume there! Maybe it was a special crossing?

Oh...OEL may have similar SP but PPP could almost buy OEL two times over with its LITTLE cash pile (at market price...i dont actually know what would get s/h to sell...) :rolleyes:

NZO is a much bigger company & therefore the Mgmt probably deserve more, especially as it was a 3 project company before offloading PRC.

NZO came out & said they want to increase annual production to 2 mmbo & are targeting reserves of 25 mmbo, be nice if PPP did the same?

Had OEL got Calacuit online during Q4 2008 as expected, it would have had production in the Phillipines of 15,000 bopd...

Refer OEL thread, but it's reserves are worth far more than PPP!

I'll keep the bet though, I'll take NZO, & you stick with PPP :D

[the machine]

hopefully some positive greater tui drilling firming up for the awe agm on thursday

maybe awe bought 6m nzo today [sorry got carried away]

m

[Mr Tommy]

the movie shown at the AGM is available....

http://www.nzog.net/tuimovie

[AMR]

The On Balance Volume chart is showing some accumulation. That 6M day is the big step circled in green. Still in a downtrend until a close above 1.34.
http://www.sharetrader.co.nz/picture.php?albumid=5&pictureid=72

[the machine]

nzo have rejigged the tui production page to display both total production and since July 1st

Production Performance

FY2009 - Oil Production since 1 July 2008:

1 July - 30 November: Approx 4.9 million barrels. NZOG's share of production approximately 610,000 barrels.

Total Production since start-up:

Tui production began on 30 July 2007. Total production to 30 November 2008 is approximately 19.1 million barrels. NZOG's share of total production is approximately 2.4 million barrels.



M

[Sumnerned]

From Bloomberg:
Oil prices may fall more as world growth slows, Fatih Birol, the IEA’s chief economist in Paris, said in an interview Nov. 27.

“The main determinant will be how the global economy performs,” Birol said. “If the economy continues to slow, this will put downward pressure on demand and also have an impact on prices.”

OPEC reduced its quota 11 percent in the year through March 1999 to battle falling prices, according to data on the group’s Web site. Its decision in October to cut removed less than half that amount from the market.

By June 2000, the cartel’s quota was almost 25 percent lower than the 27.5 million-barrel limit agreed to in the three months from January 1998 through March 1998.

While New York-based Merrill Lynch predicts a recovery in the second half, with 2009 prices averaging $50 a barrel, Barclays Plc says crude will trade at $72.10 next quarter and average $100.50 for 2009, according to a report Nov. 21."

[rotweiller]

"Savannah" is back in Tasman Bay awaiting loading at Umuroa on Dec 4th.
"Ensco 56" along with 2 support vessels is anchored in Admiralty Bay - Marlborough Sounds awaiting the arrival of Heavy Lift Vessel "Falcon" and off she goes.
"Taharoa" the iron sands bulker also anchored in Tasman Bay awaiting Letter of Credit.
Cheers

[Casa del Energia]

"Savannah" is back in Tasman Bay awaiting loading at Umuroa on Dec 4th.
"Ensco 56" along with 2 support vessels is anchored in Admiralty Bay - Marlborough Sounds awaiting the arrival of Heavy Lift Vessel "Falcon" and off she goes.
"Taharoa" the iron sands bulker also anchored in Tasman Bay awaiting Letter of Credit.
Cheers

What does Ensco 56 do for a living?

[Crypto Crude]

Im pretty sure that this is the second biggest down market day ive ever seen... New Zealand Oil and Gas done well considering...
this is a very special company... thats for sure...
Disc, I do not hold, wish I did...
most undervalued stock on the NZX....
;)
.^sc

[digger]

ACC reported to be facing a one billion dollar shortfall.Maybe ACC will have to sell its NZO holding of i think about 16 million shares or there abouts.Just something to watch.National might very well take a look at their sharemarket holdings to fund this billion dollar hole.
Actually i have never understood what they are doing in the market in the first place.Certainly ACC was never set up to play in the market.
Digger

[winner69]

ACC reported to be facing a one billion dollar shortfall.Maybe ACC will have to sell its NZO holding of i think about 16 million shares or there abouts.Just something to watch.National might very well take a look at their sharemarket holdings to fund this billion dollar hole.
Actually i have never understood what they are doing in the market in the first place.Certainly ACC was never set up to play in the market.
Digger

Even if they sold everything tomorrow they would still have a billion dollar hole in thier provisions

[Major von Tempsky]

Contract ACC out to private insurance companies - wasn't that in National's manifesto?
It's just been a feeding trough for tired Labour Party supporters and bureaucrats.

[the machine]

although not a labor party voter in australia, amseeing signs of how the rudd labor government is talking funny money and expect it will only get worse.

ACC seem to be have deprived of revenue, otherwise would not have the shortfall - one can only ask where have the funds gone?

answerr labor party funny money and looks like coming home to roost.

M

[macduffy]

I don't know if it has been reported previously here but at last week's Beach Petroleum AGM, a chart was produced showing shareprices of various Aust O&G companies as a percentage of their 52 week highs.
ORG and QGC were tops, in the 80 - 90% area from memory and these of course have been subject to M&A activity.
NZO was 3rd of 14 companies at 69% of the 52 week high.
(BPT was at 52%, Tui's big producer AWE was 48% and the average was 47%).

A pretty good effort by NZO, IMO.

[Merseyredboy]

The ACC has been underfunded by the level of appropriation not being increased to meet the rising costs of the medical provision. Also the unfunded liabilities are factored against bond rates so as the bond rates decrease the liability increases. result give the ACC more money to buy more NZO's

[fish]

For week -ending 28/11/08 Tui oil was only fetching nz $92.46 . This week looks like being less than $90 and production is falling .
Fortunately mitigating factors for sp -fall in nz dollar not only boosts nzo earnings but significantly increases the value of us cash reserves plus fall in interest rates is a relief in so many ways (particularly for those of us who borrowed for option conversion ).
Does anyone know if the price nzo will be getting for kupe lpg is based on us or nz dollar?

[Bilo]

For week -ending 28/11/08 Tui oil was only fetching nz $92.46 . This week looks like being less than $90 and production is falling .
Fortunately mitigating factors for sp -fall in nz dollar not only boosts nzo earnings but significantly increases the value of us cash reserves plus fall in interest rates is a relief in so many ways (particularly for those of us who borrowed for option conversion ).
Does anyone know if the price nzo will be getting for kupe lpg is based on us or nz dollar?

Fish I am becoming very pleased that production is falling. IMO it is a great time to do some maintenance, shut Umuroa down in January and fix up the water handling capacity. There is little hope that reserves will be replaced at less than USD50 per barrel so leave the oil in the ground for bit. If every non USD country did that the the price would move back towards a sustainable level - the US coys aren't working overtime pumping their own oil at these prices. Silly to expect OPEC to do all the cutting on their own.

It will cost US dollars to replace the producing wells so don't be fooled by the NZD returns.

[the machine]

dec 17 opec meeting if it delivers 1m/day reduction will hopefully boost poo

M

[Dr_Who]

Merrill forecast oil to drop to $25bbl. :eek::eek:

[bermuda]

Merrill forecast oil to drop to $25bbl. :eek::eek:

Hi Doctor, you are up early!. POO down today again. Been reading Profit from the Peak by Brian Hicks. Have a look at Raser Technologies, a US firm. 100 mpg SUV and into Geothermal but just look. Need to do a lot more research on this one.

But this oil decline is interesting. How low can we go?

America will have to increase the Super age to 75 years. And we will have to decrease the world's population.

At least NZO have the wherewithall to whether the storm. Just as well DS sat tight on all that loot.

[Sehnsucht888]

dec 17 opec meeting if it delivers 1m/day reduction will hopefully boost poo

M

Thats if the reduction actually happens... Seems thats not always the case

http://articles.moneycentral.msn.com/Investing/JubaksJournal/are-we-watching-the-death-of-opec.aspx

[duncan macgregor]

The ACC has been underfunded by the level of appropriation not being increased to meet the rising costs of the medical provision. Also the unfunded liabilities are factored against bond rates so as the bond rates decrease the liability increases. result give the ACC more money to buy more NZO's I would think that they have lost enough of my hard earned tax money by investing in this company already. I know they bought a great pile of options to convert surely that is enough down the drain without wishing for more. We were very unlucky that the price of oil bubbled up at that time otherwise they might only have lost the price they paid for the options. I doubt that even that pack of idiots would convert if the open market price was less than $1-50. We now find they have run out of funds thanks to all this share market losses i expect.
Hope the price of oil drops further in the sahort term to kick start a recovery. Macdunk

[digger]

Merrill forecast oil to drop to $25bbl. :eek::eek:

Unbelieveable,only last July the confidence was that it would be 200 by now.Sadly the world is in the sh-it big time as no new drill will take place.We bought into the Canterbury basin for one million.It seemed like a great deal at the time.In hindsite we could have got it for nothing.Certainly no point in drilling unless you believe the POO will be 75 US.And if you believe that there is less point in drilling as just buy futures and have 100% chance of getting future oil.
Congradulations to the directors for sitting on their hands and making no acquisitions.For us in a cruel way the longer this goes on the better as the best steals are down the track,and it can only go on for so long unless this is the final run down of the civilisation.We can only have a future if oil meets replacement cost plus some profit.The only other hope is some new energy source and so far none are on the horison.

Talk about living on a knife edge

Cheers Digger

[Dr_Who]

Why drill and take the risk when you can buy an oil stock that is producing with proven oil reserves in Aussie for next to nothing?

[brettdale]

Why drill and take the risk when you can buy an oil stock that is producing with proven oil reserves in Aussie for next to nothing?

Very good question indeed and With the price of oil about to drop to 25 bucks, then I wouldnt be investing in oil companies.

Perhaps gold will shoot up?

[duncan macgregor]

Some of you have not learned the lessons of how this MR MARKET works. Its like a great pendulum that swings to far in both directions shaking the smart people off at the top, and the dumb people off at the bottom. When a commodoty doubles in price get prepared to get out quick. When the price gets far to low to be mantained at that level get prepared to buy when it turns. Its really very simple all you have to do is look at historick commodoty charts and the effect the price had on all the in profit companies in that sector.
The dumb people risk bottom picking, simply because they feel obliged to be in the market, which is a risky method.
I have gone fishing, stuff your market, i will come back when the pendulum is swinging up and not before. Oil is a manipulated market, as with most commodoties, dont waste your time working out companies, work out the market first, then find the company best suited at that point. I think even NITA must have learned that by now. The NZO people timed the market to perfection with the options well done guys. The trough is full, jobs and perks for the boys looking pretty good now. Macdunk

[Snapper]

Merrill forecast oil to drop to $25bbl. :eek::eek:

Frankly, what the hell would they know, they were probably saying it would go to $200 a year ago. I think the monkey with his dartboard would be able to guess just as well in this environment.

If it does go to $25 though, look at the bright side...

World economy picks up quicker
Osama bin Laden doesn't get quite so many handouts from his rich Arab mates
GM will bring out an even bigger Hummer
Air travel will get cheaper
They won't cut down as much rainforest to plant in biofuels

An upside for NZO
No urgency to get the oil out
Sitting on a pile of cash for acquisitions which they know will make money when the price of oil goes through the roof again

Glass half full, I think

[Rif-Raf]

Merrill forecast oil to drop to $25bbl. :eek::eek:
To put the Merrill article into context. they are forcasting that oil could dip to as low as $25 next year (if x,y and z occur), however they forecast the average price for 2009 to be $50 - if they are correct that is a price higher than current (sub $50 levels) levels so you should all be buying oil shares!


Oil May Fall Below $25 Next Year, Merrill Lynch Says (Update1)
Email | Print | A A A

By Grant Smith

Dec. 4 (Bloomberg) -- Crude oil may dip below $25 a barrel next year if the recession that’s slashing fuel demand around the world spreads to China, Merrill Lynch & Co. said.

Global oil demand will contract in 2009 as economic growth slows to its weakest since 1982, Merrill Commodity Strategist Francisco Blanch said in a report today. In October, when oil was around $100 a barrel, the bank predicted that prices may slide to $50. Crude traded at $45.30 in New York today, the lowest since February 2005.

“A temporary drop below $25 a barrel is possible if the global recession extends to China and significant non-OPEC cuts are required,” Blanch said. “In the short-run, global oil demand growth will likely take a further beating as banks continue to cut credit to consumers and corporations.”

Crude hasn’t fallen below $25 a barrel on the New York Mercantile Exchange since November 2002.

Global oil demand has slumped as the U.S., Europe and Japan face simultaneous recessions for the first time since World War II. The number of Americans collecting jobless benefits rose to 4 million in the week to Nov. 22, a 26-year high, the Labor Department reported today. European Central Bank President Jean- Claude Trichet said the euro region’s economy will shrink in 2009.

$50 Average

Merrill reiterated a Nov. 26 forecast that oil futures traded in New York will average $50 a barrel next year. Prices “could find a trough” at the end of the first quarter and undergo a “modest recovery” in the second half as economies strengthen, according to today’s report.

“We expect strong cooperation to emerge” among members of the Organization of Petroleum Exporting Countries as prices fall below $50, Blanch said. OPEC, producer of more than 40 percent of the world’s crude, was still pumping about 1 million barrels a day more than its official target of 27.3 million barrels a day last month, according to a Bloomberg survey.

Producers in Canada may shutter almost 800,000 barrels a day if prices decline below $35 a barrel, Blanch added.

Merrill’s $50-a-barrel assessment for 2009 is the second- lowest among 32 analyst estimates compiled by Bloomberg, after a prediction of $43.13 by ANZ Banking Group Ltd. issued on Nov. 18.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

[sideline]

Frankly, what the hell would they know, they were probably saying it would go to $200 a year ago. I think the monkey with his dartboard would be able to guess just as well in this environment.

If it does go to $25 though, look at the bright side...

World economy picks up quicker
Osama bin Laden doesn't get quite so many handouts from his rich Arab mates
GM will bring out an even bigger Hummer
Air travel will get cheaper
They won't cut down as much rainforest to plant in biofuels

An upside for NZO
No urgency to get the oil out
Sitting on a pile of cash for acquisitions which they know will make money when the price of oil goes through the roof again

Glass half full, I think

I found the release of the EIA Petroleum Status report about crude oil inventories rather interesting:
For the first time in 10 weeks US stockpiles have been shrinking (by 400k barrels) while market
expectation was for a rise in 1m barrels. It indicates to me that there is probably no oversupply
left in the market now and if OPEC cuts supply again in two weeks ......
In the end the market which prides itself on being 'forward
looking' last night chose to ignore this and focus instead on the Merril 'report'.
They can probably monkey around a little bit longer and see how low they can talk
and push the price.
So for tonight I expect the focus will be on the dreadful 'Employment report' coming out.
But the market can ignore fundamentals only for so long until they catch up with it.

As far as Merril Lynch goes (isn't that the company that is going to be rescued/acquired by Bank of
America, to be voted on by Merril shareholders tomorrow, December 5??), I noted from their
research report this little gem: Global oil demand will contract in 2009 as economic growth slows to its weakest since 1982.
How can oil demand contract while the economy still GROWS (albeit slower) ????
Maybe some genius from Merril could explain this to us........

[Dr_Who]

Any chartist out there can give us their views on NZO chart?

It just looks like it is going lower.

[macduffy]

How can oil demand contract while the economy still GROWS (albeit slower) ????
Maybe some genius from Merril could explain this to us........ QUOTE

I believe Merrills are working on some magic b...dust which will not only provide 100% accurate economic forecasts but will also be the long awaited environmentally friendly alternative to oil.

:rolleyes:

[arjay]

Merrill’s $50-a-barrel assessment for 2009 is the second- lowest among 32 analyst estimates compiled by Bloomberg, after a prediction of $43.13 by ANZ Banking Group Ltd. issued on Nov. 18.




I think ANZ's assessment is wildly pessimistic. I would have thought $43.39 would be more like it, although both figures are really too coarse to mean much.

[sideline]

I believe Merrills are working on some magic b...dust which will not only provide 100% accurate economic forecasts but will also be the long awaited environmentally friendly alternative to oil.

:rolleyes:

What, they'll run all their research reports through the paper shredder and use the
result as alternative fuel???

[the machine]

Very good question indeed and With the price of oil about to drop to 25 bucks, then I wouldnt be investing in oil companies.

Perhaps gold will shoot up?

think thats what a few of the big players are doing

M

[Dr_Who]

Oil $41 today :eek::eek:

Gas sale revenue from NZO doesnt come on stream until 2010. With oil prices at these levels it doesnt seem like Tui is profitable for NZO. Next year will be a cashflow negative year for NZO?

[Corporate]

Oil $41 today :eek::eek:

Gas sale revenue from NZO doesnt come on stream until 2010. With oil prices at these levels it doesnt seem like Tui is profitable for NZO. Next year will be a cashflow negative year for NZO?

Dr Who, Tui is profitable at any price above $10. Whether shareholders want it coming out of the ground at the price is another story.

[AMR]

Today's announcement that NZO joins that top 15 might explain the accumulation we saw last week on the chart.

[Chippie]

Oil $41 today :eek::eek:

Gas sale revenue from NZO doesnt come on stream until 2010. With oil prices at these levels it doesnt seem like Tui is profitable for NZO. Next year will be a cashflow negative year for NZO?

Are you having us on. I can not tell if you are joking, trying to scare shareholders or just talking Rubbish. With Opex costs of $10 a barrel Tui is will be okay (for now)

[boysy]

though their are many other associated costs as even nzo have pointed out.

[macduffy]

Are you having us on. I can not tell if you are joking, trying to scare shareholders or just talking Rubbish. With Opex costs of $10 a barrel Tui is will be okay (for now)

Maybe not cashflow negative but certainly struggling to post an after-tax profit.
NZO chairman's address to the AGM on 29 Oct. included these per bbl figures re Tui:

Production expense $17
Marketing $7
Dpn and Amort. $ 16
Royalties $16
Tax $19

Total NZD75

Royalties and Tax will be less with a lower PoO, of course, but not a lot of margin with current prices and exchange rates.

;)

[Balance]

Maybe not cashflow negative but certainly struggling to post an after-tax profit.
NZO chairman's address to the AGM on 29 Oct. included these per bbl figures re Tui:

Production expense $17
Marketing $7
Dpn and Amort. $ 16
Royalties $16
Tax $19

Total NZD75

Royalties and Tax will be less with a lower PoO, of course, but not a lot of margin with current prices and exchange rates.

;)

Oil just dropped towards $40 so in NZ$ terms, now $75.

But royalty tax is 12.5% so now $9, and tax = $8.

Net profit per barrel now = $18.

Looking grim .... might as well leave it in the ground for future years.

[the machine]

Today's announcement that NZO joins that top 15 might explain the accumulation we saw last week on the chart.


the announcement made after market so hopefully will give a boost to sp on monday


M

[Dr_Who]

the announcement made after market so hopefully will give a boost to sp on monday


M


Na mate, the institutions have already factored into the sp, hence the large volume seen last week. There are further downside risk to NZO compare to other Aussie oilers.

Industrial Natural Gas Demand Slump Adds Pressure To Prices
NEW YORK (Dow Jones)--Big industrial companies are sharply cutting back their natural gas consumption as the economic slowdown erodes demand for their products, adding downward pressure to already sinking gas prices.
The front-month futures price for gas is now down about 58% from its early July peak, as a surge in domestic U.S. supplies raised fears of a glut just as demand was starting to crumble. Between April and September, monthly gas consumption by industrial users dropped 14% to 4.756 billion cubic feet, the lowest monthly figure since at least 2001, according to U.S. Department of Energy statistics. And anecdotal evidence indicates consumption is falling even further as gas-intensive industries ease back production.
According to an informal survey by the Industrial Energy Consumers of America of eight major industrial companies, gas usage is down 22%, on average, from a year ago. The Washington, D.C.-based lobbying group said its survey comprised a cross-section of major industrial companies, including fertilizer, brick, glass, and automotive businesses. Industrial companies account for about 30% of total U.S. gas demand, according to the Energy Information Administration, the statistical arm of the Department of Energy.
"We think consumption will continue to fall into 2009," said Paul Cicio, the president of the IECA. "Capital expenditures are being put on hold."
Cutting Back
Natural gas is the base ingredient for products including plastic, fertilizer, antifreeze and some fabrics. Companies also use natural gas for onsite power plants and heating systems.
The falloff in natural gas demand has been particularly noticeable in the fertilizer industry because gas is an essential raw material for nitrogen-based fertilizer production.
Agrium Inc. (AGU), a Canadian fertilizer company with extensive U.S. operations, has cut its natural gas consumption by between 5% and 10% this year, compared to last year, said Richard Downey, the company's vice president of investor relations. Agrium shut down one unit of a large fertilizer plant in Alberta indefinitely in September amid falling fertilizer demand and high natural gas prices.
But the company's gas demand could rebound in the spring as planting season begins, Downey said.
"We've seen a slight decline in our gas purchase requirements, but we do think it's a short-term phenomenon," he said.
CF Industries Holdings, Inc. (CF), a Deerfield, Ill.-based fertilizer company, hasn't reported a decline in natural gas demand or fertilizer production, but the company is "monitoring the situation closely," said spokesman Charles Nekvasil.
Expectations of lower industrial demand have led analysts to slash their natural gas-price forecasts for next year. U.K.-based energy advisory firm Wood Mackenzie said last month that it expects U.S. natural gas prices to trade in a range of $5.00 to $6.00 a million British thermal units for the next five years. Gas for January delivery was recently trading down 4.4% at $5.752 a million British thermal units on the New York Mercantile exchange.
"In coming to our conclusions, we have taken account of...the decline in demand due to a prolonged recession to (the fourth quarter) 2010," said Jen Snyder, head of Wood Mackenzie North American Gas Research, speaking at the company's Houston Energy forum in November.
Meanwhile, Morgan Stanley has cut its 2009 natural gas price expectation Tuesday to $7/MMBtu from $8/MMBtu.
"Industrial demand trends continue to weaken, as chemical demand looks to be a key area of potential weakness in '09," Morgan Stanley analysts wrote in a note to clients.
The Federal Reserve's Industrial Production Index, which includes gas-intensive industries such as petrochemicals and refining, fell 6% in September, compared with the previous year.
Dow Chemical Co. (DOW) Chief Executive Andrew Liveris on Thursday told CNBC that he expects the company to announce cost reductions in coming weeks to deal with "miserable" economic conditions.
Spokesmen from chemical giants DuPont Co. (DD) and Dow didn't return calls for comment.
Looking Beyond Winter
In the near term, sliding industrial gas demand could be offset by unusually cold winter weather in the major gas-consuming regions, which could spark significant heating demand. WSI Corp., an Andover, Mass.-based private forecaster, is predicting below-normal temperatures in the Northeast, Southeast and Midwest in December.
But beyond the winter heating season, falling industrial consumption, combined with continued production growth from natural gas-shale reservoirs and rising imports of liquefied natural gas, is likely to pressure prices lower, analysts said. Falling petroleum prices are also likely to drive the natural gas market lower, said Amy Sweeney, a statistician at the Energy Information Administration in Washington, D.C.
"A lot of industrial consumers can switch between natural gas and petroleum products to fire their plants, and petroleum prices have dropped a lot," she said.
(Christine Buurma covers U.S. power companies and the natural gas market for Dow Jones Newswires, and can be reached at (201) 938-2061, or christine.buurma@dowjones.com)

[neopole]

from a laymans point of view,
i think opec is letting the poo slide for now to help the global financally world try and recover.
the world couldnt live on plus $100 oil, and the house of cards colapsed, but the skill to rebuild it still exsists and every will be ok sometime soon, untill then, dish out cheap oil to help the rebuild, after that, those than run or control the economies will play with a bit more foresight......... hopefully.

everyone is aware that cheap oil for too long is not good for future growth, just as expensive oil is also not good.
as the worlds web of interactivity gets tighter, world leaders and power brokers need to work together more to curtail the excessive highs and lows.

which does seem to be happining......... slowly.

now is a good time to stock up if planning for the long term.

[Major von Tempsky]

So, Nita was wrong....she was talking about $50 oil and was rubbished for her pains for being too pessimistic.....now its $40 oil.... come back Nita, all is forgiven and retracted....

[boysy]

This graph is quite interesting in horizon oil presentation showing oil supply costs on page 17. You really do wonder how long oil can stay at present prices in the long term though im sure oil will test new lows in the short term theirs just too much negativity in the market even "good" news is treated with extreme sceptisism.

http://www.asx.com.au/asxpdf/20081127/pdf/31dvw5d53zmwj4.pdf

[digger]

This graph is quite interesting in horizon oil presentation showing oil supply costs on page 17. You really do wonder how long oil can stay at present prices in the long term though im sure oil will test new lows in the short term theirs just too much negativity in the market even "good" news is treated with extreme sceptisism.

http://www.asx.com.au/asxpdf/20081127/pdf/31dvw5d53zmwj4.pdf


Very informative graph boysy.Also note on quick look that is the cost of existing in place oil production.It is not the cost that each country can produce in the future from wells not yet discovered or discovered but not yet began developing. So sadly for consumers that means this low current price better not hang around for long or we will all pay dearly in the mid term when demand restarts.
Cheers Digger.

[duncan macgregor]

DIGGER, You are looking at the wrong things then trying to come up with a logical answer. First of all the price of oil is a manipulated price commodoty not ruled by supply and demand. Right now supply exceeds demand with the powers that be manipulating the price.
The second thing to take note of is certain parts of the world are off limits to oil exploration, example being artic and antartic areas of great potential.
The thing to remember is that the future oil price will be manipulated to a greater extent up to the point of an alternative coming on track. Follow your oil stocks up in a rising market, but be prepared to get out quick when the market turns.
That is a logical position to get into in a manipulated market. The rich get richer as the poor dumb clucks bleat on about this company or that. Peak oil is in the distant future. The Chinese at this moment have about 2 million electric scooters on the road increasing at a very fast rate. If peak oil is a worry buy uranium stocks. Macdunk

[shasta]

DIGGER, You are looking at the wrong things then trying to come up with a logical answer. First of all the price of oil is a manipulated price commodoty not ruled by supply and demand. Right now supply exceeds demand with the powers that be manipulating the price.
The second thing to take note of is certain parts of the world are off limits to oil exploration, example being artic and antartic areas of great potential.
The thing to remember is that the future oil price will be manipulated to a greater extent up to the point of an alternative coming on track. Follow your oil stocks up in a rising market, but be prepared to get out quick when the market turns.
That is a logical position to get into in a manipulated market. The rich get richer as the poor dumb clucks bleat on about this company or that. Peak oil is in the distant future. The Chinese at this moment have about 2 million electric scooters on the road increasing at a very fast rate. If peak oil is a worry buy uranium stocks. Macdunk

Macdunk

Funny you using Uranium as an example, you don't think it's as manipulated as Oil, then think again!

Look at the Uranium highs of 2007 (like oil), & see how they seemingly went up together & back down together, coincidence i think not!

Uranium & all other alternatives need Oil much higher, so what chance OPEC allowed oil to drop off to quell off the alternatives just long enough to ride oil up again in the future?

Natural Gas appears to be the more likely oil replacement, along with it's CSG & LNG counterparts.

NZO has set itself up nicely, with oil, coal & gas/lpg.

Don't be too surprised if it looks a little closer into CSG/CBM, especially in the lower South Island.

LMP are looking around down there too...

[airedale]

<a href="http://www.findata.co.nz/Markets/StockQuote/NZX/NZO.htm">
<img src="http://chart.findata.co.nz/?e=NZX&s=NZO&p=D&n=1825&w=560&h=500&vol=1&v=0" style="border:0px solid black; width:560px; height:500px" />
</a>

Just trying my hand at posting charts

[Dr_Who]

Looks like NZO and PRC could test new lows. :eek:

[boysy]

why lower oil prices are good in the short term from the horses mouth


The international oil price has fallen rapidly from the record highs seen mid-year, but
David Salisbury says this is actually opening up opportunities for NZOG.


“Those who hold worthwhile assets but are over extended, reliant on debt or equity
funding, or in some other way needing assistance to complete their projects, are finding
it tough. Price expectations are lowering and industry consolidation is starting to
happen and is likely to gather pace. It is a time of opportunity to create greater wealth
for shareholders and we are looking to use our strong position to secure attractive new
ventures,” David Salisbury said.

[Rabbi]

It is a time of opportunity to create greater wealth
for shareholders and we are looking to use our strong position to secure attractive new
ventures,” David Salisbury said.[/quote]

....and they are being very circumspect
One can't accuse them of spending money willy-nilly.;)

[Crypto Crude]

mackdunk,
we are not poor dumb clucks...
...
Im rather infuriated that you would continue to say such words...
...
In future can you address the posters you are referring to because you are confusing us by grouping us all together....
some posters are rather astute, and its unfair to post like that...
..... if there is something you want me to explain, then im happy to pull a rabbit out of my hat just for you....
:cool:
.^sc

[fabs]

China Offering Brazil 10 Bil. To Help Develop The Recently Discovered Deep Water Oil Field Containing 50 70 Bil. Boo.
Also Brazil Is Ready To Tap Into Its 207 Bil. Foreign Reserves For Exploration If Needed. One Has To Wonder If They Can Do It Economicaly If The Price Is $40.00 Let Alone $ 25.00
Trust The Chinese Optimismus.
Cheers
Albert

[bermuda]

China Offering Brazil 10 Bil. To Help Develop The Recently Discovered Deep Water Oil Field Containing 50 70 Bil. Boo.
Also Brazil Is Ready To Tap Into Its 207 Bil. Foreign Reserves For Exploration If Needed. One Has To Wonder If They Can Do It Economicaly If The Price Is $40.00 Let Alone $ 25.00
Trust The Chinese Optimismus.
Cheers
Albert

Fabs,
This is today's price. The Chinese are Master Planners and know that these wells have to be drilled if the world wants to improve it's GDP. A couple of years ago, way before the rapid rise to $147/bbl, the Chinese were out securing long term oil contracts with options up to $200/bbl.

[duncan macgregor]

mackdunk,
we are not poor dumb clucks...
...
Im rather infuriated that you would continue to say such words...
...
In future can you address the posters you are referring to because you are confusing us by grouping us all together....
some posters are rather astute, and its unfair to post like that...
..... if there is something you want me to explain, then im happy to pull a rabbit out of my hat just for you....
:cool:
.^sc SHREWDY, Its alright to rave on about a company or a market in a steep uptrend, but dont dare come out and warn people about risky investment styles or a market about to crash. People get so wrapped up falling in love with a company or a sector in the market that they blind themselves to reality. I make no appology for warning them or by calling them dumb clucks. I have been consistent in my warnings to you, and others all year so judge me on my record.
To give your profits back in a falling market turning it into a dead loss bleating on about being a long time investor to me represents a dumb cluck. You work it out your self, are you one of them or not or have you learned enough to know the market is a place of manipulation to be treated as such. Your old mate Macdunk

[Dr_Who]

Oil stocks are surprisingly weak in Aussie with STO -2.1% and WPL -2.4%.

[Sideshow Bob]

I see we've got the week off.......

http://www.nzog.net/tui

1 July - 7 December: Approx 5.0 million barrels. NZOG's share of production approximately 630,000 barrels.

A planned one week shutdown of the Tui FPSO Umuroa for routine maintenance and inspection commenced on 7 December. This has required the first complete shutdown of production. The Umuroa has operated continuously with oil produced since start up around 500 days ago, with over 19 million barrels of oil produced and delivered to market. Production remains on target for 9 million barrels in the financial year to the end of June 2009.

[sideline]

I see we've got the week off.......

http://www.nzog.net/tui

1 July - 7 December: Approx 5.0 million barrels. NZOG's share of production approximately 630,000 barrels.

A planned one week shutdown of the Tui FPSO Umuroa for routine maintenance and inspection commenced on 7 December. This has required the first complete shutdown of production. The Umuroa has operated continuously with oil produced since start up around 500 days ago, with over 19 million barrels of oil produced and delivered to market. Production remains on target for 9 million barrels in the financial year to the end of June 2009.

Keep maintaining the Umuroa until the POO has recovered to some sensible level, I say.

[Crypto Crude]

mackdunk,
You have not removed yourself from current market losses like you say you have...

you admittedly locked in higher fixed interest rates, which are now being used to support bank balance sheets as they struggle with the current market situation... So you sold your shares, but you pay much higher locked interest rates... To be completely honest you have transferred your losses to different asset classes...
so dont be giving us a hard time... I know im right... you taught me the insights too well... I too gave you grave warnings...
you were tipping your position on interest rates at the peak of the cycle...

If we losen up all the assumptions, you are effectively indifferent between the losses on the sharemarket compared to losses on fixed term rates (as housing uses other peoples money, and is leveraged)...
come on mackdunk... fess up?... what about the other things I addressed before... hehe... im now underground on the homebuyers thread... I cant be bothered with it all as you know...

I will post our new heads up competition now...

peace out... lets remain respectful towards other posters please...
If you want to pull us apart then please address us properly...
Your mate Shrewd keeping all facts open and honest...
peace...
:cool:
.^sc

[duncan macgregor]

SHREWDY we are getting a bit off topic here will reply tonight on the property thread.
The price of oil cant get much lower without a cut back in production which in turn will create another price hike. Now is the time to buy barrels of top grade lubricant, and stick them in the shed to sell back later. That is a practical way to avoid a money crash or inflation which ever comes first, much safer than shares. Buy in bad times material things that hold their value, money is only a promise to pay stampted on a bit of paper. Macdunk

[Crypto Crude]

aint nothing more off topic than saying poor dumb clucks...

what about your other famous sayings?

mackdunk...
there are famous posters on this thread (luckier than I in this period) who hold NZO only...there are famous king pins here behind the scenes who hold NZO only.... wheres Jimbo?
they have seen their stock rise 50% plus and then pull back 50%...
they have seen the market fall 50%....
effectively their assets have gone sideways in a falling market...
why would these people be poor dumb clucks...? explain that?

this is magical for them...
long termers are still up......
some traders are still up over the last few years...

mackdunk, please give it up to them and us for surviving in these times...

holla...
:cool:
.^sc

[dsurf]

BRAZILIAN mining giant Vale said it will not reduce the price of its iron ore to push sales volumes higher.

“Price isn’t the problem. Clients aren’t asking for discounts, they’re asking for delays in shipments,” Vale's chief executive Roger Agnelli said in a presentation overnight.

According to Mr Agnelli, the volumes of iron ore stocks in Australia and Brazil have dropped dramatically, and this is worrying.

“If possible, we need to build our inventory. Our ports are completely empty and we need to have 3 million to 4 million tonnes at each port,” Mr Agnelli said.

He added that the heated demand before the onset of the economic crisis was unsustainable.

“I thought it wasn’t possible to produce at 110 per cent to 115 per cent nominal capacity, delaying maintenance, etc.," Mr Agnelli said.

“I also thought the $US55,000-a-tonne nickel price last year was not sustainable, likewise the heavy investment by hedge funds in commodities.”

Mr Agnelli said Vale needed to be flexible and, at the moment, it was best to act calmly.

“All our options are open, investments, acquisitions. We’ll be in this position for one or two months,” the chief executive said.

“We face one simple reality: the market reality.”

When asked whether now was the best time to make an acquisition, given depreciated stock prices, Mr Agnelli said” “The best accusation we can make is buying back our shares. We’re in good shape, I don’t know about the other companies. Our investments (in Vale) bring in more shareholder value than acquisitions. Our projects bring in a higher return.”

Mr Agnelli conceded that any acquisition could be considered if it consolidated Vale operations, such as in the coal sector.

Furthermore, he said recent production cuts were a response to market conditions. He cited the announced suspension of alumina output at the company’s Valesul unit in Rio de Janeiro.

“We felt Valesul was about to lose money in one or two months, so we closed it down,” he said.

Vale recently cut its iron ore output by 30 million tonnes a year, suspended ferroalloy and alumina production in some of its units, and also reduced nickel output.

“There’s no market for manganese and nickel. Some are selling nickel at $US8,000 a tonne. We don’t need to sell. We’re cutting costs and keeping cash,” Mr Agnelli said.

“We have a lot of cash right now, and we need to wait a little bit. In late January, we will have a clearer idea of the (market) situation.”

In addition, Mr Agnelli continued to express optimism about future prospects.

“China in the long and medium term is good, as are the prospects for Latin America and Brazil,” he said.

He dismissed “as gossip” press reports of conflict with Chinese steel mills. In fact, he said: “We’re very close to our (Chinese) clients.”

Mr Agnelli said the downturn in iron ore demand would mean that 50 per cent of producers would be out of the market.

“The next two to three months will clarify who is in the market and who is out.”

[fish]

[
“I thought it wasn’t possible to produce at 110 per cent to 115 per cent nominal capacity, delaying maintenance, etc.," Mr Agnelli said.



I suspect this applies to oil as well -nzo wont be the only ones stopping production for maintainace .

Talk seems to be of big drops in Saudi production next month .

IEA predicting rises in demand .

A recipe for soring prices-just dont know when - futures are higher than current prices-you could make a fortune storing oil- ?best if nzo leaves it in the ground for now-certainly couldnt be a better time to do maintainance

[Sehnsucht888]

10% increase in crude last night too. I wonder how that will be treated today...

[digger]

[
“I thought it wasn’t possible to produce at 110 per cent to 115 per cent nominal capacity, delaying maintenance, etc.," Mr Agnelli said.



I suspect this applies to oil as well -nzo wont be the only ones stopping production for maintainace .

Talk seems to be of big drops in Saudi production next month .

IEA predicting rises in demand .

A recipe for soring prices-just dont know when - futures are higher than current prices-you could make a fortune storing oil- ?best if nzo leaves it in the ground for now-certainly couldnt be a better time to do maintainance

Agree totally fish .Also remembering the gas from TUI was shuntted aside as oil price was too high to stop. Now is a good time to relook at this problem and another very good reason to delay restarting Tui if one is needed.I presonally think we should do something about this gas as it will seem very legally waistful any time in the future.It could also maybe even now turned into a profit.Remember the not yet found oil near TUI will also most likely be gas fulled as well. Too much to waist.
Digger

[Dr_Who]

I understand the production cost for Tui is arond $79bbl?

[upside_umop]

I think you understand wrong.

Its been stated many times the opex for tui on this thread. Have a look...tui as a whole project including capex was viable (and returning an acceptable ROI) at $40usd bbl, so does $79 bbl sound right for production?

[bermuda]

I understand the production cost for Tui is arond $79bbl?

Dr,
If you are quoting $US then you are off the mark by almost a factor of 10.
Where do you get these figures from?
Or is it a typo?

[sideline]

Dr,
If you are quoting $US then you are off the mark by almost a factor of 10.
Where do you get these figures from?
Or is it a typo?

Sadly the good doctor has turned to the dark side a while ago, nothing but doom and gloom.

Should probably be called Darth_Who, maybe we all wrongly assumed that Dr means doctor??

[Balance]

Dr,
If you are quoting $US then you are off the mark by almost a factor of 10.
Where do you get these figures from?
Or is it a typo?

Bermuda,

NZO chairman's address to the AGM on 29 Oct. included these per bbl figures re Tui (in NZ$):

Production expense $17, Marketing $7, Dep and Amortisation $ 16

So cost before royalty and tax = NZ$40.

Using oil at US$45/barrel, royalty = US$5.6 or NZ$10.

Tax on profit = NZ$10.

All up cost and tax to NZO per barrel = NZ$60.

So profit to NZO = NZ$23/barrel.

Are the figures right?

If they are, Tui will need to be shut down if oil goes to US$30/barrel?

[Corporate]

Bermuda,

NZO chairman's address to the AGM on 29 Oct. included these per bbl figures re Tui (in NZ$):

Production expense $17, Marketing $7, Dep and Amortisation $ 16

So cost before royalty and tax = NZ$40.

Using oil at US$45/barrel, royalty = US$5.6 or NZ$10.

Tax on profit = NZ$10.

All up cost and tax to NZO per barrel = NZ$60.

So profit to NZO = NZ$23/barrel.


Are the figures right?

If they are, Tui will need to be shut down if oil goes to US$30/barrel?


Balance - just remember that Depreciation and Amortisation are just accounting expenses and have no cash affect.

[winner69]

Balance - just remember that Depreciation and Amortisation are just accounting expenses and have no cash affect.

Was cash once wasn't it ..... and as a bare minimum shouldn't the amount of 'depreciation and amortisatation' be spent today (in cash) to provide the future income streams.

[Corporate]

Was cash once wasn't it ..... and as a bare minimum shouldn't the amount of 'depreciation and amortisatation' be spent today (in cash) to provide the future income streams.


Depreciation/Amortisation is the writing down of the book value of the asset over it's useful life. Yes there should be money spent on maintenance but it is nothing like the amount that is expensed through depreciation.

Depreciation and providing for futre income streams are unrelated. The $16 of depreciation will only relate to the Tui project expenditure.

[winner69]

Depreciation/Amortisation is the writing down of the book value of the asset over it's useful life. Yes there should be money spent on maintenance but it is nothing like the amount that is expensed through depreciation.

Depreciation and providing for futre income streams are unrelated. The $16 of depreciation will only relate to the Tui project expenditure.


Buffet once asked "Does management think the tooth fairy pays for capital expenditures?" .... think about 'cash' and future (capital} requirements to replace the current cash flows so NZO can continue to prosper well inot the future ... thats what i was trying to get at when suggesting that D&A are in essence 'cash' .... even though in pure accounting terms you are correct in saying what you have said.

[Corporate]

Buffet once asked "Does management think the tooth fairy pays for capital expenditures?" .... think about 'cash' and future (capital} requirements to replace the current cash flows so NZO can continue to prosper well inot the future ... thats what i was trying to get at when suggesting that D&A are in essence 'cash' .... even though in pure accounting terms you are correct in saying what you have said.

Hey Winner, i'm still not really with you on this one.

Analyst of Tui's profitability at certain oil prices has nothing to do with providing for future capex to replace tui once all the oil is extracted.

[Balance]

Let's think this through.

NZO spends, say $100m finding and developing an oilfield. The $100m is then capitalised. This could come from shareholders' funds or it could come from borrowings.

Let's assume it comes from borrowings. As NZO generates revenue from the oil field, it sets aside $100m as amortisation of the oilfield. This is then used to pay off the borrowings.

Net net, NZO is no better off unless it used shareholders' funds to fund the $100m. In which case, NZO will have $100m in cash at the end of it all. It will then use the $100m to try and find a new well to replace the depleting one - otherwise, NZO goes out of business.

Remember dividends can only be paid from profits so amortisation and depreciation arec real expenses.

[Bixbite]

.

If readers wish to know more about this Depreciation/Amortisation, please refer to the NZOG’s Financial Statements for the year ended 30 June 2008: -

http://www.nzog.net/f111,57934/57934_NZOG_Financial_Statements_Audit_Opinion.pdf


Page 32
17 Exploration and evaluation, development and production assets
a. Exploration and evaluation assets
b. Development assets
c. Production assets

.

[Dr_Who]

Phaedrus (http://www.sharetrader.co.nz/member.php?u=4593), can you give us your views on NZO's chart? Cheers mate.

[Phaedrus]

Here you are Doc. NZO remains in a downtrend that has lasted for 5 months so far. Trend-following active investors would have exited this stock back in July when the confirmed trendline was broken (large red arrow). Such investors would not yet have re-entered and would perhaps be waiting for a break above the current confirmed (red) trendline before doing so.

Those attempting to trade the secondary trends that comprise the downtrend could be using trendline breaks to time their entries and exits. The magenta and light-green lines mark these secondary trends, with small red and green arrows marking the associated buy and sell points. These traders would currently be holding NZO but would be watching it very closely - current price action being just a gnat's eyelash away from breaking the current confirmed trendline (light green).

Since mid October, NZO has been forming a "Symmetrical Triangle Bottom". 43% of these formations break out to the upside, with 57% breaking out to the downside, so they are of very little predictive value. An upside breakout would give a Buy signal while a downside breakout would give a Sell signal for short-term traders.
http://h1.ripway.com/78963/NZO1214.gif

[Dr_Who]

Thanks Phaedrus. Your charts and comments are fantastic!

Oh, and welcome back. Where have you been? Holiday?

[upside_umop]

Bermuda,

NZO chairman's address to the AGM on 29 Oct. included these per bbl figures re Tui (in NZ$):

Production expense $17, Marketing $7, Dep and Amortisation $ 16

So cost before royalty and tax = NZ$40.

Using oil at US$45/barrel, royalty = US$5.6 or NZ$10.

Tax on profit = NZ$10.

All up cost and tax to NZO per barrel = NZ$60.

So profit to NZO = NZ$23/barrel.

Are the figures right?

If they are, Tui will need to be shut down if oil goes to US$30/barrel?

Yes, you are right about the profit. But as stephejame says, the 'cashflows' are more important.

So yeah...add back $16 to your original figures. Cash flow per barrel is more like $40 NZD...which is still around $150,000 per day in the bank account at 30,000 barrels.

[upside_umop]

Let's think this through.

NZO spends, say $100m finding and developing an oilfield. The $100m is then capitalised. This could come from shareholders' funds or it could come from borrowings.

Let's assume it comes from borrowings. As NZO generates revenue from the oil field, it sets aside $100m as amortisation of the oilfield. This is then used to pay off the borrowings.

Net net, NZO is no better off unless it used shareholders' funds to fund the $100m. In which case, NZO will have $100m in cash at the end of it all. It will then use the $100m to try and find a new well to replace the depleting one - otherwise, NZO goes out of business.

Remember dividends can only be paid from profits so amortisation and depreciation arec real expenses.

Well, to be honest, NZO wouldnt continue with development unless its going to deliver positive value to shareholders. Ie a positive NPV.

An NPV is based off a discounted rate which shareholders require. Its widely known that using some portion of debt is desirable as the interest is tax deductible and that interest is requires less risk than shareholders funds. This is shown in MM proposition.

NZO wont go out of business anytime soon with KUPE coming online. That answers that. Pike should still deliver a reasonable profit unless coking coal gets really hammered!

Your talking poo's that dividends can only be paid from profits! As long as they meet the solvency test and they're generating positive cashflows, dividends can be paid. In the long run yes...profits may catch up with cashflow situation. But again...its the cashflows that matter.

FYI Tui cost NZO around $45 million and has so far delivered in excess of 3 times that cashflow.

[Corporate]

Well, to be honest, NZO wouldnt continue with development unless its going to deliver positive value to shareholders. Ie a positive NPV.

An NPV is based off a discounted rate which shareholders require. Its widely known that using some portion of debt is desirable as the interest is tax deductible and that interest is requires less risk than shareholders funds. This is shown in MM proposition.

NZO wont go out of business anytime soon with KUPE coming online. That answers that. Pike should still deliver a reasonable profit unless coking coal gets really hammered!

Your talking poo's that dividends can only be paid from profits! As long as they meet the solvency test and they're generating positive cashflows, dividends can be paid. In the long run yes...profits may catch up with cashflow situation. But again...its the cashflows that matter.

FYI Tui cost NZO around $45 million and has so far delivered in excess of 3 times that cashflow.


Upside..you sum'd that up nicely. I was also going to mention the dividend comment.

[Wilkins_Micawber]

From todays update to NZOG website ....
"Given the continued performance of the field (TUI), the Operator AWE has advised that the proven and probable (2P) reserve estimate can remain at 50.1 million barrels, without the extra well."

Does any one know the significance of 2P staying the same without the extra well?

If the existing 3 wells can provide 50.1 and that had been previously expected from 4 wells, then could this be possibly be taken to be an upgrade by 1/3 (i.e. potentially nearly an extra 17 million barrels). Sounds extreme, and surely this would have to be officially notified...

[upside_umop]

This is good Wilkins, very good. It means no capital expenditure like the market was expecting to get the addition reserves. But it also leaves upside for more reserves by adding the extra well. I wouldnt think it would be 17 million barrels...as they are only drilling into an existing reservoir. Dont quote me on that though, maybe someone else can comment.

PPP certaintly likes the news, nice buyer or two building now at 25 cents.

[Balance]

Upside..you sum'd that up nicely. I was also going to mention the dividend comment.

Suggest you read the following :

http://www.worrells.net.au/factsheets/Void_Corporate_Dividends.htm

Cheers.

[Mr Tommy]

This is good Wilkins, very good. It means no capital expenditure like the market was expecting to get the addition reserves. But it also leaves upside for more reserves by adding the extra well. I wouldnt think it would be 17 million barrels...as they are only drilling into an existing reservoir. Dont quote me on that though, maybe someone else can comment.


Maybe the decision of deferring the final Tui production well is because with oil at $45, its better to keep it in the ground, as many people have suggested.

So instead they can keep exploring in the meantime, and any new finds made will take a few years to develop, by which time oil should have recovered.

[Mr Tommy]

Hey I just thought, maybe Mr OPEC rang up Mr NOG and asked them to defer the extra Tui well, they dont want all that extra oil flooding the market.

[manxman]

Maybe the decision of deferring the final Tui production well is because with oil at $45, its better to keep it in the ground, as many people have suggested.

So instead they can keep exploring in the meantime, and any new finds made will take a few years to develop, by which time oil should have recovered.

There is also the consideration that Umuroa can only handle five wells, so they wouldn't want to use up the last slot with a Tui well while there are still prospects which could be tied back. The 50.1 mmb of reserves was contingent on getting an extra production hole drilled. Now apparently the operator feels that they can get 50.1 at least from the existing wells, so it is a de facto upgrade. If none of the adjacent prospects works out, they can go back and drill Tui-4h later and report an increase in reserves at that stage.

Good confident announcement from DS. The market liked it.

[Corporate]

Suggest you read the following :

http://www.worrells.net.au/factsheets/Void_Corporate_Dividends.htm

Cheers.

Are you trying to say that if a company has net profit after tax of say $100million and wants to pay a dividend of $120 million it can't?

Even if after the dividend is paid the company remains solvent.

[Casa del Energia]

Who's put a rocket under PPP - up 9c --- Anyone 'know' anything?

[upside_umop]

Just to note, I got booted out at $1.28 today after putting in a final sell order this morning. Probably shouldnt have...was going to hold through to be part of the excitment with all this cash to spend haha

Balance, thats interesting. I will post a number of companies that pay more in dividends than their reported NPAT.

Check out some property trusts...do you think they will continue paying dividends if writedowns cause their profit to decrease substantially or will they just let their cash build up?

[Billy Boy]

Check out some property trusts...do you think they will continue paying dividends if writedowns cause their profit to decrease substantially or will they just let their cash build up?
Most have their tenants locked in for some time so cash flow will
remain.
They may put up a special divvy or drop the DRP system. I hope they
do the latter. Else they could retire debt, as comercial interest rates have not dropped.
A great place to park surplus cash for the time being.
NAP is an interesting one !!
cheers BB :)

[777]

Are you trying to say that if a company has net profit after tax of say $100million and wants to pay a dividend of $120 million it can't?

Even if after the dividend is paid the company remains solvent.

Undistributed profits from past years would be able to be used. Otherwise how else is that profit get distributed in the life of a company.

[Billy Boy]

Surplus cash is usually distributed by a special divvy

[digger]

Maybe the decision of deferring the final Tui production well is because with oil at $45, its better to keep it in the ground, as many people have suggested.

So instead they can keep exploring in the meantime, and any new finds made will take a few years to develop, by which time oil should have recovered.


Certainly hope your reasoning is correct Mr Tommy as i would do that if i were the powers that be in the JV team.
Only yesterday some farmers were kind of saying how good it was that oil had come back in price.I got through to them very quickly by pointing out that if all the dairy farmers killed off there yearling and calves that for this year there cows would have more feed and would milk better.This would allow milk prices to fall and we would all be happy.It certainly won them over very quickly as farmers are well used of thinking about the future,and could see that the oil industry is currently killing off future oil flows regardless of how sweet it is for the very short present.
So yes lets keep it in the ground at under 60US
Digger

[the machine]

There is also the consideration that Umuroa can only handle five wells, so they wouldn't want to use up the last slot with a Tui well while there are still prospects which could be tied back. The 50.1 mmb of reserves was contingent on getting an extra production hole drilled. Now apparently the operator feels that they can get 50.1 at least from the existing wells, so it is a de facto upgrade. If none of the adjacent prospects works out, they can go back and drill Tui-4h later and report an increase in reserves at that stage.

Good confident announcement from DS. The market liked it.

are you sure umuroa can only handle 5 wells?

part of decision to defer the next production well is that production wells can be done a lot cheaper by a batch drilling process = more than one well.

expect 2009 exploration drills will result in a few extra production wells so cheaper to drill at same time.


if in the end they have to disconnect a field and thus reuse the slot on umuroa, then so be it - gives the field a rest and allow the oil to level out [reduce water cone]

provided umuroa runs on near maximum production then no problems and at the end of the day more oil is produced

also hows this for an idea - 2009 drill firms up another 50m barrels = another production vessel needed.



m

[bk]

Does todays close of $1.29 mean that the 5-month downtrend is broken? I am struggling to understand those nice charts Phaedrus is posting, but it seems so.

However, my prediction of $200 Oil by year end seems a little off, so don't take my word for it!

How long before the decreasing production catches up with the still falling demand, and prices will shoot back up? Maybe $200 oil by the end of 2009? Or has this proven that the economy can not stand oil at $150, so before the $200 is reached another market crash will happen? Interesting times for sure

[Sehnsucht888]

I agree bk, according to Phaedrus's chart in post #7365, 1.29 would indicate an upside break out, (assuming the lines don't move)..

Perhaps he can give us an update to confirm.

[manxman]

are you sure umuroa can only handle 5 wells?



AWE article for SPE news in 2006.


The turret incorporates 18 riser slots and is configured to accommodate production, gas-lift and umbilical risers for up to five wells in addition to spare slots for gas sales or injection lines. This allows for the currently planned four Tui Area development wells, plus capacity for the tie-back of one additional well, which could be utilised if one of AWE’s planned near field exploration wells results in a further discovery.

I suppose that if the drilling program yields more than one tie in candidate, there will be some very serious thinking. As DS put it on another matter "Nice problem to have."

[the machine]

AWE article for SPE news in 2006.



I suppose that if the drilling program yields more than one tie in candidate, there will be some very serious thinking. As DS put it on another matter "Nice problem to have."

thanks maxman, so 5 oil productions wells is the cap.

thus find some more oil [serious oil] and they need a another production vessel.

m

[Sideshow Bob]

Another good solid day for NZO, but all the action is over at PPP!!

Possibly confirming a breakout, as per P's chart?

Disc: Holder of both.

[Wiremu]

New Zealand Oil & Gas Ltd (NZOG) has disclosed to the NZX and ASX that by the close of
trading on the ASX yesterday it had acquired 5.77% of the issued shares of Pan Pacific
Petroleum NL (PPP).

NZOG is seeking to acquire a strategic stake in PPP so as to increase its exposure to the
attractive producing Tui area oilfields in offshore Taranaki. The two companies are joint
venture partners in Tui; NZOG with a 12.5% stake and PPP with 10%.

The shareholding is being acquired at a premium to the recent market price of PPP. NZOG
Chief Executive David Salisbury said NZOG believes it is paying a fair and attractive
price to achieve a meaningful shareholding in PPP.

PPP is an Australian company and Australian Foreign Investment Review Board (FIRB)
requirements restrict NZOG to a shareholding below 15% unless FIRB approval is received.

At this stage NZOG is focused on acquiring a strategic stake. In due course NZOG will
reassess its position to determine what, if any, further steps might be taken.

[Dr_Who]

Thanks for buying PPP guys. :D

[oldowl]

How big (%) is a strategic stake ?

[Casa del Energia]

How big (%) is a strategic stake ?

I guess we wait for the merry-go-round to stop. We are all mushrooms in this affair.

[fabs]

What 6-7 mil. Dollars out of the kitty, at a 50% premium?
A nice X-Mas present for someone.
Merry Christmas all

[upside_umop]

They are essentially swapping their cash, for cash in PPP.

Then on top of that, NZOG get more stake in TUI and the surrounding areas...

If they eventually take them over, which I believe they will try and do...it will cost them maybe $30-40 million dollar net...if that. We're getting a good deal over at PPP, but so are you guys...

I have my order in for 40 cents.

[fabs]

Correction, more like 12 Million.

[macduffy]

How big (%) is a strategic stake ?

With PPP directors holding in excess of 20% and an "alliance" with NZO in the person of the chairman, I would think that a strategic stake is pretty well there already.
NZO can buy up to 15% without FIRB approval so I'd expect them to aim for that unless the market runs away.

[friedegg]

brilliant i love it!!! theyre going to get this company cheaply and easily i think
they sold a lot back then at 26c and are paying more now
but ppp didnt have all that cash in the bank back then did they?

[Sehnsucht888]

Dominion this morning commetns that they need approval to buy more than 15%. But it also says they have applied for approval to buy more than 15%....

[Sehnsucht888]

"NZOG would not say how much of Pan Pac it wanted to buy but said it would need Foreign Investment Review Board approval to buy more than 15 per cent ironic when Pan Pac's main assets are its 10 per cent stake in Tui and about $150 million in cash holdings from Tui profits.

NZOG has already applied for review board approval. To buy more than 19.9 per cent, NZOG would need to make a full takeover."

http://www.stuff.co.nz/4796368a13.html


My concern is that if they don't go for a takeover, what is it going to do for liquidity of the share...

[digger]

"NZOG would not say how much of Pan Pac it wanted to buy but said it would need Foreign Investment Review Board approval to buy more than 15 per cent ironic when Pan Pac's main assets are its 10 per cent stake in Tui and about $150 million in cash holdings from Tui profits.

NZOG has already applied for review board approval. To buy more than 19.9 per cent, NZOG would need to make a full takeover."

http://www.stuff.co.nz/4796368a13.html


My concern is that if they don't go for a takeover, what is it going to do for liquidity of the share...

Each of us has to make up their own minds on the to sell or not to sell,that is the question sort of thing. If your in some finanical striff then sell to solve the bigger problem. I have just over 2 million of these fellows but will gamble on a full eventual takeover. Please note now that anyone following this as advice no not do so but think out your own position,as a full takeover is not currently on the the drawing boards and in fact may never happen.
Having covered my butt i will now say my thinking.
1/ Montana Wines was eventually fully taken out some years ago and i was the last to sell making me a very very tidy profit. My waiting it out was against everyone else's advice except my own.
2/ So far as of this very minute the only director release has been to increase holding. Always an interesting sign
3/ Nog taking out PPP in these very depressed times is money for jam. It is logical and will make for a better and bigger company and certainly buying into there best experience.Top marks to the directors for moving in this direction.
4/Cost to NZO will be miminual as PPP fully taken out almost funds inself with 150 million in the bank to start with.Also NZO buying more of the under rated TUI field which in time will be realised.


I will wait for a full takeover offer.Here i want a scrip based favourable exchange.
To sell or not to sell---that is your choice.
Cheers Digger

[Casa del Energia]

Each of us has to make up their own minds on the to sell or not to sell,that is the question sort of thing. If your in some finanical striff then sell to so..............

...... I will wait for a full takeover offer.Here i want a scrip based favourable exchange.
To sell or not to sell---that is your choice.
Cheers Digger

I think you may well be right. Otherwise - there is not much point to the whole excercise. (?)

[da puntzda]

so digger will you be buying more at this level?

interesting number of large trades in NZO itself today - pretty regular - in 250k or 500k blocks

[croesus]

Has anybody recently worked out the cash value ( ie banked money from Rts Issue, and Tui Oil) behind each NZO share.

Just Cash, not projected value of PRC or Kupe.

Also what financial commitments from NZO to finishing Kupe and PRC. ?

Thanks.
Croesus.
p/s Digger good for you to have the foresight to accumulate 2 mill .. PPP.

[the machine]

interesting that nzo had been looking for opportunities in this tight financial market - ie distressed seller etc./

but ppp do not fit into that - they are a company which is underrated and nzo have swooped and grabbed all the cheap shares out there.

when did nzo make their application to foreign review board - if this week then don't expect a decision in a hurry because of xmas holidays -you can write off a month.

but if they made the application weeks ago, then it must be getting near the rubber stamp approval stage



nzo could always buy more than the 15% before they gain approval - just take the risk they may have to sell them.


as already stated, no one would bother sitting on a minor stake in ppp and leave it at that - what is the point, therefore a full takeover will come into play.

i might look at selling some when [yes when] price gets to 40c au, but as under no pressure to sell any shares then am in no hurry.

don't own as many as digger though.

happy times ahead

M

[Nitaa]

Hi all.

I ave just been catching up on the latest news etc. I will go as far as to say that what nzo is doing with buying ppp has been suggested and predicted for over 1 year now. I will not be surprised if ppp starts buying a stake in nzo or awe start buying. Simply put if you belive in the tui permit then its an obvious aquisition.

With oil continuing to slide this bodes very well for nzo, ppp and other cash rich companies medium and longer term. Been off the seem for abut 3 weeks.

Without knowing the prices (perhaps others do an can advise) kupe gas contracts and prices (future as well) are to have likely been secured at extremely good prices given the current global meltown. Again for medium and long term holders of nzo this is simply fab.

I havent even looked at what is happwening with Pike but a significant drop next year compared to the current dizzy heights will be expected. Again this should be looked at a medium orlong term outlook. For short term investors there may not be in it for you.

discl. hold both nzo and ppp. On another note..3 weeks ago today i was fine and dandy. Since then i have been in hospital in Malaysia, had a brain tumor removed in Auckland last week and now hopefully on the road to recovery. My sincerest grattitude goes to all the wondeful people at Auckland Hospital that have done an amazing job. Life is great

[bermuda]

Nita. All the very best for a quick and strong recovery.Merry Christmas

[digger]

[QUOTE=Nita;23745 Hi all

discl. hold both nzo and ppp. On another note..3 weeks ago today i was fine and dandy. Since then i have been in hospital in Malaysia, had a brain tumor removed in Auckland last week and now hopefully on the road to recovery. My sincerest grattitude goes to all the wondeful people at Auckland Hospital that have done an amazing job. Life is great[/QUOTE]

My preverted since of humor says i knew all along you must be troubled with a brain tumor as about 6 months ago you disagreed with a comment i made.Please accept this as a weak joke and i hope for your speedy recovery.You are a valuable contributer on this site so do try to keep your health in top shape. God bless.
Digger

[Dr_Who]

All the best with your recovery Nita.

Oil futures collapsed this morning. :eek:

[Balance]

Bermuda,

NZO chairman's address to the AGM on 29 Oct. included these per bbl figures re Tui (in NZ$):

Production expense $17, Marketing $7, Dep and Amortisation $ 16

So cost before royalty and tax = NZ$40.

Using oil at US$45/barrel, royalty = US$5.6 or NZ$10.

Tax on profit = NZ$10.

All up cost and tax to NZO per barrel = NZ$60.

So profit to NZO = NZ$23/barrel.

Are the figures right?

If they are, Tui will need to be shut down if oil goes to US$30/barrel?

Oil price heading lower and now, UBS thinks can go as low as US$20.

Great move by NZO for PPP's shareholders!

Sell low, buy high!

[fabs]

The great Cinic Dr Who seems to get a x-mas present or two every day.

Happy X-MAS to all and a positive future to you NITA

[JBmurc]

Well sold my NZO the other day took the 40% profit which with Oil and oil&GAS sectors being massively sold off is something.
Already starting to reinvest funds into the sea of bargins which IMHO will return better short term gains than leaving in NZO
still holding half my PPP which will be sold if NZO want to pay some more 36c asx be great

How many other NZO,PPP holders looking to take some profits with oil at $38bbl

[QOH]

Hope your recovery is speedy.

[Casa del Energia]

All the best and wishing you a complete recovery, nita.

(Can't say the same for the oil price though).

[Nitaa]

Thanks to all for your kind words. Digger.. no problems there as they lefty behind my sense of humor. They may have taken away a bit of grey matter but its likely you will see some improvement.

Anyway.. back on the the topic. Still no end in sight of the drop in oil. I beleive this is presenting fantastic opportunities for nzo at present as ppp is one example. Although Balancew has a valid point about selling low and buying high. A bit too close to home for my liking there. Otherwise nzo could be the white knight for other juniors at discount prices.

[Sideshow Bob]

All the best for the recovery Nita - maybe with a bit of luck it might help your putting stroke!

[the machine]

as regards the final negotiations for tui 2009 drilling understand the Tan Kan IV is the semi that is planned to be used.
this rig is still in the caribbean so a tow to nz via capetown would probably take a couple of months.

in 2009 it is also supposed to have a major 5 week refit in geelong, including replacing the derricks and the tower.

as regards how many ppp nzo now own - expect it is now at the 15% cap since the price has drifted off.

in the end nzo will have pick these up dirt cheap and next 4.95% will be a lot more expensive, inturn a full offer.

M

[temptation]

Don't expect the PPP price to drift for long.. NZO haven't finished yet..
Assume that the NZO board believe;
1) There is still significant upside to Tui reserves
2) The POO will go back up (it doesn't matter what anyone else believes, this is probably what the NZO board believe).

NZO don't just want a strategic stake in PPP (a small company that doesn't pay dividends), they want PPP's 10% stake in Tui.

Having established their stake in PPP, NZO may let the PPP shareprice drift so that the remaining shareholders begin to regret not taking AU30c when it was on offer. But NZO will come back with a full takeover offer, and it will be better than AU30c (maybe AU30c + scrip which will effectively mean that NZO keep all their cash in the bank as the AU30c can be paid from PPP cash).

[digger]

Don't expect the PPP price to drift for long.. NZO haven't finished yet..
Assume that the NZO board believe;
1) There is still significant upside to Tui reserves
2) The POO will go back up (it doesn't matter what anyone else believes, this is probably what the NZO board believe).

NZO don't just want a strategic stake in PPP (a small company that doesn't pay dividends), they want PPP's 10% stake in Tui.

Having established their stake in PPP, NZO may let the PPP shareprice drift so that the remaining shareholders begin to regret not taking AU30c when it was on offer. But NZO will come back with a full takeover offer, and it will be better than AU30c (maybe AU30c + scrip which will effectively mean that NZO keep all their cash in the bank as the AU30c can be paid from PPP cash).
Agree with most of what you said,but think the full takeover offer if it comes will be some sort of cash + scrip or better all scrip at an attractive price.Offering all scrip has some advantages in that it allows currently PPP holders to keep their investment in TUI and get around taxable profit from selling ,as they in fact did not sell but merely exchanged the company that held their investment.The other advantage of all scrip is that it then allows NZO the bigger company to still go forward to other acquisitions as in this very negative times plenty of opportunits abound.
Digger

[AMR]

Is it permissible for NZO to buy and sell to themselves between their subsidaries in order to lower the PPP share price? I.e Stewart petroleum doing a large transfer to NZO at 20c.

[foodee]

Nita

Just catching up with the 'news' after 9 weeks away fishing.

Sorry to hear of your health issues, but being the 'fiesty figher'
you are I am sure you will make good.

Season greetings to you and other forum members

Cheers

[Bilo]

Agree with most of what you said,but think the full takeover offer if it comes will be some sort of cash + scrip or better all scrip at an attractive price.Offering all scrip has some advantages in that it allows currently PPP holders to keep their investment in TUI and get around taxable profit from selling ,as they in fact did not sell but merely exchanged the company that held their investment.The other advantage of all scrip is that it then allows NZO the bigger company to still go forward to other acquisitions as in this very negative times plenty of opportunits abound.
Digger

Hi Digger and seasons compliments
offering all script may have "some advantages" to PPP holders but NZO have to keep their shareholders and their share price in mind. Don't expect an early script offer once the 19.9% is attained. The NZO share value is not yet reflrcted in the SP, IMO less than PPP.

The weakening in NZO SP over the last couple of days does not consistently reflect the oil price but perhaps the concern over what a script offer would do to the NZO share price. I think once the position in PPP is re-estabished their should be a significant pause before any takeover offer.

[boysy]

i would beg to differ bilo the value attributed to tui for nzo is significant at around $0.50 or around $190 odd million for 12.5 % stake in tui so ppp share being 10 % should therefore be around $150 million. Add to this ppp cash of around 180 million and this is around $330 million / 588.6 million ppp shares = $0.56

PPP is in a much greater position due to leverage on TUI. PPPs current shareprice doesnt reflect the true value of ppp the same can be said for nzo though not to the same extent. The main difference being NZO have Kupe and Pike and a slightly larger share of tui.

If NZO sp seems undervalued do the maths behind PPPs sp .These two companies have too many synergies to point out i have held both over the years and hope that NZO do t/o ppp but that a fair scipt offer is arranged.

[digger]

I really want to congradulate NZO in getting its 15% share in PPP.It came cheap by using a sprinkling of cash in a depressed time just before christmas,so was well thought out.At the risk of some conceit it is just how i would have done it.In fact probably 35 % or thereabouts could be achieved using no more than the cash backing in the bank. Of coa-rse we all know that after 15% nZO needs AUS premission to go to 19.9% and then a TO above that.
If NZO wanted say only 35% this could be achieved by giving a low scrip offer and that is about where it will stall. To get all PPP's money into NZO hands to pay for the TO a full 100% acceptance has to be achieved.
My guess is that if a TO is to happen[always no guarantees] it will be completed before end of march.I say this will happen soon as NZO needs to complete this well before the world finances turn around so to complete more acquisations while the world is still depressed.
I will point out that some months ago i was against NZO doing acquisitions for another couple of years,but the world finance crises has been sudden and made a new ball game that we need to acted upon now and in the near future before things just as suddenly change again.Especially i see this happening with the price of oil.
The best for christmas ,Digger

[KentBrockman]

... My guess is that if a TO is to happen[always no guarantees] it will be completed before end of march....

It seems to me that there is a likelyhood of NZO attempting to do a takeover on the cheap. This may not be a smart move. A takeover offer needs to be outright convincing, a low ball opportunistic offer runs the risk of not being successful.

Have a look at Cooper's recent takeover attempt of Incremental. They tried an opportunistic low ball offer and are now stuck with a quarter of Incremental, without control and without having access to Incremental's cash flow.

[fish]

It seems to me that there is a likelyhood of NZO attempting to do a takeover on the cheap. This may not be a smart move. A takeover offer needs to be outright convincing, a low ball opportunistic offer runs the risk of not being successful.

Have a look at Cooper's recent takeover attempt of Incremental. They tried an opportunistic low ball offer and are now stuck with a quarter of Incremental, without control and without having access to Incremental's cash flow.

My thoughts about this takeover reflect a very limited experience of nz takeovers-eg TTP and Shell/Fletcher energy -and I could easily be wrong in this situation.

NZO might now has control of the actions of ppp through this 15 % stake and that held by its directors-?havnt some been buying big stakes recently . That might be sufficient for its purposes at the moment .

If I compare it to the TTP takeover of minority shareholders all that needs to be done is for PPP to pay no dividends ,spend ppp cash on overseas assets-and the rest of the shares could come cheaply !
Of course I could be completely wrong and they could do a shell-make a big offer that wont be refused !

[digger]

My thoughts about this takeover reflect a very limited experience of nz takeovers-eg TTP and Shell/Fletcher energy -and I could easily be wrong in this situation.

NZO might now has control of the actions of ppp through this 15 % stake and that held by its directors-?havnt some been buying big stakes recently . That might be sufficient for its purposes at the moment .

If I compare it to the TTP takeover of minority shareholders all that needs to be done is for PPP to pay no dividends ,spend ppp cash on overseas assets-and the rest of the shares could come cheaply !
Of course I could be completely wrong and they could do a shell-make a big offer that wont be refused !

The hole in this arguement is that PPP directors have a large stake in the company,so why would they engineer it to destroy market preceived value to get taken out cheaply.It would make since if directors had no stake in the company.Also NZO needs all of the company to have the assets of the company---the cash in the bank and the acreage in place and future assets.
Digger

[sideline]

The hole in this arguement is that PPP directors have a large stake in the company,so why would they engineer it to destroy market preceived value to get taken out cheaply.It would make since if directors had no stake in the company.Also NZO needs all of the company to have the assets of the company---the cash in the bank and the acreage in place and future assets.
Digger

Maybe the main aim for the moment is to get control between NZO and the friendly PPP directors
above 50.1% - that's enough to control the company and prevent any other predators on getting their
hands on PPPs cash on the cheap.

I remember a NZO AGM years back where TR was asked why NZO was still holding PPP shares and
he answered along the lines: NZO's interest in TUI was only 12.5% and together with PPP's 10% it made
a more meaningful stake. He said the cross holding was important to block any cheap takeovers of PPP ..

[fish]

The hole in this arguement is that PPP directors have a large stake in the company,so why would they engineer it to destroy market preceived value to get taken out cheaply.It would make since if directors had no stake in the company.Also NZO needs all of the company to have the assets of the company---the cash in the bank and the acreage in place and future assets.
Digger

Hi Digger ,
All I know is that companies can play all sorts of games when they have control of a company-SEA /TTP was in a similar position of majority control,lots cash in the bank-which they spent in Hong kong- and managed to get the minority shareholders out cheaply-well under NTA -the game took many years to play out .
Once nzo have control of PPP they dont need to make a complete takeover-just wait long enough and more of the shares can be bought cheaply . In a few years time they take out the few remaining minorities-including the director shares at a much greater price-if i remember ttp took out a lot of the minorities at 44 cents or less and then the remaining shareholders were offered more a year or two later (a few of us got more through arbitration-which TTP appealed against and lost )

[777]

Oil back up to $40 pb.

http://www.bloomberg.com/markets/commodities/energyprices.html

[Lion]

Oil back up to $40 pb.

http://www.bloomberg.com/markets/commodities/energyprices.html

That WTI price shows a 23.7 % increase overnight!! This is huge, even in the current volatility.

Here's another interesting figure . . .
"World oil demand will average 86.6 million barrels in the first quarter of 2009, down 0.2% from a year earlier, before recovering to unchanged in the second quarter, the International Energy Agency said in a December 11 forecast."

So this is demand destruction?? Down just 0.2% then unchanged!

Well my opinion (and I'm sure it's no worse than many so-called experts and commentators) is there's a big rebound coming in the oil price, and quite soon.

Happy New Year everyone.

[Balance]

Oil drops from US$145/barrel to under US$100/barrel.

Along the way down, many keep on screaming -'It will reverse soon. Buying opportunity.'

Any bounce, however small, is greeted with - 'Told you so! It's reversing!'

Meanwhile, oil continued its drop - to under US$40/barrel.

Be careful. Be very careful

Heard the same thing back in the late 1990s and early 2000s.

.

[Nitaa]

Oil drops from US$145/barrel to under US$100/barrel.

Along the way down, many keep on screaming -'It will reverse soon. Buying opportunity.'

Any bounce, however small, is greeted with - 'Told you so! It's reversing!'

Meanwhile, oil continued its drop - to under US$40/barrel.

Be careful. Be very careful

Heard the same thing back in the late 1990s and early 2000s.

.Balance. Seems like a little scaremongering and perhaps you are looking for another entry into this fairly solid stock.

Most of what you have said above have to a small degree already caught out the ones who thought prices have rebounded etc. In saying that without looking at raw data i beleive nzo has gained sometrhing like 10% this year. What makes this stock so attractive is the BALANCE (no pun intended) SHEET along with Kupe and future prodution and potention of tui permit. Pike has likely been overstated and most will know and expect next year coking coal prices to take a savage beating. All in all i think investors will need to be more careful of other investments or stocks rather than their holdings of nzo. Just my opinion of course.

Happy New Year to all

[Crypto Crude]

boy, some of these oilers are absolutely amazing, even at $40US per barrel...
Prime time picking...
oil has discounted these stocks to amazing lows that wont be held...
oil futures through the roof...
NZO is as good as it gets...
get positioned for oil in 2010 (now), and a full 2009 program for the likes of NZO...
top 5 pick here...
:cool:
.^sc

[duncan macgregor]

SHREWDY, Happy new year mate. You are still a bit of a worry with your attitude to investing you seem to think logic controls the market. ITS FEAR GREED AND MANIPULATION that fixes the prices, once you understand that you will be a much wiser investor. Lets take your NZO for instance its what comes back into your pocket that counts which has very little to do with basic fundamentals. WHOOPEDOO the share price increased by 10% or whatever in 2008 as the market crashed but over a period of four years its done nothing.
Lots of people lost lots of money buying and converting options. They couldnt or wouldnt be told otherwise writing pages of crap about peak oil, when the only thing influencing any commodoty is market manipulation, and market sentiment. You study the company, i study the market, until you understand the difference you wont do any good when the market turns on you.
Study the commodoty price charts, then the company best fitted to take advantage. Know when to hold when to fold know when to walk away know when to run. You were caught with an illiquid share and lost half your stake bleating on about how right it is, and the market got it wrong.
Learn from that, dont do it again, remember its the market that judges rights from wrongs, not you or me bleating on with fundamental crap. Take some TA lessons from PHAEDRUS and forget this fundamental SNOOPY investor type bullsh*t. I doubt very much that i will be back in the market this year, unless the commodoty charts show buy signals so good luck this year mate, feel free to give me a blast now and again. Macdunk

[Crypto Crude]

Mackdunk,
Dont even get me started on housing, or CUE... Im sweet about the first major hit ive taken in 5 years...I even called that I needed a kick in the pants...I could have lost the lot a few times, especially my all in play on MEO which I would have lost the farm and made 10%... still I stand accepting that buying a house would have been a major stuff up for me.....whats your overall point....
mackdunk gave me one major pointer in his post and I read it carefully...


You study the company, i study the market

I take that to heart deeply when I start looking for job...
so why should I look to the market when I should look to the company...
ok ok ok...

I will make a proper reply on another thread another time...
lets not drag these savy nzo holders...
They outsmarted both of us id say.....
http://www.sharetrader.co.nz/showthread.php?p=238344#post238344
:cool:
.^sc

[peat]

http://www.google.com/images?q=tbn:IR3vXl8eybhZ5M::musicalstewdaily.file s.wordpress.com/2008/07/broken-record.jpg

[winner69]

http://www.google.com/images?q=tbn:IR3vXl8eybhZ5M::musicalstewdaily.file s.wordpress.com/2008/07/broken-record.jpg


ah .... just like a broken record eh

[digger]

http://www.google.com/images?q=tbn:IR3vXl8eybhZ5M::musicalstewdaily.file s.wordpress.com/2008/07/broken-record.jpg
Good one Peat.I had a good laugh.

[Nitaa]

http://www.google.com/images?q=tbn:IR3vXl8eybhZ5M::musicalstewdaily.file s.wordpress.com/2008/07/broken-record.jpg
Very funny indeed. I believe it was a 45 and not a 33. The song title was "One Track Pony".

Happy new year Macca and give me heaps if you want

[arjay]

Anyone else get fooled into thinking this article was about a fix for the gas flaring?

http://www.stuff.co.nz/4809223a13.html

[manxman]

Anyone else get fooled into thinking this article was about a fix for the gas flaring?


Naah. Thats the TUI with the gorgeous wimmin. We get Tony Radford.

[Dr_Who]

Anyone else get fooled into thinking this article was about a fix for the gas flaring?

http://www.stuff.co.nz/4809223a13.html

I wasnt looking at the girls in the picture... yeah right! :eek:

[777]

Does this mean anything to anybody.

NZO
05/01/2009
RELINT

REL: 1527 HRS New Zealand Oil and Gas Limited

RELINT: NZO: Disclosure Notice

Ongoing Disclosure Notice:
Disclosure of Directors and Officers Relevant Interests
Section 19T(2), Securities Markets Act 1988
End CA:00174822 For:NZO Type:RELINT Time:2009-01-05:15:27:39

[Sehnsucht888]

777 - not much. There is more detail on the ASX NZO code. Has to do with changes for TR as part of the ESOP

http://www.stocknessmonster.com/news-item?S=NZO&E=ASX&N=312111

[777]

Sort proves how useless the NZX is when it allows an announcement that says nothing be published. Don't they read them before they publish them?

[biker]

Just the arrogant NZX change of strategy - Announce the headline to the market and force the punters to go to their web site for the details.

[777]

I think it is about time we used trade-me for share trading and bypass the NZX. It must be feasible.

[Dr_Who]

Just the arrogant NZX change of strategy - Announce the headline to the market and force the punters to go to their web site for the details.

I agree. Why not just post it up?

I would deal shares through trademe if it is set up. Cant me worst then the NZX. Not only are there hardly any companies on NZX worth buying but their complacency and tardiness is a turnoff.

[shasta]

I agree. Why not just post it up?

I would deal shares through trademe if it is set up. Cant me worst then the NZX. Not only are there hardly any companies on NZX worth buying but their complacency and tardiness is a turnoff.

With the aussie dollar heading back up, probably time to look at ASX stocks again.

Agree though, why cant the NZX make announcements like stockness does, or even the ASX using PDF!

[Dr_Who]

I have been buying one particular aussie stock and have a number on my watchlist. The only NZ stocks I have on watchlist are potential shorters. Sad, but a reality.

[Sehnsucht888]

With the aussie dollar heading back up, probably time to look at ASX stocks again.

Agree though, why cant the NZX make announcements like stockness does, or even the ASX using PDF!

Stockness has as little information as Direct Broking has for this announcement. Its an NZX vs ASX thing plain and simple. I think the ASX do most of their announcements as PDFs, but the NZX do both and don't allow general access to attachments - its free, but something to make it difficult to get the information for other parties...

Any way, modest volumes on NZO going through with intraday gains, and then coming down later in the day. Good to see it holding up at present.

[friedegg]

it never seems to take advantage of the overseas run ups on energy stocks though,what would the main reason for this be?

[Dr_Who]

I am surprise NZO sp has not moved up.

[AMR]

I am surprise NZO sp has not moved up.

Methinks the possibility of being made to pay up for PPP, either thruough script or cash is keeping the price down.

[the machine]

some of ppp's stranded gas assets might come into play following this announcement by santos ie corvus

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00918077

M

[digger]

Methinks the possibility of being made to pay up for PPP, either thruough script or cash is keeping the price down.

Me think it is somewhat different. If NZO made a cash offer tomorrow and as soon as the market factored it in the SP would rise.It would also rise if a scrip offer was made and factored in. So there we have it---the market has never liked uncertainty and has always punshed non decision from whatever reason as negative.
My guess is about 19 jan NZO will probably be in a position for its next move.By then most of the summer holidays have been accounted for or fully planned so action will not likely happen until mid this month. If NZO does take out PPP it would be best IMHO if it is completed end of February to allow for a second takeover of some other company prior to the general oil market lifting once the world wakes up to the simple fact that no new oil will get developed in the oil price range of recent times.
So we still have a bit of time for whatever if my thinking is about correct.This cookey is going to crumble for sure i just do not know exactally how or when.
Digger

[Wilkins_Micawber]

Me think it is somewhat different. If NZO made a cash offer tomorrow and as soon as the market factored it in the SP would rise.It would also rise if a scrip offer was made and factored in. So there we have it---the market has never liked uncertainty and has always punshed non decision from whatever reason as negative.
My guess is about 19 jan NZO will probably be in a position for its next move.By then most of the summer holidays have been accounted for or fully planned so action will not likely happen until mid this month. If NZO does take out PPP it would be best IMHO if it is completed end of February to allow for a second takeover of some other company prior to the general oil market lifting once the world wakes up to the simple fact that no new oil will get developed in the oil price range of recent times.
So we still have a bit of time for whatever if my thinking is about correct.This cookey is going to crumble for sure i just do not know exactally how or when.
Digger

I think this (from NZOs website) might help remove some uncertainty...

NZOG reaches 15% strategic stake in PPP
23 December 2008
NZOG has ceased buying further Pan Pacific Petroleum (PPP) shares. While FIRB approval is being sought NZOG has no current intention to purchase PPP shares beyond the present level.

[fish]

Methinks the possibility of being made to pay up for PPP, either thruough script or cash is keeping the price down.

I think the best way NZO can boost the sp and reward loyal sharehoders is another special dividend

We are awaiting the december quarterly cashflow-should be about 30 million from tui which adds to the first quarter (72 million from tui ) makes over 100 million for first 6 months .

A 5 cent dividend costing a mere 19.8 million would barely lighten nzo massive cash hoard which now includes currency gains and interest .

[Nitaa]

Tui fields produce 20 millionth barrel
2:00PM Thursday Jan 08, 2009



The Umuroa oil tanker at Tui, 50km off the coast of Taranaki. File photo
The 20 millionth barrel of oil has been produced from the Tui area oilfields in offshore Taranaki.

And for the first time a shipment of Tui oil is to be sent to the Marsden Pt refinery, near Whangarei, to be refined in this country .

Production from the fields started about 18 months ago at the end of July 2007, and Tui output has been the major factor in a big jump in oil exports.

Statistics New Zealand valued crude oil exports at $2.89 billion in the year to November, while oil exports lifted sixfold in the first year of Tui production to the end of July.

New Zealand Oil and Gas (NZOG), which has a 12.5 per cent stake in Tui, said the 20 millionth barrel was produced today.

The fields were estimated to have about another 30 million barrels of proven and probable reserves.

That estimate of remaining reserves followed several upgrades of the amount thought to be in the fields. It was more than the 27.9m estimate of the total amount before production started, NZOG said.

AdvertisementThe oil was shipped by tanker to refineries in Australia and southeast Asia, with several shipments having also been sent to Hawaii. This month the first shipment would go to Marsden Pt.

Dennis Washer, the New Zealand general manager of Tui fields operator Australian Worldwide Exploration (AWE), said oil from Tui had not gone to Marsden Pt previously because of the nature of the product.

Marsden Pt was originally configured for non-waxy crude, while that from Tui was a more waxy product, he said.

The refinery had decided to trial a new product and probably blend it with some other crudes.

If the Tui oil blended well with other crudes and the price was right, hopefully the Tui consortium could look forward to further sales to Marsden Pt.

The Tui area oil fields include three producing reservoirs, Tui, Amokura and Pateke and lie 50km off the Taranaki coast. Oil is produced from four wells, through a floating production, storage and offloading vessel, the Umuroa.

AWE has a 42.5 per cent stake in Tui, Mitsui has 35 per cent, and Pan Pacific Petroleum 10 per cent.

- NZPA

[scamper]

Can you hearing the market yawn (set it to Les Mis. music).
Is this later than expected?
Not as much as expected?
Or is it just not the time for punters...

[Nitaa]

The tui operations is a raging sucess imo. This has been in stark contrast to pike. Remember how long (or how short) it took for the jv to bring tui to production. At least ill aise my glass to this one

[boxburger]

our fiscal Earth is interesting at the moment.

I believe that it currently costs about US$75 to find and get a barrel of oil to market.

OPEC find themselves in a multi-faceted hole. Once, a lip-service announcement that they were making a production cut was reason enough to see a spike in the barrel price.

They’re only human. In July 08 if we had of told them that in 6 months the barrel price would be below $40, they would of laughed at us. I would of laughed too, I would of lost the farm.

Being human, they’ve made commitments based on oil prices never getting to the level they are at now. Schools, hotels, roads, hospitals etc. They’re half built. More than ever, I think OPEC are needing to lie about how much poo is actually being pumped into tankers.

Within the greatest crude hog, they aren’t using so much. How little was a surprise, the US stockpile surplus report saw the price dip lower.

Not so long ago in the US, not only could you get a 100% home loan, in an upward marketing spiral, there were all sorts of add-ons. Eg: The home and a brand new Chevy Silverado on zero deposit. It would seem that lots of these trucks are sitting out the back of mortgagee auction homes on blocks. Their ‘Versace Package’ wheels and tyres for sale on ebay.

Not so long ago, I read a quote in here, it was something like “ The world uses about 80 million barrels a day. A few left over is reason for a party, a few short, a catastrophe.” That makes sense to me.

I live in the coastal Far North, property prices and sales numbers are really struggling. There is only so much land, right on the beach. It’s a desirable finite resource, I’m looking at the barrel price just as hard as the beach-front places for sale up here just now.

I’ve developed a radar for ‘Mortgagee Auctions’. There’s the place at #39 Sherwood, a dump right on the beach at Coopers and NZO.

Just exactly when the ‘uh-oh’ oil-bug bites us really hard on the bottom, I’m not sure, but I feel it’s arrival is a coming.

I’m very comfortable with my holding in NZO, if I had funds at hand, I’d get more. I think the fundamental reason for my comfort is my belief that we’re looking at the near bottom of barrel prices, in a horror show, $30. The upside is the sky.

I believe now that we’re near base levels, more news like, ‘US surplus’, ‘Venezuela pumping a secret 50 million barrels’ etc will have a minor downward effect on barrel prices. I think the election of a US president with a dove in his hand rather than a Colt has had a depressive bearing on recent barrel prices.

On the other hand, I believe news or circumstances that would force the price of oil upward would induce a lovely NZO shareholder’s fortune improvement.

What would happen to the oil price, overnight, if there was a press release from an OPEC member? “We’re fed up with what’s happening in the Gaza strip and we’re getting involved.”

There are many prospective scenarios, any of which could see the crude price pull back a further buck or 2 or rise 10 or 50. I like the current oil price and I like my perception of NZO’s current activity. To my way of thinking, they’re having an aggressive nibble, exactly as I’d be playing it in the current climate. I’m status-quo happy.

[friedegg]

except i see some ppp holders are getting greedy,they piss me off cause thier sp is at an all time high because of us:D

[boxburger]

It feels like yesterday I was flipping a yes/no PPP coin, it was 5 cents a share. To my hindsight horror, it came up tails. NZO were about where they are now, a 3 year PPP holder is looking way prettier than a longterm NZO pundit, I hear you. I still believe, sometime before I'm too old to enjoy it, oil followers will prosper, regardless of the Brand. If I die too soon, that's cool, it will be with the distant promise of hope in my eyes and a wry smile of contentment on my mug. The quality of our lives has little to do with money, although enhancements don't go astray!

I had a hell surf at Taupo Bay today, while I was out there, I thought to myself 'Where else would I rather be right now?' Monaco Casino? Driving a Lambo? In bed with Kate Hudson? I wanted to stay there. Out the back with clean sets running through, a few fellow surfers that were up for a chat. Priceless.

[the machine]

except i see some ppp holders are getting greedy,they piss me off cause thier sp is at an all time high because of us:D


actually ppp hit au 38c in july 2007


own a heap of ppp and a heap of nzo

M

[boysy]

New Zealand Oil & Gas Ltd (NZOG) has been told by the Australian Foreign Investment
Review Board that it has no objection to NZOG increasing its stake in Pan Pacific
Petroleum (PPP) in terms of the Australian Government’s foreign investment policy.

In December NZOG acquired a strategic stake in PPP and now has voting power of 14.865% in
PPP (as determined under the Australian Corporations Act).

Ahead of acquiring the stake, NZOG applied to the Australian Foreign Investment Review
Board (FIRB) to acquire up to 19.99 per cent and/or all of PPP.

In due course, NZOG will assess its position to determine what, if any, further steps
might be taken.

[777]

And the price of NZO drops.

[the machine]

dow sliding 3 % does not help

m

[boysy]

well in the mean time nzo must of sorted out their strategy in the meantime wonder what is happening behind the scenes.

[the machine]

well in the mean time nzo must of sorted out their strategy in the meantime wonder what is happening behind the scenes.



placing funds with stockbrokers so can snap up another 5% quicksmart.

M

[peterfindlay]

The Tapis price which Tui oil is sold against has currently reached a very significant premium of more than $US10 over the WTI reference price. However, to NZOG shareholders misfortune, WTI always seems to be the 'market price' quoted, with the share price reacting to the almost daily movements in WTI, without understanding the increasing divergence between the price of Tapis & WTI. In addition, there now seems to be differential in the price of crude going into North American market and other markets. Brent is now approximately $US5 above WTI.

The NZ dollar has also weakened significantly this week, increasing the value of NZOG's substantial US$ holdings and raising its revenue in NZ dollar terms. So while the market talks about a 'down' week for oil, it's actually been a positive week for NZOG's income.

[the machine]

The Tapis price which Tui oil is sold against has currently reached a very significant premium of more than $US10 over the WTI reference price. However, to NZOG shareholders misfortune, WTI always seems to be the 'market price' quoted, with the share price reacting to the almost daily movements in WTI, without understanding the increasing divergence between the price of Tapis & WTI. In addition, there now seems to be differential in the price of crude going into North American market and other markets. Brent is now approximately $US5 above WTI.

The NZ dollar has also weakened significantly this week, increasing the value of NZOG's substantial US$ holdings and raising its revenue in NZ dollar terms. So while the market talks about a 'down' week for oil, it's actually been a positive week for NZOG's income.


well put.

nzo's website re tui, inturn average tapis price in usd$ / nz$ gives good indication of profit margin pre tax

M

[the machine]

if nzo was not behind buying on friday [.8% of stock traded] then it should be a concern for them as indicates another party is building a decent holding.

if nzo were the party buying then one would assume volume will continue on monday, inturn the 1% variation notice will trigger -that should spur the sp along

M

[boysy]

as you mentioned the volumes going through are no where like the buying before the newyear from nzo but significant parcels are changing hands.

[fish]

[QUOTE=the machine;239967]well put.

nzo's website re tui, inturn average tapis price in usd$ / nz$ gives good indication of profit margin pre tax

Would be very interesting to see predictions for the last quarter profit-which NZO will announe in the next couple of weeks .

I remain optimistic that the profit for the 1st 6 months will be more than enough for another special dividend !

[the machine]

[QUOTE=the machine;239967]well put.

nzo's website re tui, inturn average tapis price in usd$ / nz$ gives good indication of profit margin pre tax

Would be very interesting to see predictions for the last quarter profit-which NZO will announe in the next couple of weeks .

I remain optimistic that the profit for the 1st 6 months will be more than enough for another special dividend !


ppp pre-emptive defgence re possible takeover gives good indication re earnings - but of course nzo have kupe to fund and that would have used nz$20 - 25m capital in last quarter.

thus earnings in last quarter would be about same as costs.

1st quarter was huge - will it be enough to warrent a special dividend?

my own view is no - any dividend to wait until full year would be best.

m

[the machine]

also fish - you have said you have a very large nzo holding - but made no comments that we are aware of re the ppp play - do you have any ppp and commerntsre pppplay?

regards

M

[Bixbite]

also fish - you have said you have a very large nzo holding - but made no comments that we are aware of re the ppp play - do you have any ppp and commerntsre pppplay?

regards

M

When the 1st generation mobile phone was on market. It represented a personal status. People felt they were superior when carrying one in hand. Actually the size of the phone was very big. It was big enough to be modelled as a water bottle for children. Almost everyone carried one to school.

Mr. Li Ka Shing – the boss of the mobile phone company – Hutchison, didn’t find the need to carry one.

Cheers

[fish]

also fish - you have said you have a very large nzo holding - but made no comments that we are aware of re the ppp play - do you have any ppp and commerntsre pppplay?

regards

M

Hi Machine

I dont own any PPP .
The current ppp play so far is clearly a win win situation .
It is a low risk investment to accumulate more oil reserves .
I do believe nzo should keep accumulating at current prices but should refrain from paying more than they need-in the current market many holders of ppp may be forced to sell at below the underlying value of cash plus assets .

[the machine]

Hi Machine

I dont own any PPP .
The current ppp play so far is clearly a win win situation .
It is a low risk investment to accumulate more oil reserves .
I do believe nzo should keep accumulating at current prices but should refrain from paying more than they need-in the current market many holders of ppp may be forced to sell at below the underlying value of cash plus assets .


thanks fish

of course nzo could not count them as reserves until they t/o ppp and to do that will take a lot more than
"paying more than they need-in the current market'

as regards ppp sellers being forced to sell - expect these are long gone and nzo snapped up some real bargain shares [including a lot at below ppp cash position.

see on the ppp thread a report of a lot of small trades on asx and since nzo have not reported any more purchases beyond the 1% trigger then sounds like someone else is building a stake, ready to make a tidy profit.

if nzo are to t/o ppp then the sooner they aquire the 19.95% pre-takeover level [at a low cost the better.

tapis is trading at a significant premium to wti and trending up -

the window of opportunity for a cheap t/o may soon be clouded by a rising oil price, quarterly reports and/or new tui drilling campaign - all of which will add to ppp price.

reindeer gas development change of decision by santos last week brought corvus back into play [an otherwise stranded gas asset that is 400m + thick as open at depth

M

[flyingmariner]

I have held NZO since it was .36 and would buy a ton more but I'm at a loss as to why the price remains around 1.20 in the face of every oil index looking like a rout coming along?
I know all the forward futures contracts are $50+ now but why does everyone insist that OPEC cuts will keep oil in the mid 30's when history proves they are unable to hold prices when supply is over and above demand.
At Cushing in Oklahoma they are running out of storage and the same must be close for tankers. In the US right now you can't give away petrol and use is dropping month to month.
I've noticed in the past that share prices in NZ don't always follow overseas indexs and I put that down to NZ investors showing a lot more resistance to panic selling but still my question is "Why does the SP of NZO not fall dramatically along with the price of oil"..........................is it the cash position?
Conoco Phillips came out with some ugly numbers on Friday and the theory is other big oil companies will possibly do the same.

[dsurf]

Only my opinion of course but I would say it relates to the fact that of the three main projects the vast majority of Capex has already been spent. This leaves large cash reserves, only opex costs to worry about which are low enough to generate a profit even with the price of oil , coal etc at low levels versus last year. For example the operating costs for the Tui field are less than $US 20. The Opex for the coal mine is about $35 US. The Kupe numbers are more problematic but they have gas offtake agreements at "market", which suggests they will have to be profitable for the long term.

Then there is the upside potential - commodity prices recover, more oil / gas found in exploratory areas, coal reserves set to increase when extra seam drilled etc.

This company prints money currently and will be revalued when investor sentiment turns eventually away from zero risk zero return investing.

[flyingmariner]

Well that does make sense and I guess it does put a floor on the SP
Also noticed that several analysts rate it as undervalued (not that I put much store in that) Sitting on the side lines waiting as there is going to be more shocks coming out of the US with alot of people expecting the Nov lows to be tested. If that happens then some investors may be frightened out of NZO.

[Nitaa]

Lets face it.. we are hearing it from all quarters. Things will get worse before they get better. i.e. Coking coal prices falling, unemployment rising and so on. IMO unless there is something unexpected we are unlikely to make any short term gains in SP. Long term value is nor in question i dont think from anyone. The question will be are you prepared to wait it out for a few years?

Pike: Viable at around $US80p/t, It may end up0 shutting down for a year or 2 but the reserves are still there and will make plenty of money for teir owners over time.

Kupe: I thought the JV have fixed contract prices that is tied into the cpi. If i am not mistaken these prices were locked in before the commodity pr4ices started crashing. This prices great revenue for at least 15 years plus extras.

Tui: The JV have made a bomb already out it with high oil prices in the first 12 to 18 months. Tie-ins and upcoming drilling will add to the Yui reserves and will continue to strengthen NZO's position.

Blance Sheet: This cannot be overlooked as NZO is becoming stronger while other cash strapped explorers are heading into oblivion. Opprtunity to pick up cheap assets in the next year or 2.

Other factors in my thinking. NZO including Tony Radford and Allen Tatterfield know the value and potential far better than 99.9% of the shareholders. As for Allen, all the dots are lining up nicley and he has a blocking stake and to an effect hold nzo to ransomfor any potential takeover. Not forgetting that Tony Radford is not gettingt any younger and has a nice holding of NZO. For me he will also be looking at an exit stratergy sonne rather than later. How this one plays out i have no idea. Rest assured he will want full value for his shares.

[Casa del Energia]

Lets face it.. ....
.........
this one plays out i have no idea. Rest assured he will want full value for his shares.

Yes - long term. Me too. Probably a timely reminder is in order:

Peak Oil.
Peak Coal.
-- And for the really radical thinkers :-
Peak food.

The above is only masked by current economic behaviour commonly known as:

Peak Stupidity.

[BigBob]

Yes - long term. Me too. Probably a timely reminder is in order:

Peak Oil.
Peak Coal.
-- And for the really radical thinkers :-
Peak food.

The above is only masked by current economic behaviour commonly known as:

Peak Stupidity.

You forgot peak water...!

[dsurf]

Contact are moaning about a 25% increase in gas costs denting profits. No idea what the offtake agreement contains re: pricing but definately going NZO's way as is the currency. pity the SP dead in the water

[Casa del Energia]

You forgot peak water...!

Yes! I forgot about that - even for NZ, it's getting on the critical path. (I'm certain Marlborough looks more desert like every time I drive thru). All the more reason to view commodities in general as long term mattress stuffers.

[777]

There has to be a time soon when the market realizes that oil is now over $40pb. and with the dollar falling prompt them into pushing the share price up. Picked up some more at 1.22.

[boysy]

and remember tapis has a price premieum to wti

[Paddie]

There has to be a time soon when the market realizes that oil is now over $40pb. and with the dollar falling prompt them into pushing the share price up. Picked up some more at 1.22.

I agree and because of the above, and strong rally by the Dow, thought that we would see a reasonable lift in NZO's shareprice today, but not to be.

Paddie

[boysy]

the uncertainty surrounding ppp could be a major factor ? Nzo havnt clarified what they plan to do with their strategic stake what this means and why they purchased it.

[Paddie]

the uncertainty surrounding ppp could be a major factor ? Nzo havnt clarified what they plan to do with their strategic stake what this means and why they purchased it.

You maybe right, but one would think that it would be considered by most as being positive to pick up another 10% of Tui, plus with more drilling and potential upgrades, some sizeable upside ahead?

Paddie