NZ Oil & Gas (NZO)

[Unicorn]

I really would appreciate seeing a valuation from experienced masters of valuation -like waihoek or unicorn .

Sorry Fish, but I think there are too many wildly fluctuating variables at present to produce a meaningful valuation at present ...
1. Price of oil, looking forward could be anything (up 30% last month!)
2. NZ$/US$ exchange rate (from memory anything between 82c and 48c in the last year)
3. Value of PPP and PRC holdings (with quite a bit happening on both fronts)
4. Value of cash holding (exchange rate impact, plus what will be done with all the money)

In these volatile times, I think it is more important to look at where the economy, and NZO, are headed - rather than to calculate figures based on very suspect base assumptions.

I think that increased energy (oil) consumption is necessary to come out of the recession, so oil companies are a good place to be invested at this point in the cycle. I am happy with the way the cash in bank has been handled - time is the enemy of those who are short of capital and are burning cash. Increased price of oil does not save them prior to production, so there is no rush to spend the war chest. It takes the technical team some time to evaluate prospects, which is a far better approach than just taking a punt. There are some great drilling prospects coming up later this year - I remain very positive about further finds in the Tui permit. Kupe and Pike are not far away from delivering substantial income streams.

I am quite happy with what NZO has done in the last year. And I am looking forward to the next 12 months with as much confidence as can be expected in this climate.

[fish]

Sorry Fish, but I think there are too many wildly fluctuating variables at present to produce a meaningful valuation at present ...
1. Price of oil, looking forward could be anything (up 30% last month!)
2. NZ$/US$ exchange rate (from memory anything between 82c and 48c in the last year)
3. Value of PPP and PRC holdings (with quite a bit happening on both fronts)
4. Value of cash holding (exchange rate impact, plus what will be done with all the money)

In these volatile times, I think it is more important to look at where the economy, and NZO, are headed - rather than to calculate figures based on very suspect base assumptions.

I think that increased energy (oil) consumption is necessary to come out of the recession, so oil companies are a good place to be invested at this point in the cycle. I am happy with the way the cash in bank has been handled - time is the enemy of those who are short of capital and are burning cash. Increased price of oil does not save them prior to production, so there is no rush to spend the war chest. It takes the technical team some time to evaluate prospects, which is a far better approach than just taking a punt. There are some great drilling prospects coming up later this year - I remain very positive about further finds in the Tui permit. Kupe and Pike are not far away from delivering substantial income streams.

I am quite happy with what NZO has done in the last year. And I am looking forward to the next 12 months with as much confidence as can be expected in this climate.

Wise counsel yet again

[friedegg]

and just wait till august for the divi to be relayed and the pundits that are shy of low term deposit rates wake up to a big player of the nzx,i find the business media in nz to be a complete joke, they seem to know very little of fundamentals and focus on ****e like crap beverage companies/appliance manufacturers and the like because these people know the products are widely known in thier tv audience,its a joke..
no wonder lots of nzers get scammed

[shasta]

There is a name from the past. Waaihoek hasn't been on this forum for nearly two years. It is a shame to lose the likes of him. There are a few others who have gone awol as well.

Waaihoek & Coaster were prominent on the FIXX site?

Is that still going, must say i havent been on there in a long time myself :rolleyes:

[fish]

Fish

Aspect Huntley provide the research & broker valuations on the ASB Sec website.

There HOLD recommendation (@ $1.65) was updated 16/06/09.

With the forecast drop in revenue for 2009/10, they have NZO on a P/E of between 11 - 12, about average i guess...

They have forecast eps @ 14.4c for 2010, so on 385m shares they are forecasting NPAT at roughly $NZ55m.

Hadnt looked at ASB .
Still cant figure how AH can get the same valuation in march as they do in june .
Have to concede doesnt look like any attempt to influence the market .

Makes interesting reading e.g-
Kupe production is likely to commence some time in the fourth quarter of the calendar year instead of the third quarter. As a result, production during FY10 will be lower than originally anticipated. We expect FY10 production to be around 2.8 million barrels of oil equivalent (mmboe), rising to 5.67mmboe in FY11 - the first full year of production. There will be some production during the commissioning phase, but we have not included that in our forecast.

Kupe will produce condensate (light oil), LPG and natural gas. Condensate will be priced against the regional Tapis benchmark, similar to Tui oil, and sold to refineries in Australia and South East Asia. NZO has entered a long-term contract with Genesis Energy, whereby the latter will purchase NZO’s entire natural gas production of 3 petajoules annually on a take-or-pay basis. Management has not revealed what price the gas will be sold at, only indicating it will increase with PPI. Currently, natural gas contracts in NZ are being struck at around NZ$7.5/gigajoule and we have used this price in our forecast. NZO has also entered a contract to sell its entire LPG production to Vector. Management has not provided any pricing disclosures but we understand prices will be linked to international LPG prices, which are linked to the Saudi contract price. This is currently around US$420/ton.

Kupe production will generally remain stable until 2017 and will gradually decline thereafter. Production is expected to last until 2025. Origin, the Kupe operator, is undertaking a production and reserve review with results expected around August/September this year.

They also point out that nzo have made a paper gain of 87 million on prc-on a sp valuation - nzo share worth 130 million and ppp -nzo share worth 41 million-.
Also nzo have $180m invested in kupe-will be repiad within 4 years
Still have more than $200 million in cash

So I am much happier now for everyones opinions and getting that valuation in context

[fish]

Rigged elections , subtle Obama overtures and cell phones are helping to fuel the voice of dissent .

Hopefully peace will prevail but if violence escalates what will happen to the price of oil .?
Last year just speculation of an event was enough to see the price rise .
Next week could be an interesting one for the oil price and consequently the sp of nzo

[notie]

Next week could be an interesting one for the oil price and consequently the sp of nzo

nzo share will trickle along at 150-165 range like they have for the last few months.

I glad you guys are so positive about this stock:eek:

[gazprom1]

Could be very interesting Fish. Here's hoping that everything calms down and oil remains around its current levels - we are ,aking good money!!! IMO it is best to have a slow and steady global recovery with the resultant steady rise in the POO. Would hate to see another spike in the POO due to the imbalances it causes in world economies.

[Unicorn]

nzo share will trickle along at 150-165 range like they have for the last few months.

I glad you guys are so positive about this stock:eek:

NZO share price has not trickled along in the 150-165 range for the last few months - there are plenty of readily available charts out there that show this.

It is probably not helpful making posts that are contrary to facts.

[Bobcat.]

NZO I find to be a very good stock to trade technically. Their fundamentals are good and so there is little downside to trading this baby off the highs and lows - i.e. it is almost certain that any sp movement down will bottom and reverse.

Using MACD and Relative strength with an eye on volumes has enabled me to make more short term profitable trades on this stock that just about any other. The sp moves around nicely to give the volitility required to trade frequently.

Over the past year, I've bought at 1.10 to sell at 1.30; then 1.13 to sell at 1:30; then 1:32 to sell at 1:49; and finally 1:46 to sell at 1.64. The last was my darling trade - 13% in less than a fortnight.

Right now, I'm out - unless it breaks through 1.63 in a hurry I'll watch from the sidelines. Upward trend is still intact but trendline is being tested at 1.58. If that is broken, it could fall quickly and present some buying opportunity around 1.50.

Any other TA thoughts?

[boysy]

THE jack-up Ensco Rig 107 looks set to return to Singapore after two years in New Zealand waters unless explorers utilise the vessel once it finishes the offshore Taranaki Manaia-1 well later this year.



Ensco 107 jack-up drilling rig

The rig, commissioned and launched as a newbuild in Singapore in early 2006, arrived in New Zealand waters in October 2007, primarily for the $NZ1.2 billion offshore Taranaki Kupe gas-condensate project operated by Origin Energy.

Afterwards the rig drilled the non-commercial Momoho-1 near-field appraisal well for the Kupe partners before bad weather hampered its move to begin the development drilling campaign for the billion-dollar Maari oil project operated by Austrian giant OMV further south.

The rig is finishing the last of three water injection wells at the Maari field before drilling the final two of five oil production wells. It will then drill the Manaia appraisal well as an extended reach horizontal well from the Maari platform.

It is known that OMV has eight options on the rig after Maari and that Origin Energy has two options.

However, Origin’s geoscience and exploration new ventures manager Rob Willink has confirmed to PetroleumNews.net that Origin will not be using the rig.

Last July, Willink indicated a further appraisal well could be drilled if a review of Momoho – in association with two other nearby hydrocarbon accumulations discovered by the Kupe South-4 (gas) and Kupe South-5 (oil) wells about 20 years ago – proved positive.

Momoho-1 encountered a 25m-thick gas-condensate pool in the Palaeocene-aged Farewell Formation – the primary reservoir at Kupe.

However, Willink yesterday told PNN that while work to evaluate the remaining exploration potential within the Kupe mining licence was continuing, “in the light of the Momoho results, in all probability, any prospects we may mature to drillable status are likely to be gas prone, and comparatively small”.

“As such, if they were drilled and successful, they would not need to be tied into the Kupe platform until the latter stages of field life. Hence there is no urgency to drill them now.
And we do not intend to exercise our two remaining options,” Willink said.

Industry commentators say it is likely OMV will also choose not to exercise any of its options as OMV does not have any well commitments in either of its other offshore Taranaki licences – PEPs 38485 and 381200 – until late 2011 or 2012.

However, the company is urging other explorers to utilise the vessel before it leaves, saving the high mobilisation-demobilisation costs associated with bringing another jack-up to New Zealand waters.

Other players that could use the rig late this year or early next include Australian Worldwide Exploration, Singapore’s STP Energy, Energy Corporation of America, and integrated energy player Genesis Energy.

It is known that AWE has a commitment to drill a wildcat in its 100%-owned PEP 38534, near D'Urville Island at the top of the South Island, by next April, though company corporate development manager Garry Marsden has declined to comment on the possibility of AWE using the Ensco 107.

STP Energy is investigating the feasibility of committing to the second of its two wells, the Kahu-1 wildcat, it planned last year in its offshore Taranaki licence PEP 38479.

The company only drilled the non-commercial Awakino South-1 well before the jack-up Ensco Rig 56 – which had earlier spent more than two years drilling five development wells in the near-shore Pohokura gas field – left for Singapore last December.

Energy Corporation of America, which operates in New Zealand as Westech Energy, has applied for a second five-year term for its offshore Taranaki licence PEP 38491, primarily so it can drill the Albacore-1 wildcat late this year or early next, perhaps with the Ensco 107.

Finally, Genesis could also utilise the rig to drill a well into the onshore-offshore Mangatoa prospect, targeting the Taniwha formation, in its licence PEP 381204.

The Maari partners are operator Austrian firm OMV (69%), Todd Energy (16%), Horizon Oil (10%) and Cue Energy Resources (5%).

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

[Lion]

NZOG must be looking at some serious exploration . . . they are looking for an exploration manager.

http://www.upstreamonline.com/careers_e/article181503.ece?goto=careers

[Sehnsucht888]

Ouch. Down 7c on 55,000 volume. Yeah, the DOW and oil are down , but still no worse than we were 4 weeks ago.. A bit of an over reaction me thinks..

[sideline]

Ouch. Down 7c on 55,000 volume. Yeah, the DOW and oil are down , but still no worse than we were 4 weeks ago.. A bit of an over reaction me thinks..

55000 shares is nothing - there just aren't any buyers at the moment

[Bobcat.]

55000 shares is nothing - there just aren't any buyers at the moment

Over the past month, NZO has traded under 500,000 shares each day, with only one exception. 200,000 traded today in just over one hour is actually a bit higher than usual. Still, I expect support at 150 to kick in. Assuming the DJIA is not beginning another multi-day dive, this is not a bad time to buy this stock.

[Casa del Energia]

NZOG must be looking at some serious exploration . . . they are looking for an exploration manager.

http://www.upstreamonline.com/careers_e/article181503.ece?goto=careers


Well spotted!! It's funny how the tiny snippets of information can give an insight into the bigger picture. I think may well be quite significant.

[manxman]

Good news on the PPP front:

The well encountered oil and gas shows while drilling and the results of logging with the Modular Dynamic Tester (MDT) and other wireline tools have established approximately 90m net pay comprising both oil and gas within multiple stacked reservoir layers. Two of these reservoir zones have now been tested and flowed oil at a combined rate of 3,265.4
barrels of oil per day plus 8.1 million standard cubic feet of gas per day, through a 48/64” choke. No water was produced from either zone.

It is now planned to conduct a 3D survey to define the resource potential of the Ca Rong Do discovery and adjacent structures, and to determine future exploration and appraisal activity. The discovery of oil and gas and is very encouraging for future exploration in the block which has multiple leads and prospects, and a second exploration well is planned in Q4 2009.

PPP investment is paying off nicely.

[Odd Fellow]

Good news on the PPP front:


PPP investment is paying off nicely.

There is very good news from Vietnam, the
SP will go up now even more.

[Sehnsucht888]

Half way back to before yesterday...

[boysy]

you wonder what nzo plans are with their ppp shareholding and how the announcement reguarding vietnam will change there views. Times also running out before taranaki drilling campaign.

[notie]

you wonder what nzo plans are with their ppp shareholding and how the announcement reguarding vietnam will change there views. Times also running out before taranaki drilling campaign.

nzo would look pretty stupid now if they made a run at ppp to secure that company. that would use a great amount of their cash and the ppp vietnam project is still very much pre-development and not even at the stage of being able to drill a follow up well.

NZ will no doubt go along with awe's taranaki drilling programme like they usually do. you know the tail that wags the dog :rolleyes:

[Nitaa]

nzo would look pretty stupid now if they made a run at ppp to secure that company. that would use a great amount of their cash and the ppp vietnam project is still very much pre-development and not even at the stage of being able to drill a follow up well.

NZ will no doubt go along with awe's taranaki drilling programme like they usually do. you know the tail that wags the dog :rolleyes:A lot of ifs there Notie. I think we have to give credit where credit is due. NZO saw PPP as being undervalued and took an agressive stake in PPP which at todays rates is an absolute bargain.

With regards to taranki drilling program, the reality is nzo are along for the ride and dont have control over awe since they are the operator. In the oil business this is par for the course.

I thought even you Notie knew that. :rolleyes

[the machine]

We are of coa-rse dealing in hindsight here. We all somewhat missed the train not only NZO. So hands up who bought in at say 26 before the NZO move. Not me. Who rebought in at 35 where it was for a long time B4 the PPPV venture. I bought another 120,000 then but with hindsight should have emptied the bank. NZO shows a good profit so far and yes it could have been better as yours could have been too.
Really we have to accept that PPP is different especially if PPPV is successful.The drill could end up a company maker.


hands up digger - bought some in oct 08

M

[Mr Tommy]

Good news for NOGs 15% investment.


PPP 'one to watch' after Asian oil find
4:00AM Friday Jun 26, 2009
By Grant Bradley
Pan Pacific Petroleum's stake in an oil discovery off the coast of Vietnam makes the NZX-listed company one to watch, an analyst says.

The company has a 15 per cent stake in the Red Emperor well where testing at two reservoir zones have produced flows at a combined rate of 3265 barrels of oil and 8.1 million cubic feet of gas a day.

PPP has about 5000 New Zealand shareholders, including NZ Oil & Gas, which has a 15 per cent stake in the Australian-based company. Both have a stake in the highly productive Tui field off Taranaki - NZOG with 12.5 per cent and Pan Pacific with 10 per cent.

Research head at McDouall Stuart, John Kidd, said PPP had stayed below the radar but was becoming more interesting from three perspectives; its stake in Tui, the NZOG cornerstone stake and the progress it was making in Vietnam.

"That's a reasonable find from a single well - and to have a flow rate like that is very promising."

No water was found in either zone as the explorers drilled to a depth of 3810m.

The Vietnam venture includes Britain's Premier Oil, Vietnam American Exploration and a unit of Abu Dhabi-based Mubadala Development.

Drilling began at the Rong Do exploration well in Block 07/03 last month. The area was opened up for drilling by a 2003 accord between the Indonesian and Vietnamese Governments.

PPP said a 3D survey was planned to define the potential of the Red Emperor discovery and nearby structures, and to determine future exploration and appraisal activity.

"The discovery of oil and gas is very encouraging for future exploration in the block which has multiple leads and prospects," the company said.

A second exploration well is planned for the final quarter of this year.

PPP said last month that it aimed at a balanced exploration portfolio in proven basins, with a priority on low-medium, rather than high-risk prospects. Vietnam was an exciting first step.

PPP shares have risen from a 12-month low of 34c and yesterday closed down 1c at 55c.


http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10580755

[BigBob]

PPP shares have risen from a 12-month low of 34c and yesterday closed down 1c at 55c.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10580755

Why can't newspapers get just the most basic facts right anymore... the 12 month low was 18.5c, not 34c.... Getting this simple stuff wrong, totally undermines everything else they report on...

[Sehnsucht888]

Why can't newspapers get just the most basic facts right anymore... the 12 month low was 18.5c, not 34c.... Getting this simple stuff wrong, totally undermines everything else they report on...

Yep. Risen from 34c 12 months ago would be correct, but certainly wasn't the low...

[777]

From DB site for PPP

1-Week Range (Low - High): 50 - 60
4-Week Range: 39 - 60
26-Week Range: 33 - 60
52-Week Range: 18.5 - 60


A good decision by NZO so far in taking a holding.

[boysy]

dividend paid today this will help raise nzos coffers a bit

[777]

From todays trade figures.

Crude oil exports fell $90m or 36 per cent, entirely driven by price, with quantities up 18 per cent.

[fish]

From todays trade figures.

Crude oil exports fell $90m or 36 per cent, entirely driven by price, with quantities up 18 per cent.

Just a temporary blip
However from the nzo web site we have a nice rise in oil price over the past 12 weeks-
Week ended Average Tapis Price $NZ Equivalent
19/06/09 US$73.20 NZ$113.93
12/06/09 US$72.00 NZ$111.89
05/06/09 US$68.71 NZ$109.76
29/05/09 US$62.15 NZ$97.09
22/05/09 US$59.76 NZ$96.34
15/05/09 US$59.94 NZ$102.44
08/05/09 US$56.82 NZ$95.82
01/05/09 US$52.67 NZ$92.40
24/04/09 US$52.49 NZ$91.65
17/04/09 US$54.06 NZ$95.16
10/04/09 US$52.44 NZ$89.87
03/04/09 US$51.00 NZ$87.04


Tapis Oil Price Graph

[fish]

[QUOTE=fish;262693]Just a temporary blip
However from the nzo web site we have a nice rise in oil price over the past 12 weeks-

Tapis is now at a record high for this year -$76-33
Overseas sentiment appears to be improving
Sp is slow to respond today-although to be fair there are few sellers at current prices.

Did someone post that AWE is due to announce a reserve re-assessment for TUI today ?

[fish]

Forsyth Barr
June 2009: Forsyth Barr initiated coverage of NZOG in June 2008. The latest report issued on 25 June 2009 values NZOG at NZ$1.89 per share with an accumulate recommendation. For more information contact Andrew Harvey-Green: andrew.harvey-green@forbar.com

[the machine]

[QUOTE=fish;262693]Just a temporary blip
However from the nzo web site we have a nice rise in oil price over the past 12 weeks-

Tapis is now at a record high for this year -$76-33
Overseas sentiment appears to be improving
Sp is slow to respond today-although to be fair there are few sellers at current prices.

Did someone post that AWE is due to announce a reserve re-assessment for TUI today ?

a reserves upgarade as at june 30 is due - it may take a few weeks before determined though.

[last year it may have been pushed through prior to june 30, being first year, but cycle now and into future will probably be determined intime for the quarterly reports due july 31]

M

[shasta]

[quote=fish;262780]

a reserves upgarade as at june 30 is due - it may take a few weeks before determined though.

[last year it may have been pushed through prior to june 30, being first year, but cycle now and into future will probably be determined intime for the quarterly reports due july 31]

M

AWE & JV partners will have to announce any upgrades to the market, so don't expect to see it in the quarterly, well the June one anyway ;)

[the machine]

noticed this on crown minerals.

thought the 2 drills were exploration and not development.

as regards the bahamas play - awe have been looking at it "for quite some time" - but first we hear about it was in the recent awe presentation. one wonders what other plays are being looked at




quote
AWE plans two Tui development wells with Kan Tan-IV rig
29 June 2009 - Sydney-based explorer Australian Worldwide Exploration (AWE) is looking at drilling three or possibly four types of exploration plays during its summer exploration in the Taranaki Basin.

In a website presentation originally given to the Petroleum Exploration Society of Australia, AWE says its first well, Hoki-1, will be a Cretaceous North Cape Formation play in PEP 38401 about 100 km due west of New Plymouth.


The Hoki-1 structure is 70 sq km in size with 100 m relief giving a large potential. The structure lies geologically under the edge of the Western Platform. Water depth over the structure drops from 150 m deep to about 900 m.


PEP 38401 is operated by AWE, which holds a 50% interest. The other Hoki partners are OMV (31.25%) and Todd Energy (18.75%).


Two wells were also planned as extensions to the Tui oil field pool in the Kapuni Group ‘F10’ sands.


AWE says in the presentation that two Tui extension wells are planned, Tui north east (NE), and Tui south west (SW). The Tui NE target is estimated to contain approximately 10 million barrels recoverable and Tui SW approx. 5 mmbbl recoverable.


AWE’s corporate development manager Garry Marsden said from Sydney that the Tui partners had not firmly decided on which Tui targets would be drilled.


AWE also outlined two other possible targets adjoining the Tui pool - Tui south east (estimated reserves of 10 mmbbl) and Kahu channel play (estimated 30 mmbbl reserves).


A fourth well proposed Tuatara-1, off the South Island’s D’Urville Island, is a Moki sands play similar to OMV’s Maari oil field. The top Moki sands at Tuatara contain a 10 sq km structure containing 90 m of relief. AWE is 100% owner of the permit (PEP 38524).


Mr Marsden said a fourth play type being considered for this drill round is the Bahamas Pleistocene biogenic gas play more than 100 km west of Taranaki largely in PEP 38483.


AWE had been working on this gas play for quite some time, Mr Marsden said. While the gas play had the disadvantage of being a long way from shore, it appeared to have a large upside.


He said the semi-submersible rig Kan Tan-IV is currently scheduled to arrive in New Zealand in November.


Sources: AWE and Lindsay Clark

Last updated 29 June 2009
unquote


M

[Mr Tommy]

Form the Pike special meeting last week, shareholders gave approval for NZOG to increase its holding using 2009 options and 2011 options it holds.

The prospectus states:
NZOG holds 11,016,747 2009 Options which it was allotted prior to the IPO and which entitle it to subscribe for new ordinary shares for $1.30 each. The 2009 Options expire on 30 June 2009.

So the meeting was held in time to take up these options yesterday at $1.30.
Do we know if they did this or not. I know its 10c above the market price but with production finally starting this quarter (yeah right?) it could be a smart purchase.

[the machine]

Form the Pike special meeting last week, shareholders gave approval for NZOG to increase its holding using 2009 options and 2011 options it holds.

The prospectus states:
NZOG holds 11,016,747 2009 Options which it was allotted prior to the IPO and which entitle it to subscribe for new ordinary shares for $1.30 each. The 2009 Options expire on 30 June 2009.

So the meeting was held in time to take up these options yesterday at $1.30.
Do we know if they did this or not. I know its 10c above the market price but with production finally starting this quarter (yeah right?) it could be a smart purchase.



would certainly help pike sp if nzo did

M

[the machine]

Form the Pike special meeting last week, shareholders gave approval for NZOG to increase its holding using 2009 options and 2011 options it holds.

The prospectus states:
NZOG holds 11,016,747 2009 Options which it was allotted prior to the IPO and which entitle it to subscribe for new ordinary shares for $1.30 each. The 2009 Options expire on 30 June 2009.

So the meeting was held in time to take up these options yesterday at $1.30.
Do we know if they did this or not. I know its 10c above the market price but with production finally starting this quarter (yeah right?) it could be a smart purchase.


absence of announcements indicates nzo did not exercise the options, neither did any others.

M

[blockhead]

Wouldnt be that smart in my books Mr Tommy, not if they are cheaper to buy on Market.

If you where buying them for yourself would you take them @ $1.30 or $1.18 ????

[BigBob]

Wouldnt be that smart in my books Mr Tommy, not if they are cheaper to buy on Market.

If you where buying them for yourself would you take them @ $1.30 or $1.18 ????

I doubt they could get over 11m of them at 118....

[peat]

unless of course buying 11 mil pushes the price up 12 cents....
last time vol was over a million the price went up 15c that day

could of course just start buying them until price hits 1.30.

[shasta]

Form the Pike special meeting last week, shareholders gave approval for NZOG to increase its holding using 2009 options and 2011 options it holds.

The prospectus states:
NZOG holds 11,016,747 2009 Options which it was allotted prior to the IPO and which entitle it to subscribe for new ordinary shares for $1.30 each. The 2009 Options expire on 30 June 2009.

So the meeting was held in time to take up these options yesterday at $1.30.
Do we know if they did this or not. I know its 10c above the market price but with production finally starting this quarter (yeah right?) it could be a smart purchase.

NZO has been very supportive thus far, so why not show the market some faith in Pike River & convert them?

NZO will realise a very tidy profit in due course from it's PRC holding, & the SP will be well north when PRC hits its milestone production target.

NZO also have the convertible notes left don't they?

[the machine]

Wouldnt be that smart in my books Mr Tommy, not if they are cheaper to buy on Market.

If you where buying them for yourself would you take them @ $1.30 or $1.18 ????

not allowed to buy on market without making a bid for company.

M

[gbeenz]

From the NZO site under Pike River

"NZOG's current shareholding in PRC is 102,637,600 shares (29.6% of issued capital). NZOG also has 17,266,132 options (exercisable on or before 24 April 2011 for NZ$1.25 per share). 11 million unlisted options with an exercise price of $1.30 per share expired on 30 June 2009."

[notie]

NZO has been very supportive thus far, so why not show the market some faith in Pike River & convert them?

NZO will realise a very tidy profit in due course from it's PRC holding, & the SP will be well north when PRC hits its milestone production target.

NZO also have the convertible notes left don't they?

Misplaced faith in the price of the coal I think. While PRC sold make a profit, its not going to be crazy money. International coal prices have dropped as is steel production.

This from the Solid Energy website: "We expect this downward trend to continue through 2009 and into 2010. Steel makers worldwide have cut production by up to 30%. Current export coal spot prices are down by more than 50% and contract export prices are likely to follow

http://www.coalnz.com/index.cfm/1,293,830,0,html/Economic-downturn-impacts-heavily-on-Solid-Energy

[Bilo]

Misplaced faith in the price of the coal I think. While PRC sold make a profit, its not going to be crazy money. International coal prices have dropped as is steel production.

This from the Solid Energy website: "We expect this downward trend to continue through 2009 and into 2010. Steel makers worldwide have cut production by up to 30%. Current export coal spot prices are down by more than 50% and contract export prices are likely to follow

http://www.coalnz.com/index.cfm/1,293,830,0,html/Economic-downturn-impacts-heavily-on-Solid-Energy

March 13 - Old news notie. Japan increasing steel production, working weekends again. US and europe still quiet but China and India stepping up - all systems go for coking coal IMO. Potential for a missed heart beat before October but with so much cash injected around the world into infrastructure projects becoming less likely.

With slight delay at Kupe (3rd qtr to 4th qtr) the extra 15M from not taking up PRC options will help NZO pay their dividend. I also assume that PRC doesn't need the money.
:)

[notie]

[QUOTE=Bilo;263049]March 13 - Old news notie. Japan increasing steel production, working weekends again. US and europe still quiet but China and India stepping up - all systems go for coking coal IMO. Potential for a missed heart beat before October but with so much cash injected around the world into infrastructure projects becoming less likely.

With slight delay at Kupe (3rd qtr to 4th qtr) the extra 15M from not taking up PRC options will help NZO pay their dividend. I also assume that PRC doesn't need the money.
:)[/QUOTE

word is nzo might use that 15M to farm in on another offshore Taranaki well they aren't involved with at the moment

[digger]

Misplaced faith in the price of the coal I think. While PRC sold make a profit, its not going to be crazy money. International coal prices have dropped as is steel production.

This from the Solid Energy website: "We expect this downward trend to continue through 2009 and into 2010. Steel makers worldwide have cut production by up to 30%. Current export coal spot prices are down by more than 50% and contract export prices are likely to follow

http://www.coalnz.com/index.cfm/1,293,830,0,html/Economic-downturn-impacts-heavily-on-Solid-Energy

Just got back from Hong Kong and as soon as i saw a Notie post i knew it would be a twist of the facts in some way. This time it is using old news.The report given here is dated mid March before and economicy activity has picked up since then. In fact looking very positive when all you can find on the negative side is months old.

[Mr Tommy]

Does anyone notice all the ESOP announcements. Over the last 6 weeks there have been 5.
14 May, 150000
21 May, 161000
3 June, 100000
15 June, 50000
30 June, 400000

So over 860,000 shares allocated to staff in 6 weeks, and I think there are less than 20 staff. Do the staff not get paid or something.

[notie]

sorry to be over negative, but the reality is coal prices are still very much lower that when that pr project kicked off.

It will no doubt make an OK profit, but nothing that spectacular which is what an oil exploration company stock can do if they go out and find some decent things to drill then lay off interest to other parties on a free carried basis. Something NZOG isn't doing unfortunately....:confused:

Things may change at nzog, but given the board's micro-management of the activities of the company and their well known adversity to risk exposure then I can't see them spending their 200M any time soon. Risk is what exploration is all about and they have a nice little earner going with Tui and Kupe soon, so they have no excuse not to go out and chase some elephants.
I would put a 5% chance on them taking this kind of action

[shasta]

sorry to be over negative, but the reality is coal prices are still very much lower that when that pr project kicked off.

It will no doubt make an OK profit, but nothing that spectacular which is what an oil exploration company stock can do if they go out and find some decent things to drill then lay off interest to other parties on a free carried basis. Something NZOG isn't doing unfortunately....:confused:

Things may change at nzog, but given the board's micro-management of the activities of the company and their well known adversity to risk exposure then I can't see them spending their 200M any time soon. Risk is what exploration is all about and they have a nice little earner going with Tui and Kupe soon, so they have no excuse not to go out and chase some elephants.
I would put a 5% chance on them taking this kind of action

You can rant all you like about coal prices, but you need to remember that the coal prices for the year have already been set!

The current years locked in price is still above the forecast in the prospectus.

Plus Pike's hard coking coal attracts a premium & caters for a slightly different market, than normal thermal coal

[biker]

Daily ShareChat: New Zealand Oil & Gas
By Jenny Ruth

Friday 3rd July 2009
Text too small?

About 40% of New Zealand Oil & Gas's investments are currently "problematic," says Andrew Harvey-Green at Forsyth Barr.

"Holding cash is not an efficient use of shareholder funds, Pike River Coal is a non-core holding and, if NZO is unable to take over Pan Pacific Petroleum, that investment also becomes non-core," he says. The company owns 31% of Pike River and 15% of Pan Pacific.

"The cash balance that looked strategically strong six months ago is no longer so attractive," Harvey-Green says.

"It appears that NZO has missed the bottom of the market as commodity prices have rallied and assets that were previously under stress are no longer under as much stress," he says.

"We fear that NZO may have missed an opportunity of a lifetime and expect investors to increasingly question how much longer NZO should sit on its cash.

He says the company's share price has benefited from a rally in commodity prices in recent months but it is no longer as sensitive to the oil price as it once was with Tui, in which it has a 12.5% interest, having converted 46% of its oil reserves into cash.

"This is one reason why its investment strategy is so important," Harvey-Green says.



BROKER CALL: Forsyth Barr RATE New Zealand Oil & Gas (NZX: NZO ) as accumulate (downgraded from buy).

[digger]

Daily ShareChat: New Zealand Oil & Gas
By Jenny Ruth

Friday 3rd July 2009
Text too small?

About 40% of New Zealand Oil & Gas's investments are currently "problematic," says Andrew Harvey-Green at Forsyth Barr.

"Holding cash is not an efficient use of shareholder funds, Pike River Coal is a non-core holding and, if NZO is unable to take over Pan Pacific Petroleum, that investment also becomes non-core," he says. The company owns 31% of Pike River and 15% of Pan Pacific.

"The cash balance that looked strategically strong six months ago is no longer so attractive," Harvey-Green says.

"It appears that NZO has missed the bottom of the market as commodity prices have rallied and assets that were previously under stress are no longer under as much stress," he says.

"We fear that NZO may have missed an opportunity of a lifetime and expect investors to increasingly question how much longer NZO should sit on its cash.

He says the company's share price has benefited from a rally in commodity prices in recent months but it is no longer as sensitive to the oil price as it once was with Tui, in which it has a 12.5% interest, having converted 46% of its oil reserves into cash.

"This is one reason why its investment strategy is so important," Harvey-Green says.



BROKER CALL: Forsyth Barr RATE New Zealand Oil & Gas (NZX: NZO ) as accumulate (downgraded from buy).


Have finally got my hands on The Black Swan by Nassim Nicholas Taleb and about half finished. He deals a lot with the history of predictions and concludes that our history shows we are unable to meaninly find the future from our best modles. Basically says predicting is so poor it is a waist of time.Our history is littered with predictions that are so wrong that we ignore them rather than face our poor record. Then we turn around and make another prediction.
I too thought about a month ago the world economy was about to turn around and if so NZO missed the bottom. Today it looks like the bottom is some way off with the green shoots looking brownish. So maybe NZO has not missed the boat.Maybe the opportunities are yet to come. The point is that Forsyth Barr were a company that i dealt with for many years and their predictions are no better than what is coming out of NZO.
Where is the bottom and how long is a piece of string are two questions that will always be with the human race and will only be known in hindsite.

[biker]

I've always thought Forsyth Barr were in NZO's pocket and if so, you could see this as a willingness by the company to make itself appear less attractive, at this point in time, for whatever reason.

[notie]

Daily ShareChat: New Zealand Oil & Gas
By Jenny Ruth

Friday 3rd July 2009
Text too small?

About 40% of New Zealand Oil & Gas's investments are currently "problematic," says Andrew Harvey-Green at Forsyth Barr.

"Holding cash is not an efficient use of shareholder funds, Pike River Coal is a non-core holding and, if NZO is unable to take over Pan Pacific Petroleum, that investment also becomes non-core," he says. The company owns 31% of Pike River and 15% of Pan Pacific.

"The cash balance that looked strategically strong six months ago is no longer so attractive," Harvey-Green says.

"It appears that NZO has missed the bottom of the market as commodity prices have rallied and assets that were previously under stress are no longer under as much stress," he says.

"We fear that NZO may have missed an opportunity of a lifetime and expect investors to increasingly question how much longer NZO should sit on its cash.

He says the company's share price has benefited from a rally in commodity prices in recent months but it is no longer as sensitive to the oil price as it once was with Tui, in which it has a 12.5% interest, having converted 46% of its oil reserves into cash.

"This is one reason why its investment strategy is so important," Harvey-Green says.



BROKER CALL: Forsyth Barr RATE New Zealand Oil & Gas (NZX: NZO ) as accumulate (downgraded from buy).

So NZO has sat around on its hands with its treasure chest and missed the boat. Surprise surprise.

It isn't just the oilers saying this about nzo now.

Next thing to happen? NZO is likely to throw all its money into a lame duck company or farm in. I

[Chris Roberts]

Does anyone notice all the ESOP announcements. Over the last 6 weeks there have been 5.
14 May, 150000
21 May, 161000
3 June, 100000
15 June, 50000
30 June, 400000

So over 860,000 shares allocated to staff in 6 weeks, and I think there are less than 20 staff. Do the staff not get paid or something.

The ESOP announcements listed above are NOT new allocations. They are notifications that FORMER employees have exercised (ie paid up the full amount) shares that they had partly paid for some years ago.

NZOG will continue to offer partly paid shares to new employees. Here's an example of how it works:
An employee is offered 100,000 shares at the current price plus 20% - say $1.90. The EMPLOYEE pays 1 cent per share now and then cannot touch the shares for 2 years. Once 2 years is up, they can turn the partly paid shares into full shares by paying the remaining $1.89 a share.
The scheme - which is similiar to others used by companies around the world - provides an incentive for an employee to play their part in working to increase shareholder value.

[777]

True Chris but it is also abused by a lot of companies. It is why shareholders distrust so many public companies. We fund the company but some short term employee gets a bundle of options for a cent. I work for a salary so why can't they. You included.

[Mr Tommy]

The ESOP announcements listed above are NOT new allocations. They are notifications that FORMER employees have exercised (ie paid up the full amount) shares that they had partly paid for some years ago.

NZOG will continue to offer partly paid shares to new employees. Here's an example of how it works:
An employee is offered 100,000 shares at the current price plus 20% - say $1.90. The EMPLOYEE pays 1 cent per share now and then cannot touch the shares for 2 years. Once 2 years is up, they can turn the partly paid shares into full shares by paying the remaining $1.89 a share.
The scheme - which is similiar to others used by companies - provides an incentive for an employee to play their part in working to increase shareholder value.

Hi Chris
Ive just looked thru the last couple of annual reports. In 2006 staff were issued 1,535,000 options, in 2007 it was 1,073,500, in 2008 it was 960,000.
How is the number determined, and does this go on forever?

[notie]

Hi Chris
Ive just looked thru the last couple of annual reports. In 2006 staff were issued 1,535,000 options, in 2007 it was 1,073,500, in 2008 it was 960,000.
How is the number determined, and does this go on forever?

it sure does and you will find most of the big packages of options are taken up by the directors.

It is pretty standard practice in most listed companies

[Chris Roberts]

The offer of partly paid shares to directors has an additional requirement - any offer must have the specific approval of shareholders. The partly paid shares currently held by directors were approved by shareholders at past AGMs. Details of those holdings are stated in the Annual Report each year.

[the machine]

So NZO has sat around on its hands with its treasure chest and missed the boat. Surprise surprise.

It isn't just the oilers saying this about nzo now.

Next thing to happen? NZO is likely to throw all its money into a lame duck company or farm in. I



nzo entered romania at the recent bottom of market - now they have to capitalise on that.

be mindfull that any bid may include known commercial oil and/or gas fields as well as exploration, thus a successful bid will puta dent in nzo pockets for the short term.

M

[shasta]

So NZO has sat around on its hands with its treasure chest and missed the boat. Surprise surprise.

It isn't just the oilers saying this about nzo now.

Next thing to happen? NZO is likely to throw all its money into a lame duck company or farm in. I

Since when have the opportunities dried up?

We are still in a bear market & i'm afraid we aren't in the clear just yet

There's no knowing what the oil price will do short term, it may well go under $50/bbl again before we see $100/bbl

STO today mounted a 19.99% stand for ESG, why didn't they "jump" in 3 months ago?

[notie]

Since when have the opportunities dried up?

We are still in a bear market & i'm afraid we aren't in the clear just yet

There's no knowing what the oil price will do short term, it may well go under $50/bbl again before we see $100/bbl

STO today mounted a 19.99% stand for ESG, why didn't they "jump" in 3 months ago?

now you are companying statoil with nzog-good joke dude.

Throwing some tea money at romania for a study group in my books doesn't count as a large scale investment. There are no bids on the table as yet and I doubt if nzog are going to put their cards down on this one, or anything anytime soon for that matter.....

you guys are so faithful to this lame duck

[bermuda]

now you are companying statoil with nzog-good joke dude.

Throwing some tea money at romania for a study group in my books doesn't count as a large scale investment. There are no bids on the table as yet and I doubt if nzog are going to put their cards down on this one, or anything anytime soon for that matter.....

you guys are so faithful to this lame duck

Notie,
I presume you are taking the 'p...' by referring to NZO as a lame duck company.

From what I can comprehend this company is going from strength to strength. What more do you want? You have Tui which has further prospects, you have a mainstream long term earner in Kupe, a coking coal mine about to produce at above IPO pricing , an investment in PPP which is looking pretty good...and a chance in Romania.

Where are you coming from? How many do you hold?

I would rate NZO as one of New Zealand's top companys.

[elZorro]

Interesting comment from Notie. How much of the faith in NZO is due to unceasing shareholdings in a NZ exploration company that did struggle for years?

Well, I've just had a look at their website after losing interest in NZO for awhile. They must be in a fairly exciting position, and the site is terrific in terms of showing their story. Pity the SP isn't moving ahead in the way that it did in 2003-2004. Has their current position already been factored in by the market?

-elZorro-

[boysy]

I think people are putting alot of emphasis on PRC and KUPE. The fact of the matter is TUI will provide more revenue than KUPE while KUPE will provide a long term revenue stream. The PRC investment is going to be sold you have to wonder what NZO is doing about replacing its reserves. Are people wondering what after TUI i mean NZO must surely have to find new reserves elsewhere though it looks as though they have done little about confronting this issue. NZO has alot of money the question has to be is NZO game enought to use it to increase shareholder value ?

[shasta]

I think people are putting alot of emphasis on PRC and KUPE. The fact of the matter is TUI will provide more revenue than KUPE while KUPE will provide a long term revenue stream. The PRC investment is going to be sold you have to wonder what NZO is doing about replacing its reserves. Are people wondering what after TUI i mean NZO must surely have to find new reserves elsewhere though it looks as though they have done little about confronting this issue. NZO has alot of money the question has to be is NZO game enought to use it to increase shareholder value ?

NZO have permits in & around the Tui field, makes sense to search around where you have found it before dont you think? (old gold miners theory).

NZO have some prospects around the Kupe field, & also have the Basque permit off Christchurch + Romania.

I don't get what everyone's rush is for NZO to jump at the first thing that comes along, lets review the reserves at Tui & if required drill some more wells to increase production/life of project

The Kupe project isn't up & running yet, & NZO's two main projects have different JV partners, perhaps they are a bit stretched in the human resource capacity?

Another point for people to consider, NZO can't just get a rig whenever they like, so lets make use of the one we have & then plan ahead!

AWE have a big forward drilling program planned, perhaps they may reduce some risk & farm out a slice of the action.

I get the feeling some posters would rather NZO spent $200m drilling offshore deep waters wildcats :eek:

Remember the NZO board have previously stated there intention to get NZO up to 2mmbo per year production & reserves up to 25mmbo.

I'm sure the opportunities are still rolling in & being assessed!

[Billy Boy]

i think people are putting alot of emphasis on prc and kupe. The fact of the matter is tui will provide more revenue than kupe while kupe will provide a long term revenue stream. The prc investment is going to be sold you have to wonder what nzo is doing about replacing its reserves. are people wondering what after tui i mean nzo must surely have to find new reserves elsewhere though it looks as though they have done little about confronting this issue. Nzo has alot of money the question has to be is nzo game enought to use it to increase shareholder value ?

pep38259 !!!
Bb :)

[fish]

NZO have permits in & around the Tui field, makes sense to search around where you have found it before dont you think? (old gold miners theory).

NZO have some prospects around the Kupe field, & also have the Basque permit off Christchurch + Romania.

I don't get what everyone's rush is for NZO to jump at the first thing that comes along, lets review the reserves at Tui & if required drill some more wells to increase production/life of project

The Kupe project isn't up & running yet, & NZO's two main projects have different JV partners, perhaps they are a bit stretched in the human resource capacity?

Another point for people to consider, NZO can't just get a rig whenever they like, so lets make use of the one we have & then plan ahead!

AWE have a big forward drilling program planned, perhaps they may reduce some risk & farm out a slice of the action.

I get the feeling some posters would rather NZO spent $200m drilling offshore deep waters wildcats :eek:

Remember the NZO board have previsouly stated there intention to get NZO up to 2mmbo per year production & reserves up to 25mmbo.

I'm sure the opportunities are still rolling in & being assessed!

I have no doubt the market grossly underestimates the value of nzo
My understaning is that there are additional pools of oil around Tui and 2 production drills -tui n/e and south west will go ahead in a few months .
No value is given by analysts to the wealth of experience and knowledge the nzo team have.
However just look at the nzo website to see that all recent analysts value nzo greater than the market .
The market will wake up one day-possibly when the dividend is announced-or when the tui s.e production well flows -who knows when market sentiment will become more realistic as far as nzo goes . Its certainly got great assets.loads cash and potential .
Market risk of the sp going much lower is negligible .

[boysy]

If people belive in the TUI story why invest in NZO. PPP and AWE have greater leverage to success and both have just as much exploration diversity both are cashed up. I belive like you all of the JV partners are still undervalued but this is unlikely to change and nzo is not the only o&g company that are well below valuations. I guess the uncertainty over oil and gas prices are the main determinant of this.

[shasta]

If people belive in the TUI story why invest in NZO. PPP and AWE have greater leverage to success and both have just as much exploration diversity both are cashed up. I belive like you all of the JV partners are still undervalued but this is unlikely to change and nzo is not the only o&g company that are well below valuations. I guess the uncertainty over oil and gas prices are the main determinant of this.

Because Boysy, what we are trying to say on this thread is that there is more to NZO than just Tui!

Whilst PPP are hoping Vietnam is a commercial success, NZO have the Kupe project just around the corner, & AWE have other projects to bring into production.

Remember AWE is well covered by analysts in Australia due to it's size, whereas NZO is not & kinda flys under the radar, despite being in the NZX50.

PPP has had a great run of late, & perhaps is not undervalued anymore!

As you can see from the NZO valuations on there website the "Sum-of-the-Parts" equals more than the current SP, which i doubt factors in much of Kupe anyway, nor the prospective nearby exploration targets.

I agree there are other O&G companies that are undervalued, i also consider BPT & OEL in that category that's why i hold them + NZO.

The markets like certainty, & Kupe has to be up & running problem free to generate any "re-rating" of NZO.

I'm sure should the NZO SP continue to remain too far below "fair value", especially in the eyes of the Board, then they surely have to consider a share buyback scheme.

Mgmt's performance KPI's will be tiered to SP gains, so they have EVERY incentive to do what's best for all shareholders.

[winner69]

Jeez Shasta ... I haven't ever seen you so passionate about a company as you are now with NZO ... no never ever before

Good stuff .... passion (and self belief) goes a long way

[shasta]

Jeez Shasta ... I haven't ever seen you so passionate about a company as you are now with NZO ... no never ever before

Good stuff .... passion (and self belief) goes a long way

I'm all for alternative points of view, Notie is clearly trying to bait everyone (although could well be from the O&G industry?), & Boysy (among others) favour PPP over NZO, thats all good.

But im always happy to point out the facts, especially when some choose to overlook them to suit there own agenda!

Yup i'm a passionate fella & have plenty of self belief :p

NZO has been in production just a tad over 2 years, people seem to forget that, you gotta learn to crawl & walk before you run!

[winner69]

Nifty return calulator on their website .... you can calculate your returns from any date to any date ... with and without dividends ... and with dividends reinvested

I did it for the last 12 months and came up with -16%

They also have an interactive chart for the last 12 months where the news items pop up as you drag the cursor along .... nifty

That chart also allows you to compare NZO with the NZX50 .... what surprised me was that NZO has performed pretty much in line with the NZX50 over the last 12 months (the NZX50 is a bit hard to see though)

Different story over 2 years and longer periods though

Bored today

[winner69]

As one who hasn't gone to the NZO website for some time I was surprised to see that in Analyst coverage section no mention of Mcdouall Stuart valuation

Proudly display the 7 analyst valuations they have come across

Seeing how optimistic analysts are and that generally shares trade at least 20% below their valuations I thought the valuations shown ranging from 161 to 193 with an average of 176 didn't seem to tie in with the thoughts of posters on this thread

Believe these analysts and not much upside from the NZO price of 157 yesterday

But where has Mcdoull Stuart gone

[winner69]

Slide 5 of this NZO preso has a chart showing that the shareprice correlation with the price of oil was broken in October 2008
http://www.nzog.com/f50,142686/142686_NZOG_Excellence_in_Oil_Gas_Conference_Sydne y_April_2009.pdf

Don't know the context in what this presented but my immediate thought was if there 'normally' is a correlation than the NZO shareprice should be a lot less than it is today .... converse to the argument on the BPT thread which says BPT is cheap because the shareprice is not rsing as the price of oil rises

Suppose there was a good reason to talk about this correlation being broken

[shasta]

As one who hasn't gone to the NZO website for some time I was surprised to see that in Analyst coverage section no mention of Mcdouall Stuart valuation

Proudly display the 7 analyst valuations they have come across

Seeing how optimistic analysts are and that generally shares trade at least 20% below their valuations I thought the valuations shown ranging from 161 to 193 with an average of 176 didn't seem to tie in with the thoughts of posters on this thread

Believe these analysts and not much upside from the NZO price of 157 yesterday

But where has Mcdoull Stuart gone

NZO has probably outgrown them & don't need them in there back pocket anymore, especially now NZO is in the NZX50, institutions have to buy them & will form there own valuations.

[winner69]

A philosophical point shasta ..... isn't it sad that instos NEED to buy companies on the NZX50 whether they like them or not ..... even if the fund manager valued NZO at 120 he would still buy some .... maybe be active and just be under NZO weighting in the index .... probably wouldn't have any though

Conversely if the same manager that NZO was worth $3 he would be just over the the weighting but not much more.

Big difference in realty but little difference in the managers portfolio

No wonder the funds management business is stuffed eh

Maybe thats why NZO shareprice has performed in line with the NZX over the last year

[oldowl]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10582725
OO

[winner69]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10582725
OO


Give the investor relations guy his due .... probably listening to your chat and thought he better do a bit of PR stuff explaining why .... good stuff

[blockhead]

Theres a definite indication in the that article indicating NZO (1) can't find what they were looking for, (2) hear what the shareholders are saying about getting their arse into gear and (3) they may need to borrow to get into whatever is next.

Might give them Alan Hubbards number, he had to put the hand in the back pocket for $40M to assist SC Finance last week but I'm sure there is more in the same pocket

[macduffy]

I'm not an NZO shareholder but if I were I wouldn't be too worried about the company's "steady does it" approach.

Highly preferable to the wheeling and dealing of a company like BPT, selling off good assets, buying bits of things all over the world, inflating the issued capital to over a billion shares to pay for these bits ( at $1-43 incidentally ) and seeing its SP languish down to around the current 78c.

Sorry if this is more of a rant about BPT than a comment about NZO but I make the point that that's a possible outcome of pushing a company too hard to "make things happen". Although in BPT's case I don't think they needed much pushing!

[digger]

I am very happy with the steady as you go approach.It implies a well thought out structure that means it will have the smallest possible scope for unexpected negative conquences after the deal.It is the opposite of marry in hast repent at leisure.
Sounds interesting if it means 100 million of debt. Would that imply say a 300 million deal. Fish how is your humor this morning? What about no dividend this year and go empire building instead !!!!!

[neopoleII]

seeing that Iraq's fields have been put up for auction, and we know they are big, and proven. maybe nzo can invest everything its got for a .01% stake in the last rich and easy oil fields.
better than romainia or quassimotto land

[digger]

seeing that Iraq's fields have been put up for auction, and we know they are big, and proven. maybe nzo can invest everything its got for a .01% stake in the last rich and easy oil fields.
better than romainia or quassimotto land

Neopole this idea is the exact opposite of what i would like.Just read the other day that only one contract was sold as Iraq really just wants everyone else it be only involved as far as the expence goes.The profit is to be all kept for Iraq,that is why everone else pulled out.There are a lot of unknowns unknowns with this area.

[sideline]

I am very happy with the steady as you go approach.It implies a well thought out structure that means it will have the smallest possible scope for unexpected negative conquences after the deal.It is the opposite of marry in hast repent at leisure.
Sounds interesting if it means 100 million of debt. Would that imply say a 300 million deal. Fish how is your humor this morning? What about no dividend this year and go empire building instead !!!!!

I think a steady or rising divi payment is now essential if NZO wants to be regarded as a serious investment
on the NZX as opposed to a drill&thrill oiler for speculation only.

[Odd Fellow]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10582725
OO


Plus this here:

http://www.upstreamonline.com/careers_e/article181503.ece?goto=careers

and put two + two together

[fish]

I am very happy with the steady as you go approach.It implies a well thought out structure that means it will have the smallest possible scope for unexpected negative conquences after the deal.It is the opposite of marry in hast repent at leisure.
Sounds interesting if it means 100 million of debt. Would that imply say a 300 million deal. Fish how is your humor this morning? What about no dividend this year and go empire building instead !!!!!

That brought a smile onto my face
Are you sure he doesnt imply that he is going to give a big dividend so he will have to borrow a bit to fund the next project ?

"The price collapse of oil - to just over US$30 at the beginning of the year - didn't shake out the right field bargain, so NZOG is looking at going back into debt to fund its next big investment. Salisbury is reluctant to put a top number on it but says $100 million would be a "comfortable" level of borrowing."

[shasta]

That brought a smile onto my face
Are you sure he doesnt imply that he is going to give a big dividend so he will have to borrow a bit to fund the next project ?

"The price collapse of oil - to just over US$30 at the beginning of the year - didn't shake out the right field bargain, so NZOG is looking at going back into debt to fund its next big investment. Salisbury is reluctant to put a top number on it but says $100 million would be a "comfortable" level of borrowing."

Borrowing $100m for say a $200-250m cash purchase*, still seems conservative when the Pike River holding would offset the debt.

* NZO could also offer shares to snear a bigger target ;)

Nb, Pike is worth ~$A100m, & PPP ~$A40m to NZO

Also to keep in mind TAP @ $A1.04 is worth $A163m :rolleyes:

A takeover of TAP @ $A1.50 is $A240m :rolleyes:

About TAP

http://www.stocknessmonster.com/news-item?S=TAP&E=ASX&N=447833

No debt, few shares, both oil & gas reserves, exploration upside & undervalued.

Share register is primarily Institutions (& open) who may prefer NZO's dividends to TAP's SP underperfomance!

I'm looking to add TAP to the portfolio myself, it really is a sitting duck!

[boysy]

What is the hangup with dividends in such a time like this. If nzo gave away a big divi this would reflect badly i mean if nzo cannot find a better avenue to spend there cash you hav 2 wonder are they looking in the rite places or are there expectations too high.

[JBmurc]

-Yeah thanks guys just looks such a good fit for NZO ,I just think shareholders like myself would rather their growing funds go towards more production, Reserves & permits an to me TAP would give pently of all three for a resonable amount.
-NZO could do it many ways ideally a full takeover maybe 50% in NZO shares with opts and 50% cash say 150mill leaving NZO with 150mill+ in cash to fully fund ongoing drilling
Sounds easy but I'm sure TAP holders would like more


worth checking out their site-like all there permits
http://www.tapoil.com.au/pages/permit.asp

I agree Shasta believed it would have been a great takeover before they made the play for PPP back when TAP was 60-70c

[boysy]

CONTINUED strong production from the offshore Tui oil field and near-shore Pohokura gas-condensate field in Taranaki has allowed New Zealand to post record oil production of 21 million barrels last year, a 45% increase over the previous year.



The Umuroa FPSO at the Tui Area oil project

According to the Ministry of Economic Development’s New Zealand Energy Data File 2009, the two fields dominated production during 2008 contributing 86% of the country’s total production, while the more southern offshore Maui gas-condensate field supplied 8.1%.

New Zealand’s mean production from Taranaki’s 16 fields was 58,400 barrels per day for 2008, up from 40,750bpd in 2007.

The MED said Tui and the ramping up Maari field were also changing the shape of New Zealand’s liquids production sector.

Crude now made up 71% of total production, condensate (27%) and naphtha (2%), as opposed to the mainly condensate production of past years.

New Zealand’s oil exports – mainly to Australia, Japan and South Korea – also increased, with 20.5 million barrels sent overseas, the highest ever in a calendar year.

Although only 4% was processed locally at the Marsden Point Refinery last year, New Zealand’s theoretical “self-sufficiency” in liquid fuels has increased markedly – from 14% in 2006 to 47% last year – again primarily due to Tui and Pohokura.

Pohokura production started in August 2006 and Tui in June 2007.

Total net gas production, excluding gas reinjected, etc, decreased by 6% to 155 petajoules because of a drop in gas demand for electricity generation, more coal generation at Genesis Energy’s dual-fuelled Huntly power station, increased geothermal generation, and a drop in consumer energy demand.

Pohokura was the largest supplier of gas, producing 40.6% of the 155PJ, Maui was second with 29.8% and the onshore Kapuni field third with 12.2%.

The Tui oil field produced about 4.4%, or about 6.8PJ, some of which was used aboard the floating production storage and offtake Umuroa, though most was flared.

On the other hand, total remaining oil reserves, from producing and non-producing fields, decreased by 16.2%, while total remaining gas reserves decreased by 16.3%.

These decreases were the result of ongoing production at Pohokura and onshore fields, while Maui and the onshore Kapuni field reserves decreased in light of in-depth geological studies.

The MED said remaining oil reserves – based on a 2P (proved and probable) basis as at January 1, 2009 – were about 162MMbbl, while remaining gas reserves were about 1771PJ.

Pohokura’s remaining reserves were about 1012PJ and 49MMbbl, while Maui had about 306PJ and 11MMbbl, and Kapuni 118PJ and 65MMbbl.

Pohokura continued to hold the most remaining oil reserves, about 35%, the more southern Maari about 30%, Tui 18% and Maui 6%.

The number of all wells drilled during 2008 – exploration, appraisal and development – was 34, down nine on the record number drilled in 2007 but up four on 2006 and the same number as in 2005.

[Crypto Crude]

my friend told me he has seen that coal is being stock piled at Lyttleton Harbour, and hes seen it with his own eyes...
can anyone confirm if it is Pike River Coal?
:cool:
.^sc

[Billy Boy]

my friend told me he has seen that coal is being stock piled at Lyttleton Harbour, and hes seen it with his own eyes...
can anyone confirm if it is Pike River Coal?
:cool:
.^sc
Pinch some and see if it burns you fire grett out. !!! :D
BB :D

[arjay]

The Tui oil field produced about 4.4%, or about 6.8PJ, some of which was used aboard the floating production storage and offtake Umuroa, though most was flared.

On the other hand, total remaining oil reserves, from producing and non-producing fields, decreased by 16.2%, while total remaining gas reserves decreased by 16.3%.

.


Not a good look - NZ gas reserves down over 16% while we flare off 4% of the annual total. I'm sure the greenies will pick up on this.

[shasta]

Not a good look - NZ gas reserves down over 16% while we flare off 4% of the annual total. I'm sure the greenies will pick up on this.

They'll be too concerned shouting to the masses about Climate Change.

How long have the Tui JV partners got until the gas has to be piped or re-injected back into the field?

[notie]

my friend told me he has seen that coal is being stock piled at Lyttleton Harbour, and hes seen it with his own eyes...
can anyone confirm if it is Pike River Coal?
:cool:
.^sc

That coal is probably coal from Stockton which solid energy mines then rails to
Lyttelton.

[notie]

What is the hangup with dividends in such a time like this. If nzo gave away a big divi this would reflect badly i mean if nzo cannot find a better avenue to spend there cash you hav 2 wonder are they looking in the rite places or are there expectations too high.

divis aren't the right option at the moment. They need to be reinvesting in new opportunities not giving money back to shareholders. As it is they have missed their chance to pick up cheap deals in buying other production projects or companies. They should of moved on this late last year when the price of oil was down. Interesting to see that they are signalling they want to buy production assets which typically are based on the current price of oil.

[digger]

divis aren't the right option at the moment. They need to be reinvesting in new opportunities not giving money back to shareholders. As it is they have missed their chance to pick up cheap deals in buying other production projects or companies. They should of moved on this late last year when the price of oil was down. Interesting to see that they are signalling they want to buy production assets which typically are based on the current price of oil.

With the market looking more each day like it is going to turn down again NZO might turn out to be doing just the right thing.Another wave of negative finanical news and deals are going to be a lot better than last time.This time it could be a credit card crunch which will cause a lot of slow down if the comsumers are forced to pay back debts.
It is just too big a call to say NZO has missed or will get the deal of a lifetime by waiting. No-one knows what is happening or how this finanical crsis will play out.The conserative approach in these time is the best coa-rse of action and that is what NZO is doing.My take is that the best deals are yet to come and that will be certainly the case if the markets head south again for any period of time.

[fish]

With the market looking more each day like it is going to turn down again NZO might turn out to be doing just the right thing.Another wave of negative finanical news and deals are going to be a lot better than last time.This time it could be a credit card crunch which will cause a lot of slow down if the comsumers are forced to pay back debts.
It is just too big a call to say NZO has missed or will get the deal of a lifetime by waiting. No-one knows what is happening or how this finanical crsis will play out.The conserative approach in these time is the best coa-rse of action and that is what NZO is doing.My take is that the best deals are yet to come and that will be certainly the case if the markets head south again for any period of time.

Fully agree -the market downturn could ultimately be beneficial for nzo-

Not only for acquiring good value assets but also the nz dollar is weakening-hence the approx $100million in us dollars will give a good currency gain .

As for notie saying its not a good time for a dividend their is no doubt he is up to his mischief again-bear in mind he is not a nzo shareholder .
The financial year to june 30 is now over . Nzo should soon announce their annual results-
?approx $100 million profit . They will have paid a lot of tax . An annual dividend is a good use of tax credits . Their stated policy is to pay a reasonable annual dividend subject to needs . With $200 m in the bank a 10c div is less than $40m plus additional tax credits of about 19m could be dished out .
Still plenty of money left in the bank plus ongoing income-next year kupe ,prc , tui plus additional development drills tui ne/sw

[arjay]

Fully With $200 m in the bank a 10c div is less than $40m plus additional tax credits of about 19m could be dished out .
Still plenty of money left in the bank plus ongoing income-next year kupe ,prc , tui plus additional development drills tui ne/sw

plus a heap of happy shareholders.

[Sehnsucht888]

Don't hold your breath though. The stated plan is to announce the dividend with the annual results - end of August.

Dividends seem to be a sign of a solid company, so is a good sign.

I personally am a bit disappointed that we haven't heard more, or seen more in terms of taking advantage of opportunties, as foretold. However, we don't know the details of what came up, and $ invested in a struggler - say APX would not have helped NZO holders.
We have to assume that their are reasonaable reasons beyond why we are here - the directors have big $ invested, and will not be reckless - maybe too cautious, but perhaps better that we are not making $10 than loosing $20.

[digger]

With the market looking more each day like it is going to turn down again NZO might turn out to be doing just the right thing.Another wave of negative finanical news and deals are going to be a lot better than last time.This time it could be a credit card crunch which will cause a lot of slow down if the comsumers are forced to pay back debts.
It is just too big a call to say NZO has missed or will get the deal of a lifetime by waiting. No-one knows what is happening or how this finanical crsis will play out.The conserative approach in these time is the best coa-rse of action and that is what NZO is doing.My take is that the best deals are yet to come and that will be certainly the case if the markets head south again for any period of time.


Can not every remember quoting myself before but read this this afternoon. Basically says that 1000 Trillion is owed as derivaties and the world GDP is 55 trillion. So in the last 30 years and mostly the last 15 we have spent ourselves into the sh-it big time.Worst i do not clearly know what a derivatives is and strongly suspect that no one else does either. If these finanical genius really knew what a derivative was do you think we would have gone this far before pulling the plug??
This is why NZO most likely has the best opportunities in front of them and have not missed the train as Notie likes to go on about.
On the dividend front i agree we need one of some size as the NZ market just likes them and the lending side requires a consistent div policy. Maybe we will discover some oil in Romania and after the dividend the SP will rocket as with PPP.

[shasta]

Fully agree -the market downturn could ultimately be beneficial for nzo-

Not only for acquiring good value assets but also the nz dollar is weakening-hence the approx $100million in us dollars will give a good currency gain .

As for notie saying its not a good time for a dividend their is no doubt he is up to his mischief again-bear in mind he is not a nzo shareholder .
The financial year to june 30 is now over . Nzo should soon announce their annual results-
?approx $100 million profit . They will have paid a lot of tax . An annual dividend is a good use of tax credits . Their stated policy is to pay a reasonable annual dividend subject to needs . With $200 m in the bank a 10c div is less than $40m plus additional tax credits of about 19m could be dished out .
Still plenty of money left in the bank plus ongoing income-next year kupe ,prc , tui plus additional development drills tui ne/sw

Fish

A few pages back i calculated a rough figure suggesting that NZO would likely lose on the $US cross rate this quarter.

Will be interesting to see what actually happened.

I had worked out the last years FX gains could fund the 10c divvie alone!

[Crypto Crude]

notie-That coal is probably coal from Stockton which solid energy mines then rails to
Lyttelton.


ok thanks for that notie...
my friend said that coal had only been stockpiled for 6 weeks..
NZO is due for a big boost later this year...
a stock that in the past dissapointed the market for so long is going to take much longer for its real value to be reflected in the share price...
patience...
3 bucks next year if TUI success later this year...
downside protected...
risk return that gods dream of...
bye for now...
:cool:
.^sc

[bermuda]

ok thanks for that notie...
my friend said that coal had only been stockpiled for 6 weeks..
NZO is due for a big boost later this year...
a stock that in the past dissapointed the market for so long is going to take much longer for its real value to be reflected in the share price...
patience...
3 bucks next year if TUI success later this year...
downside protected...
risk return that gods dream of...
bye for now...
:cool:
.^sc

Shrewdy,
NZO is your best friend.

[Ponda]

That looks like a good announcement.
See what the market thinks of it!

Disc: Hold NZO

[digger]

That looks like a good announcement.
See what the market thinks of it!

Disc: Hold NZO

I assume you are refering to NZO joining the Hoki drilling which is not available for another 15 minutes,which is a long time in the oilers world.

[Ponda]

Hi Digger,
I'm not sure what you mean by it's not available for another 15 minutes.
I read the Ann before I posted.
Unsure how I managed to read it, but yes, I was referring to the Hoki drilling

[digger]

Hi Digger,
I'm not sure what you mean by it's not available for another 15 minutes.
I read the Ann before I posted.
Unsure how I managed to read it, but yes, I was referring to the Hoki drilling

Hi Ponda,
I am reading from the directbroking site and at the time it was not available for 15 minutes.You must have read it from somewhere else.
Now the Hoki site was that not suppose to hold up to 80 million barrels potential.Could be sea water but it is good to get back hopeing. This drill and thril stuff suits my personality.
Doubt the market will be interested until nearing drilling.Time NZO got a few hits on board.

[bermuda]

Can not every remember quoting myself before but read this this afternoon. Basically says that 1000 Trillion is owed as derivaties and the world GDP is 55 trillion. So in the last 30 years and mostly the last 15 we have spent ourselves into the sh-it big time.Worst i do not clearly know what a derivatives is and strongly suspect that no one else does either. If these finanical genius really knew what a derivative was do you think we would have gone this far before pulling the plug??
This is why NZO most likely has the best opportunities in front of them and have not missed the train as Notie likes to go on about.
On the dividend front i agree we need one of some size as the NZ market just likes them and the lending side requires a consistent div policy. Maybe we will discover some oil in Romania and after the dividend the SP will rocket as with PPP.

Hi Digger,
Dont be concerned that you dont understand Derivatives. That dipstick Greenspan openly admitted he didnt understand them either. Can you believe that? A dipstick for not understanding what took America down but also a dipstick for admitting it.

Anyway, DS will be pleased to have picked up 10% of Hoki. Should be an interesring summer for NZO.

[Casa del Energia]

And of course - the market doesn't even bat an eyelid. NZOs rising star could outshine a super-nova at forty paces and still there'd be no reaction. 'They' must be dead.

A niggling thought, though - I wonder if NZO was just brought in because Shell thought the original prospect (that contains HOKI) was considered too small for them to bother with and pulled out leaving the remaining partners looking to bring in 'someone else' - NZO, if so - it's a little miffing to be 'second choice'. Still, Shell may well live to regret it.

[digger]

And of course - the market doesn't even bat an eyelid. NZOs rising star could outshine a super-nova at forty paces and still there'd be no reaction. 'They' must be dead.

A niggling thought, though - I wonder if NZO was just brought in because Shell thought the original prospect (that contains HOKI) was considered too small for them to bother with and pulled out leaving the remaining partners looking to bring in 'someone else' - NZO, if so - it's a little miffing to be 'second choice'. Still, Shell may well live to regret it.

Some time way back in the past i think Shell gave up TUI as it was thought to be just gas and they lost interest and surendered the permit.
Think Arjay told me something about that,but maybe i am getting mixed up with some other near by permit. So Shell has got NZ wrong at least once.

[impacman]

I think it would be fair to say that Shell Int criteria are about scale and roi - not just roi. If roi is not big they will let it slide. That is why there is so much good potential for second and third etc tier operators around the globe.

[Crypto Crude]

You put your right foot in,
You put your right foot out,
You put your right foot in
And you shake it all about.
You do the Hoki Pokey
And you turn yourself around,
That's what it's all about.
http://www.sjgs.com/spot.gif
..^sc and the Hoki pokey

[Unicorn]

And of course - the market doesn't even bat an eyelid. NZOs rising star could outshine a super-nova at forty paces and still there'd be no reaction. 'They' must be dead.

A niggling thought, though - I wonder if NZO was just brought in because Shell thought the original prospect (that contains HOKI) was considered too small for them to bother with and pulled out leaving the remaining partners looking to bring in 'someone else' - NZO, if so - it's a little miffing to be 'second choice'. Still, Shell may well live to regret it.

No niggling thoughts from me. This looks like a very opportune arrangement for NZO. Shell has been looking at leaving New Zealand, with all of its assets up for sale. Always good to find a keen seller.

[macduffy]

No niggling thoughts from me. This looks like a very opportune arrangement for NZO. Shell has been looking at leaving New Zealand, with all of its assets up for sale. Always good to find a keen seller.

Shell have previously stated that they're not withdrawing from exploration and production in NZ. It's their retailing and distribution interests, including their shareholding in the refinery, that they're interested in selling.
My guess is that they are freeing up funds to further their interests in Australian coal seam gas.

[Casa del Energia]

Yes, having thought about it overnight - it is natural for Shell to have a different focus and scale requirement. I therefore retract my niggles.

Bring on final quarter 2009 - it should be a ripper.

(And Shrewd - I was waiting for the 'Hoki' jokes - glad someone broke the ice)

[Ponda]

SC,
I second CdE's comments. Gave me a laugh first thing in the morning.
Thanks

[Ponda]

Now the market is having a sniff at it. Up 2cents this morning on light volume, but the buyers are starting to stack up on the right side.

I like the idea that they will be drilling around 'late spring/ early summer' should be October. Not long to go but in Diggers words '15 minutes is a long time in oilers world'

[boysy]

NZOG gets a taste for Hoki

Neil Ritchie, New Zealand
Friday, 10 July 2009

NEW Zealand Oil & Gas is farming into the offshore Taranaki licence that contains the largest untested known structure in the western margin of the Taranaki Basin, the Hoki prospect in licence PEP 38401.



Hoki Photo courtesy of Paddy Ryan. 'Deep-sea creatures', Te Ara - the Encyclopedia of New Zealand

NZOG said yesterday afternoon it would acquire a 10% stake in the permit from Austrian giant and Maari operator OMV, subject to partner and government approval.

The 447 square kilometre PEP 38401 is located about 150km northwest of New Plymouth and the Hoki prospect, believed to be up to 50sq.km or so in size, lies in about 300m of water.

Hoki, which is also the name one of New Zealand’s most popular commercial fish species, is the first of perhaps four or five wells scheduled to be drilled by the semi-submersible Kan Tan IV rig when it arrives from Australia in September or October.

NZOG said the terms of its agreement with OMV were confidential but that NZOG’s financial commitment, including the drilling of Hoki-1, would be about $NZ10 million ($A8 million).

The Hoki-1 well will test both the primary Island Sandstone reservoir and a secondary target in the North Cape formation.

NZOG chief executive David Salisbury said his company had been talking for some time with OMV about acquiring a stake in the permit.

“I am very pleased that we have been able to reach a commercial arrangement to the satisfaction of both parties,” he said.

“While exploration is always risky, NZOG’s internal assessment is that Hoki has the potential to be a large oil-bearing reservoir.

“An additional attraction is that the prospect is ‘drill mature’ and that drilling arrangements are already in place.”

He added the permit was a welcome addition to NZOG’s exploration portfolio, referring to NZOG’s five permits in the offshore Taranaki Basin and one in the Canterbury Basin.

NZOG public affairs manager Chris Robert told PetroleumNews.net that the Hoki well would be classed as a wildcat, as the only other well known to have been drilled in the area was the 1976 Tane-1 well “which was not a discovery though it established that reservoir sands, porosity, etc, were present”.

He said the partners were not releasing any pre-drill estimates regarding possible reserves for Hoki.

Roberts also countered recent criticism by some New Zealand brokers that about 40% of New Zealand Oil & Gas' investments were currently "problematic” and holding cash was not an efficient use of shareholder funds.

He said it had been entirely appropriate for NZOG to hold about $NZ200 million in cash, mostly in United States currency-denominated New Zealand bank accounts, during the worst of the global financial crisis.

“That served us extremely well. Now we are starting to utilise some of those funds, but taking the time necessary to be sure we do the best deals in an industry that is by definition risky.”

The PEP 38401 partners will be operator AWE (50%), OMV (21.25%), Todd Energy (18.75%) and NZOG (10%).

[blockhead]

Couldnt help myself, can't resist the thrill of a drill, had to top up with a few more today.

[shasta]

Couldnt help myself, can't resist the thrill of a drill, had to top up with a few more today.

You sly dog Blocky, the market takes a ho hum approach & barely acknowledges the ann.

A while back NDO's SP surged when a very irresponsible ann suggested up to 11.6b/bbls potential in one of there deep water Phillipine permits.

In reality the costs of drilling the deep water offshore permit would be extremely high & risky, with no guarantee of a commercial find.

I'm glad the JV partners aren't announcing any estimates.

After Hector disappointed, the SP fell away

The market would react very warmly to a surprise find @ Hoki

NZO now has a reasonable forward drilling program, as well as Kupe to look forward to during spring/summer

[macduffy]

Yes, the shareholders of AWE, with 50% of the action here, aren't getting too excited.

AWE SP down a cent today.

[swissboy]

Why should it make any difference to AWE shareprice, if NZO take a 10% holding in Hoki from Shell? The question does not make sense.
Also many have been complaining that NZO are sitting on their hands with their pockets full of money not taking any risks or adventures with their war-chest well I for one am happy with dropping the odd 10 mill in various places and if one comes good so much more for me.

[macduffy]

Why should it make any difference to AWE shareprice, if NZO take a 10% holding in Hoki from Shell? The question does not make sense.
Also many have been complaining that NZO are sitting on their hands with their pockets full of money not taking any risks or adventures with their war-chest well I for one am happy with dropping the odd 10 mill in various places and if one comes good so much more for me.

No, it doesn't make any difference to AWE at all.

It's just that owning 50% of Hoki, 5 times the interest of NZO, doesn't seem to be exciting any market action in AWE whose SP has been pretty flat for the last nine months.

NZO shareholders may see things a bit differently.

:)

[Nitaa]

Daily ShareChat: New Zealand Oil & Gas
By Jenny Ruth

Monday 13th July 2009
Text too small?

New Zealand Oil & Gas may have already missed the best value opportunities to spend $193 million received from the exercise of options a year ago, says John Kidd at McDouall Stuart.

"Shareholders have a growing basis to ask hard questions, starting with: what is the strategy?," Kidd says.

When the options were exercised, oil was trading at $US149 a barrel. Option holders "were reacting rationally to what was, at precisely the right time, a perfect cocktail of positive NZ Oil & Gas economics," he says.

"In doing so, however, (the option holders) took a leap of faith" because there was no investment mandate for the option money.

"Twelve months on, other than ongoing ‘trust us"-like assurances, there continues to be little in the way of strategic guidance from NZ Oil & Gas," Kidd says.

"In the meantime, there is growing evidence to suggest that the trough of the current economic cycle may have passed, bringing with it concern that the most distressed and perhaps best value opportunities may already have been missed."

Despite this, NZ Oil & Gas shares still present "fundamentally attractive metrics." Kidd currently values the shares at $1.88 and the company has "genuine and significant" near-term exploration potential from its Tui joint-venture drilling program.
.................................................. ........................................

Although there is merit in the above, it seems a bit ironic that on one hand theh bag nzo and the other hand say its a buy. Also need to remember that McDougall is in bed with nzo to a degree.

[Chris Roberts]

To correct some earlier posts on this thread: NZOG is not acquiring its 10% stake in the Hoki permit from Shell. Shell has no involvement in this permit.
NZOG has agreed to acquire a 10% stake in PEP 38401 from OMV. Subject to partner and ministerial approval, the new participating interests will be:
AWE New Zealand Pty Ltd (Operator) 50%
OMV New Zealand Ltd 21.25%
Todd Petroleum Mining Company Ltd 18.75%
New Zealand Oil & Gas Ltd 10%

[Nitaa]

To correct some earlier posts on this thread: NZOG is not acquiring its 10% stake in the Hoki permit from Shell. Shell has no involvement in this permit.
NZOG has agreed to acquire a 10% stake in PEP 38401 from OMV. Subject to partner and ministerial approval, the new participating interests will be:
AWE New Zealand Pty Ltd (Operator) 50%
OMV New Zealand Ltd 21.25%
Todd Petroleum Mining Company Ltd 18.75%
New Zealand Oil & Gas Ltd 10%
Thanks Chris. Appreciate any efforts to clear up misunderstandings. Please continue to do so.

Regards,

Nita

[boysy]

very interesting article it doesnt name names but NZO must be a possibility

EXPLORATION minnow Green Gate is disappointed but not distraught at listed Australian junior GB Energy withdrawing from its sole onshore-offshore Taranaki licence less than a year after entering the New Zealand exploration sector.


“We are probably the best placed of all the juniors in New Zealand to complete our work program commitments,” Green Gate managing director Stacey Radford told PetroleumNews.net from Christchurch today.

“We will have to look at our work program but we have the advantage of owning our own rig, the NRG Rover, which is stacked in Christchurch right now but due to go to Taranaki in September or October to work for another joint venture,” Radford said.

He declined to name that joint venture or say where the NRG rig, which is capable of drilling to depths of 4000m or so, would be operating.

However, he said the company was still keen on drilling licence PEP 51150, of which Green Gate now holds 100% following GB Energy’s withdrawal, early in 2010.

Perth-based GB said last Friday that it was assigning its 66.7% stake in PEP 51150 to Green Gate, as well as terminating its Sever licences and preparing to sell its Salas licence, both in the Czech Republic.

Earlier this year Radford told PNN that he held high hopes for PEP 51150 – one of nine new Taranaki leases awarded last September – with the permit being north of the offshore Kupe gas-condensate field and adjoining Origin Energy’s Rimu-Kauri-Manutahi and Waihapa-Ngaere fields.

The lease had some existing open-file 3D seismic data available that had enabled Green Gate to identify several prospects, including one at drillable status.

“We are very well positioned in this licence,” Radford added today.

[macduffy]

The question's probably been asked before but is Stacey Radford any relation of A R (Tony) ?

[friedegg]

are the results announced beginning or end of august,i thought it was the beginning?i want to know what my dividend is

[Unicorn]

For at least the last few years the results have been announced at the end of August. The extra dividend announcement last year, was announced at the same time as the results. At that time the board said "Going forward, the Board's policy is to distribute a reasonable proportion of profit by way of an annual dividend. Future dividends are expected to be announced to coincide with release of the annual results. "

[777]

I've budgeted on 5c.

[shasta]

I've budgeted on 5c.

Me too, can't see any point in paying upwards of 10c whilst NZO are still pursuing real growth opportunities.

Once Kupe is up & running we may see a 5c interim + 5c final dividend

But as Unicorn has pointed out, NZO's dividend policy is quite clear!

[Sideshow Bob]

All just depends what their definition of 'reasonable' is - could be argued any which way.

[digger]

Me too, can't see any point in paying upwards of 10c whilst NZO are still pursuing real growth opportunities.

Once Kupe is up & running we may see a 5c interim + 5c final dividend

But as Unicorn has pointed out, NZO's dividend policy is quite clear!



While my personality favors the go for it policy the reality of the market is that a break in dividend stream is remembered for years and years especially from lenders and potential new investers.I found this a hard and annoying lesson,but now accept that we should be pragmatist and accept the market works the way it works and leave it at that.Therefor my 2 cents worth says NZO should do everything to maintain the dividend as near as possible to its starting position even if we have to then borrow money for an acquision. The best idea of all is the the div revestment that i have mentioned many times before.
Roll on end of August and we will then know how the powers that be see and shape the outcome.
On another topic it looks like the world markets will finish the week on a high after the gloomy start. Actually the biggest and shortest turn around i can remember.Mad

[macduffy]

Hi digger.

While I would agree with you that in general the market has a long memory and doesn't readily forgive reduced/missed dividends, I think it views oil and mining a bit differently and recognises the "feast or famine" nature of these companies' operations. The number of O & M companies paying regular dividends isn't high but it doesn't necessarily affect their SP's unduly, which is influenced more by expectations of the next big find or deal.

Disc. Not holding NZO but well into PPP, AWE, AOE and BOW.

;)

[Casa del Energia]

I was hoping that the negative outlook given by Fitch would plummet the dollar thus helping the NZ price of oil (and coal). No such luck - the kiwi rebounded.
Not that I personally take any credence in credit rating agencies announcements from the pulpit - - and I suspect the rest of the planet is beginning to take their prophetical visions with a grain of salt as well. (viz: really good ratings for finance outfits that had bought debts so toxic that they made sodium cyanide look like a health tonic) - - Well, I still hold out hope that another agency will come along and rate the sovereign debt at F minus, with NZO having NO debt and oil still sold in USD - life will be good.

And now for an apology. Digger - some time ago you said that China will pull the rest of the world out of recession when the Olympics have finished - I thought at the time that you were completely wrong and that China was a dead (peking) duck. I was wrong. Even a small glance at (eg) the BBC business news tells us that China is on the move and will soon be the leading cause for rampant oil prices over time. Sorry I ever doubted you, Digger. I have taken the appropriate steps to fall on my own sword.
(A quick aside - Mrs Casa just holidayed in China - she said the whole place is a boom town again… and the toilets are actually clean these days).

[shasta]

I was hoping that the negative outlook given by Fitch would plummet the dollar thus helping the NZ price of oil (and coal). No such luck - the kiwi rebounded.
Not that I personally take any credence in credit rating agencies announcements from the pulpit - - and I suspect the rest of the planet is beginning to take their prophetical visions with a grain of salt as well. (viz: really good ratings for finance outfits that had bought debts so toxic that they made sodium cyanide look like a health tonic) - - Well, I still hold out hope that another agency will come along and rate the sovereign debt at F minus, with NZO having NO debt and oil still sold in USD - life will be good.

And now for an apology. Digger - some time ago you said that China will pull the rest of the world out of recession when the Olympics have finished - I thought at the time that you were completely wrong and that China was a dead (peking) duck. I was wrong. Even a small glance at (eg) the BBC business news tells us that China is on the move and will soon be the leading cause for rampant oil prices over time. Sorry I ever doubted you, Digger. I have taken the appropriate steps to fall on my own sword.
(A quick aside - Mrs Casa just holidayed in China - she said the whole place is a boom town again… and the toilets are actually clean these days).

Article specifically mentions NZO (& Greymouth Petroleum :confused:) as not benefitting, but maybe this could provide some opportunities if other companies decide to exit/sell down?

http://www.stuff.co.nz/business/industries/2600730/IRD-closes-tax-loophole

[boysy]

talk in the article of revenue from nzo operations for the past 2 years i belive these have yet to be released so we can conclude that nzo revenue for the year to june 2009 is

365 million( revenue for the last 2 years to june 2009) - 222.8 million ( reveune to june 2008) = around 142 million revenue ?

[Casa del Energia]

Article specifically mentions NZO (& Greymouth Petroleum :confused:) as not benefitting, but maybe this could provide some opportunities if other companies decide to exit/sell down?

http://www.stuff.co.nz/business/industries/2600730/IRD-closes-tax-loophole

Ever since Stuff brought out their new improved format - it crashes my browser. (But I won't upgrade my system or anything like that - why should some else's goof up become my technical fix? The NZ herald is very good anyway).

"We must beware of needless innovations, especially when guided by logic." - Winston Churchill

[winner69]

Ever since Stuff brought out their new improved format - it crashes my browser. (But I won't upgrade my system or anything like that - why should some else's goof up become my technical fix? The NZ herald is very good anyway).

"We must beware of needless innovations, especially when guided by logic." - Winston Churchill


Mind you since HZ Herald changed their format recently it takes so so so long to load as well ..... told Stuff they were no longer my home page ... now telling NZ Herald the same

[POSSUM THE CAT]

What browser are you people using. I have no problem with either Stuff or NZ herald using Mozilla

[shasta]

What browser are you people using. I have no problem with either Stuff or NZ herald using Mozilla

I upgraded to IE8 & have no problems with Stuff or NZ herald.

Agree with Winner though, NZ Herald was better as it was.

Boysy - those figures quoted would likely be based on the royalities received rather than actual figures, which would have to be annouced to the market.

[boysy]

has anyone else noticed the new tab on the nzog website showing monthly production stats shows the decline in tui.

http://www.nzog.net/f37,144967/144967_Tui_Production_July07-June09.JPG

[winner69]

has anyone else noticed the new tab on the nzog website showing monthly production stats shows the decline in tui.

http://www.nzog.net/f37,144967/144967_Tui_Production_July07-June09.JPG


Trend (from May08 to present) suggests all gone in 6 to 7 months time .... nil production after that?

Is that whats's meant to happen?

[boysy]

no i think the decline is ment to decrease at a decreasing rate if i remember rightly it is ment to start flattening out now around the 10,000 bopd mark. Hopefully the TUI exploration will help fast track finds if discovered as the decline is very aparent now. To date 23.6 million barrels have been produced and the field was is thought to contain 50.1 million barrels.

[Unicorn]

Trend (from May08 to present) suggests all gone in 6 to 7 months time .... nil production after that?

Is that whats's meant to happen?

No, that is not the plan. Almost half the recoverable oil has been recovered to date, and production is now down to about 40% of the average over the first 2 years. So it would take at least another 5 years to recover the remainder, if current production rates continue. Because production will decline further, the field will probably be productive for something closer to 10 years.

If any new accumulations are found a substantial increase in output can be expected as they come on stream, because the water cut from them will be very low at first. And if the existing wells can be left to rest for a while their production will also be stronger for a while after they are brought back. Success in the drills later this year could add substantially to the value of the field.

Almost two years of production now and still running about 15,000 barrels a day, so interesting to look back on the forecast from 2 years ago ... "Still, Tui is small and its oil fields shallow. Within two years its flow rates are forecast to plunge to less than 10,000 barrels a day as the so-called water cut, or percentage of water in the oil increases. Over the life of the project Umuroa will handle 10 times as much water as crude."

[digger]

And now for an apology. Digger - some time ago you said that China will pull the rest of the world out of recession when the Olympics have finished - I thought at the time that you were completely wrong and that China was a dead (peking) duck. I was wrong. Even a small glance at (eg) the BBC business news tells us that China is on the move and will soon be the leading cause for rampant oil prices over time. Sorry I ever doubted you, Digger. I have taken the appropriate steps to fall on my own sword.
(A quick aside - Mrs Casa just holidayed in China - she said the whole place is a boom town again… and the toilets are actually clean these days).


How long will China finance America?
Robert Peston, BBC Online
China's foreign exchange reserves have soared.

In the second quarter of the current year, they rose by $178bn to $2.132 trillion to exceed $2 trillion for the first time.

According to Bloomberg this is a record increase.

On this occasion, the primary cause is not the great surplus of China's exports over its imports.

It's the result of overseas investors identifying China as the strongest of the world's major economies and pouring money into property and into shares: the Shanghai Composite Index has jumped 74% this year...
(15 July 2009)

I think that little article from Energybulletin say it all. The world is finally slowly moving away from the US ruling the show. It really is the end of the US century and the beginning of the Asia era. Nothing more to say.We stuffed it up in the west spending 20% more than our income each year on frills we did not need as a way of life.A down hill way and now the bills are coming home to roost.
Note the ecomomic difference between the US and China is not just the china surplus but the US deficit as well.
The king is dead --long live the king

[macduffy]

So I wonder what China will do about the billions (trillions?) of dollars of USD bonds and other investments that they're holding?

Can't be sold - no-one else has the wherewithall to buy. Hold to ( devalued) maturity? Then what?

Apologies for running off the NZO thread.

[dsurf]

I think it is clear that the surplus will be very quietly and slowly devoted to buying the mineral and energy resources required by China to lift the standard of living of it's citizens. It will be slow as IMO that the longer the west thinks they rule the roost the better deals and access to deals China will get. Also holding those US treasuries / debt give it a lot of leverage in the world. China isthe 2nd largest sharemarket. If it wasn't for e-commerce / tech the US's no1 position would already have gone.

[geezy]

NZO thread in the second page? unbelievable!

wake up everyone.

[Dr_Who]

So I wonder what China will do about the billions (trillions?) of dollars of USD bonds and other investments that they're holding?

Can't be sold - no-one else has the wherewithall to buy. Hold to ( devalued) maturity? Then what?

Apologies for running off the NZO thread.

They are using it to raise cash to go on a spending spree. China's commodities reserve is a natural hedge to the USD dollar exposure.

[digger]

China
Premier Wen announced that Beijing is going to use its $2.1 trillion in foreign exchange reserves to buy foreign assets. This is the first time that China has officially announced that it is government policy to directly support its large state-owned corporations by purchasing offshore assets.
China’s purchase of non-financial assets reached $40.7 billion last year, up from $143 million in 2002. Oil and other natural resource assets are expected to be at the top of Beijing’s shopping list.
The move is in response to China’s concerns over the possibility that US deficits will eventually lead to devaluation of the US dollar.

[shasta]

China
Premier Wen announced that Beijing is going to use its $2.1 trillion in foreign exchange reserves to buy foreign assets. This is the first time that China has officially announced that it is government policy to directly support its large state-owned corporations by purchasing offshore assets.
China’s purchase of non-financial assets reached $40.7 billion last year, up from $143 million in 2002. Oil and other natural resource assets are expected to be at the top of Beijing’s shopping list.
The move is in response to China’s concerns over the possibility that US deficits will eventually lead to devaluation of the US dollar.

Tapis price back over $US70/bbl - now at $US71.04 (+1.29)

The price in $NZ = $US71.04/.6533 = ~$NZ108/bbl (still a great margin for NZO)

And after a quick look - there are 19 (+3) uncontracted rigs in the Asia/Australia region

http://www.upstreamonline.com/market_data/?id=markets_rig

Now is as good a time as any to grab one, must be cheaper when they are lying around available for use. :rolleyes:

[Hoop]

Tapis price back over $US70/bbl - now at $US71.04 (+1.29)

The price in $NZ = $US71.04/.6533 = ~$NZ108/bbl (still a great margin for NZO)

And after a quick look - there are 19 (+3) uncontracted rigs in the Asia/Australia region

http://www.upstreamonline.com/market_data/?id=markets_rig

Now is as good a time as any to grab one, must be cheaper when they are lying around available for use. :rolleyes:

Yes it seems that the weakness that dented the up trend of the POO recently, has ended. Could be a good time to top up on NZO as it is looking bullish.

[Jay]

Once it goes over 1.65 Hoop. This had been a resistancemore than once in the past.
Hope it will then turn into a support

[Hoop]

Once it goes over 1.65 Hoop. This had been a resistancemore than once in the past.
Hope it will then turn into a support

Yes Jay... 1.65 is a major level and as you have obviously noticed... about 14 months old now .. from the shoulder points of the Mid April - mid September 2008 H&S pattern...

To penetrate this 1.65 resistance level would require a lot of demand but if it happens it would be an indication that this rally could be sustainable... as you correctly say that 1.65 level would then turn into a support level. A support at $1.65 would be great news and a nice launching pad up from there...however I'm jumping the gun here as the price is 1.63 so not there yet.... but chances of it happening is looking bright from my point of view....because when the price broke though the 1.40 resistance in early May it gave a TA target of 1.72 ..... 1.40 + (1.40-1.08) = 1.72 ...but the share price has since struggled to reach this target which was becoming a worry until late last week.

From my point of view NZO became bullish again when buy signals from a heap of TA indicators triggered nearly all at once around last Thursday (16th) when the price was 1.54

Phaedrus expertise may be needed to confirm...and make it simple to understand.

[Jay]

I sold mine on the way down after it hit 1.65 just recently.
Thought about buying in again but have decided to wait to see if it gets past this number first.
However, If you got in around early March (1.20-25ish - I did not) and with a 7.5% trailing stop you would still be in with stop at 1.51 by my amateur charting

[neopoleII]

end of year results arent too far away, and with all the cash in the bank, and a once a year divi policy, $1.60ish seems cheap if .08 or .10 cents is paid out, and......... kupe and pike are just about ready to suppliment next years income stream.
roll on $2 a share this time next year.

[Dr_Who]

NZO should launch a T/O of PRC with a share + cash offer. Opportunity to buy it out while the sp is low. It shouldnt cost much to take out the balance of PRC. :D

Even a 1 NZO for 1 PRC share offer to T/O PRC will have the shareholders approvals.

[the machine]

end of year results arent too far away, and with all the cash in the bank, and a once a year divi policy, $1.60ish seems cheap if .08 or .10 cents is paid out, and......... kupe and pike are just about ready to suppliment next years income stream.
roll on $2 a share this time next year.

per nzo website events calander all will be revealed on august 26.

M

[shasta]

per nzo website events calander all will be revealed on august 26.

M

Monday should be a positive day for NZO

Tapis price has jumped $3.31 to $73.06 (+4.53%)

The mainstream media never mentions the tapis price, go figure?

[COLIN]

NZO should launch a T/O of PRC with a share + cash offer. Opportunity to buy it out while the sp is low. It shouldnt cost much to take out the balance of PRC. :D

Even a 1 NZO for 1 PRC share offer to T/O PRC will have the shareholders approvals.

NZO have stated that they wish to concentrate on being an oil and gas explorer/developer/producer. Owning coal mines is outside their mainstream activities. This being the case, they will eventually look to extricate themselves from PRC - hopefully when coal is flowing, prices are good, and the future looks rosy, when they can maximise the premium for their major stake.
As an NZO holder I certainly hope they don't increase their exposure to PRC, although they may have to come to their aid again should there be any further delays in getting the black stuff out of the ground and onto the water; until that happens there are still development risks with PRC and I much prefer NZO's involvement to remain where it is.

[digger]

I am not normally a inbetween sort of person but this time i find myself exactally at the half way point from Dr Who to Colin. Taking out Pike at what always is a permium is a very poor use of NZO's cash pile. There are just better deals around and i am sure are being looked at. NZO should buy more at a discount if it helps PRC get over some hurtle but not otherwise.If NZo can pick up another 10% for bugger all then go for it as they did with PPP. The taking out another company is when the economics get shady as the final 1/3 always want the moon and a bit more.
One of the very good uses of NZO cash pile after a small div is to take blocking stakes in other companies. I wonder why NZO has not done this.Sometimes these stakes can become very valuable. Hopefully this 300 million deal talked about in the press will surface before tooooo long.

[Mr Tommy]

What 300 million deal is that Digger ?

Maybe NOG will buy up NZ refining and the gas stations from Shell, and own the whole supply chain!
Imagine that, we could have Tui Petrol. Yeah Right.

[fabs]

Pig swarming season starting early this year?

[digger]

What 300 million deal is that Digger ?

Maybe NOG will buy up NZ refining and the gas stations from Shell, and own the whole supply chain!
Imagine that, we could have Tui Petrol. Yeah Right.

The 300 million deal is my guess on the size of the purchase NZO might be looking at.I arrive at this by taking the 100 million debt that was mentioned in the DS release. From that i have taken the liberity of adding the cash on hand plus near future earnings ,less the dividend. So the up size could be 300 million,but it is entirely an upper size made up by me to get a top look at what might happen. In the long abscence of info the guess fill in to fill the void.

[shasta]

The 300 million deal is my guess on the size of the purchase NZO might be looking at.I arrive at this by taking the 100 million debt that was mentioned in the DS release. From that i have taken the liberity of adding the cash on hand plus near future earnings ,less the dividend. So the up size could be 300 million,but it is entirely an upper size made up by me to get a top look at what might happen. In the long abscence of info the guess fill in to fill the void.

That size acquistion would easily get the likes of TAP (even without debt)

TAP & COE are cashed up, no debt (but with smallish reserves)

TAP is still my pick, if NZO haven't looked into this already i'd be surprised

[Jay]

I see that 1.65 as resistance is still holding.
May have to wait until results and dividend are announced before pushing past this.

[digger]

I see that 1.65 as resistance is still holding.
May have to wait until results and dividend are announced before pushing past this.


NZO never does well on Monday. The NZ market might open first but it is not a leader for global equities. Wait until Tuesday or Wednesday ,then see if the resistance is still holding.

[Bixbite]

The 300 million deal is my guess on the size of the purchase NZO might be looking at.I arrive at this by taking the 100 million debt that was mentioned in the DS release. From that i have taken the liberity of adding the cash on hand plus near future earnings ,less the dividend. So the up size could be 300 million,but it is entirely an upper size made up by me to get a top look at what might happen. In the long abscence of info the guess fill in to fill the void.

I guess we might get a new option (NZOE), e.g. one option to every five ordinary shares, the exercising price $1.90.

[notie]

NZO never does well on Monday. The NZ market might open first but it is not a leader for global equities. Wait until Tuesday or Wednesday ,then see if the resistance is still holding.

well maybe if you guys keep blowing hot air it may help this stock......

North Sea next for NZOG?

[Mr Tommy]

well maybe if you guys keep blowing hot air it may help this stock......

North Sea next for NZOG?


Hey Richard why dont you post something useful for once.

[fish]

well maybe if you guys keep blowing hot air it may help this stock......

North Sea next for NZOG?

No doubt this is ignorant sarcasm
However west coast NORTHLAND seismics are looking promising and no doubt nzo has the best credentials and will be in a great position of wealth of experience -not to mention hard cash to take an appropiate position in exploration .
The webcast tomorrow could be interesting for true investors of this exciting yet safe company-
Webcast of Quarterly Report Briefing
28 July 2009
NZOG's June Quarterly Activities Report is being released on Wednesday 29 July 2009. CEO David Salisbury will give a briefing which will be webcast, beginning at 11.30am NZ time.

[Mr Tommy]

Webcast link is on homepage, under Whats new:

http://nzog.net/

[digger]

What 300 million deal is that Digger ?

Maybe NOG will buy up NZ refining and the gas stations from Shell, and own the whole supply chain!
Imagine that, we could have Tui Petrol. Yeah Right.


Quite an interesting idea.Where did you dig that up from?How much is NZ refining worth and how much for the gas stations? Why are shell selling the gas stations? Buying the gas stations would certainly force NZO into the public eye.
Yes it does add an interesting aspect to the possible buy list,and just shows how much number crunching must be going on at the head office,with every opportunity having ti be looked at. Now i suppose Mr tommy after raising the interest you will tell us you were only joking.

[shasta]

Quite an interesting idea.Where did you dig that up from?How much is NZ refining worth and how much for the gas stations? Why are shell selling the gas stations? Buying the gas stations would certainly force NZO into the public eye.
Yes it does add an interesting aspect to the possible buy list,and just shows how much number crunching must be going on at the head office,with every opportunity having ti be looked at. Now i suppose Mr tommy after raising the interest you will tell us you were only joking.

Digger

Thats a bridge or two too far for NZO.

Shell's 17% of NZR is worth ~$300m by itself

But they wanted to sell around $1b worth of down stream assets

http://www.stuff.co.nz/business/industries/2594901/Shell-NZ-ops-sale-to-Indians

http://www.stuff.co.nz/business/industries/2405932/Shells-sell-up-all-or-nothing

[Mr Tommy]

Quite an interesting idea.Where did you dig that up from?How much is NZ refining worth and how much for the gas stations? Why are shell selling the gas stations? Buying the gas stations would certainly force NZO into the public eye.
Yes it does add an interesting aspect to the possible buy list,and just shows how much number crunching must be going on at the head office,with every opportunity having ti be looked at. Now i suppose Mr tommy after raising the interest you will tell us you were only joking.

Sorry Digger I was just thinking out loud. Would be an interesting change in direction though.

[777]

Well this clears up whether a dividend is going to be paid.

NZO
29/07/2009
DRP

REL: 0931 HRS New Zealand Oil and Gas Limited

DRP: NZO: NZOG Dividend Reinvestment Plan

The Board of New Zealand Oil & Gas Ltd has announced the establishment of a
Dividend Reinvestment Plan.

Under this Plan, shareholders resident in New Zealand or Australia can choose
to invest all or part of their future dividends in taking up additional NZOG
Shares, instead of receiving cash.

The Plan provides a convenient way for an NZOG shareholder to reinvest
dividends in Shares, without incurring brokerage charges. In addition, the
Board has decided that, until determined otherwise, new Shares issued under
the Plan will be offered at a discount. The number of Shares will be
calculated at a 2.5% discount to the weighted average sale price for Shares
sold on each of the first five business days immediately following the
dividend record date.

Details of the Plan and acceptance forms are being sent to shareholders,
along with the June Quarterly Activities Report which was released today.
Participation in the Plan is optional and if a shareholder takes no action
they will continue receiving dividends in cash (by cheque or direct credit to
a bank account).

It is the current policy of the NZOG Board to distribute a reasonable
proportion of profits by way of annual dividend. Dividends are expected to be
announced with the release of annual results each year. The 2008/09 annual
results are to be announced on 26 August 2009.

[manxman]

Well this clears up whether a dividend is going to be paid.



And probably presages a dividend rather larger than the directors would happily pay in cash.

[digger]

Problem is the discount in the reinvestment scheme is not big enough.The shares will rise more than 2.5% in antipication of the dividend and will cretainly fall more than 2.5% once the dividend is paid.This ends up meaning the shares that were suppost to be at a disc ount become a preium. Now i know i have been pushing for a this reinvestment ,but it must end up at an advantage to those taking part in the scheme over those taking the cash.Brieley for years had a 10% discount and others 5% but off hand have not heard one working that is as low as 2.5%.
What do others think?

[the machine]

no mention of romania in the quarterly report

M

[Bilo]

“If we were to actively engage in hedging it would presuppose that we can predict where oil prices and exchange rates are going to go. NZOG takes the view that, while we have educated opinions on medium and long term oil price trends, we are not traders. Shareholders will have their own views on short-term trends and can manage their own risk, rather than us speculating on their behalf.”

This is head in the sand stuff. Naive really, not to accept the world as it is, to accept that fluctuation occurs, and do your utmost to reduce the downside and protect the upside. No NZ exporter can expect to thrive without managing forex exposures. All NZ investment is exposed to this risk and to think that you are taking no action is dopey. Inaction is an action. There should be active assessment of risks and positions. Only the company is aware of their projected cash flows. Suggesting that investors should take care of this is ridiculous – it suggests that they should jump ship – invest in Australian oil explorers.
Clearly the bank enforced puts and calls were recognition of the importance to protect the downside of activities and a clear resolution to ensure very healthy profits while forgoing exorbitant profits. This is good management. The extent to which the company exposes itself to these risks should be a conscious decision frequently reviewed at Board level.
The above statement from NZOG indicates that another NZ exporter doesn’t realise that currency management is a greater determinant of success than productivity or efficiency. No wonder Kiwis like to invest in housing when we have managers and board members in charge of top ten companies who duck responsibilities. Kiwis attempting to go the same way as the Moa.
Bugger the depth has disappeared.
Talk about the possum in the headlights.
Next it will be: "Its not my fault that the shareholders gave me all this money and now I don't know what to do with it." Next time NZO ask for more money on the basis of "trust me I know what I'm doing" my hand will stay in my pocket.

[lissica]

Problem is the discount in the reinvestment scheme is not big enough.The shares will rise more than 2.5% in antipication of the dividend and will cretainly fall more than 2.5% once the dividend is paid.This ends up meaning the shares that were suppost to be at a disc ount become a preium. Now i know i have been pushing for a this reinvestment ,but it must end up at an advantage to those taking part in the scheme over those taking the cash.Brieley for years had a 10% discount and others 5% but off hand have not heard one working that is as low as 2.5%.
What do others think?

Most of the DRP's I'm taking part in are at 2.5% discount. Never had one as high as 5%, and if I was a dividend only investor, I wouldn't want it to be at such a big discount to dilute my holdings.

The DRP price is calculated on the 5 days following the record date, so the price should have fallen to ex-dividend levels for the calculation.

[dsurf]

Activity report was disappointing. Tui declining, Kupe delayed (could cost more - why point out the obvious?), Pike delay til November reminder. Not really good for sentiment. Looking forward to drills to lift SP & test 1.65. Low 1.50's may be visited soon & looking like an interesting buying opportunity pre div announcement in 4 weeks time. Would short now but prefer not to against long term trend.

[Sehnsucht888]

Problem is the discount in the reinvestment scheme is not big enough.The shares will rise more than 2.5% in antipication of the dividend and will cretainly fall more than 2.5% once the dividend is paid.This ends up meaning the shares that were suppost to be at a disc ount become a preium. Now i know i have been pushing for a this reinvestment ,but it must end up at an advantage to those taking part in the scheme over those taking the cash.Brieley for years had a 10% discount and others 5% but off hand have not heard one working that is as low as 2.5%.
What do others think?

FPH was only a 2.5% discount I think, and I agree, it isn't much of a premium. Down that for today right now... Market obvioulsy doesn't like it. A 4c discount really isn't much incentive when the trading range frequantly covers that over a week or so.

[macduffy]

Dividend reinvestment schemes need to be fair to all shareholders, not just to those who reinvest. For that reason 2.5% is the usual rate although many companies' schemes provide for the directors to determine this on a case by case basis.
What I object to is the practice of some companies of paying for the underwriting of the scheme which has the effect of a nil cash disbursement by the company but a dilution of the interests of those shareholders who elect to take the cash.

[arjay]

2.5% is too small. NZO SP regularly fluctuates by more than 10%. Best to take the cash, put in the bank for a few months and then buy for a bigger discount. Unless they find more oil that is.

[shasta]

Just quickly calculating the actual gains over the last year...

From the Quarterly cashflow statements

30/06/08 - FX gain of $1.2m
30/09/08 - FX gain of $12.1m
31/12/08 - FX gain of $22.9m
31/03/09 - FX gain of $3.4m

Total gains = $39.6m/390m (shares on issue) equates to about 10cps!

Looking at a Findata NZD/USD chart, since 1 April the $NZ has dropped ~10% (from around 57c to 63.5c today)

As at 31/3/09 - NZO held just under $US90m cash

$US90m @ say 0.57c = ~$NZ157m, & @ 0.635 = ~$NZ141m

That would result in a FX loss of around $NZ16m, assuming the $US a/c hasn't moved. 16m/390m = ~4cps.

Will be interesting to read the June quarterly cashflow statement!

From about 20 pages back

I'm a bit disappointed to see NZO record a $22m FX loss, that's a bit naive & careless IMO.

The $US is eroding the cash pile unnecessarily.

Perhaps they need an Accountant with some FX experience there ;)

[COLIN]

Rather than focussing on the discount rate - which doesn't seem to be out of line with practice these days - I suggest what is more relevant is that the company seems to be of the view that they can put the cash to good use.
Are we convinced about that?

[upside_umop]

From about 20 pages back

I'm a bit disappointed to see NZO record a $22m FX loss, that's a bit naive & careless IMO.

The $US is eroding the cash pile unnecessarily.

Perhaps they need an Accountant with some FX experience there ;)

I didnt think it was NZO's business to try play the FX market...most commentators even, John Key thought the NZD would have a 0.4 something against the USD.

With the kiwi being one of the most traded currencies in the world, and billions everyday traded...I'd say NZO is competing against some bigger fish than with more privy information and analysts than NZO could afford. An accountant...you implying you've been FX trading successfully shasta?!

[Taijon]

Rather than focussing on the discount rate - which doesn't seem to be out of line with practice these days - I suggest what is more relevant is that the company seems to be of the view that they can put the cash to good use.
Are we convinced about that?

Good point Colin. I guess if we are not convinced management can put the cash to good use then we should cut and run.

There was some discussion on this in the last 2-3 minutes of the webcast today. The CEO said NZOG had come close to acquiring an asset which would have used pretty much all of the cash on hand but they missed out. He didn't disclose what this asset was.

He went on to say that another prospect has been screened/evaluated by the company and they are about to do more extensive due diligence. I think he said this prospect is of similar size to the one they missed out on.

Thus the company is looking to spend the cash. You therefore need to decide if you want to stay in for the ride or take any profits you have now. They have done well with their investment in PPP. The CEO said it cost them around $NZ 30 million and today's market value is $NZ 53 milllion. If you think they can repeat this effort then stay in. I'm staying in until after the annual report announcement and dividend and will reconsider then.

[shasta]

I didnt think it was NZO's business to try play the FX market...most commentators even, John Key thought the NZD would have a 0.4 something against the USD.

With the kiwi being one of the most traded currencies in the world, and billions everyday traded...I'd say NZO is competing against some bigger fish than with more privy information and analysts than NZO could afford. An accountant...you implying you've been FX trading successfully shasta?!

I don't think you have to be a FX trader for a living to see where the chart was heading, so i don't see how that's relevant. No where in my post have i implied i'm an FX trader. :confused:

I do however have some experience with FX contracts in the commercial world.

The fact is that blind freddy could have seen it coming, & i even gave my opinion in advance of the likely loss.

If there Accountants didn't see this coming, or didn't act then they really need to brush up on what's going on in the world.

That's shareholders cash they are losing not there own, & to put it into perspective the FX loss is greater than the total revenue for the quarter.

I don't believe for a minute NZO needs $90m in $US, so how much more will NZO have in FX losses before this material item is addressed?

[Corporate]

I don't think you have to be a FX trader for a living to see where the chart was heading, so i don't see how that's relevant. No where in my post have i implied i'm an FX trader. :confused:

I do however have some experience with FX contracts in the commercial world.

The fact is that blind freddy could have seen it coming, & i even gave my opinion in advance of the likely loss.

If there Accountants didn't see this coming, or didn't act then they really need to brush up on what's going on in the world.

That's shareholders cash they are losing not there own, & to put it into perspective the FX loss is greater than the total revenue for the quarter.

I don't believe for a minute NZO needs $90m in $US, so how much more will NZO have in FX losses before this material item is addressed?


I agree Shasta. Very very poor on NZO's part! It's a massive loss.

[777]

And if the $ had moved the other way then we, and them, would be saying "arn't we doing well".

[MPC]

Well, I am happy to see a DRIP scheme. I brought this up a while ago as this suits my NZO investing for the long term.

Cheers,
MPC

[blockhead]

I'm with you MPC

[shasta]

And if the $ had moved the other way then we, and them, would be saying "arn't we doing well".

It was doing well, so why the complacency now?

I'm selling out of NZO - this is unbelievable, i'm stunned :eek:

[Xerof]

They could pay a professional Treasurer a couple of hundred a year to save/make them millions........ I'm currently available......:D:D

Unfortunately, Pike is the same.....when asked what their hedging policy was, Gordon's eyes glazed over and he announced they don't have one.

If they ever want to borrow from the banks in the future, they will be asked to put a hedging policy in place........now that they are a producer

[Corporate]

And if the $ had moved the other way then we, and them, would be saying "arn't we doing well".

What....a $22m lost is a disgrace! NZO is a half a billion dollar company and $22m vanishes in thin air.

[Xerof]

EVEN WORSE - The 22 m loss only covers FX movement from last reval date of 31 March until end of June. On an annual basis, they will be delighted to report an exchange gain of 16.4M........:cool:

[upside_umop]

You guys are ridiculous if you think you, Joe Averages, can outperform the currency markets.

Remember, for every person that is long, there is someone short. Someone wins, someone loses. Its a money go round.

Keep doing what your best at NZOG, finding and producing oil.

[Corporate]

You guys are ridiculous if you think you, Joe Averages, can outperform the currency markets.

Remember, for every person that is long, there is someone short. Someone wins, someone loses. Its a money go round.

Keep doing what your best at NZOG, finding and producing oil.

We aren't talking about Joe Average. We are talking about highly paid management and executives.

[upside_umop]

Want me to quote shasta, corporate?


The fact is that blind freddy could have seen it coming

Ok, blind freddy is a little worse off than Joe Average...but he can still predict currency movements, and you said you agreed with him on his statement!

Your telling me, that just because they're highly paid executives and management (who specialise in the oil industry), that they should be able to outperform highly paid currency traders (who funnily enough, specialise in the currency field)?

EDIT: I find it prudent of NZOG to have held USD throughout this volatile period of time, because they have actually got drilling commitments in USD. For them to play the currency market is outside their game. Fullstop.

[Corporate]

Want me to quote shasta, corporate?



Ok, blind freddy is a little worse off than Joe Average...but he can still predict currency movements, and you said you agreed with him on his statement!

Your telling me, that just because they're highly paid executives and management (who specialise in the oil industry), that they should be able to outperform highly paid currency traders (who funnily enough, specialise in the currency field)?

NO - but a company worth half a billion dollars. That at this point in time has (did have) $200m in the bank - has an obligation to maintain it. If that requires spending $200k + PA to protect it using a professiona; trader/company then that is what should be done.

This is not a silly game. $22m is HUGE.

[Corporate]

Want me to quote shasta, corporate?


Your telling me, that just because they're highly paid executives and management (who specialise in the oil industry), that they should be able to outperform highly paid currency traders (who funnily enough, specialise in the currency field)?



This is a LISTED oil and gas COMPANY. Not a backyard outfit. Given that NZO sell there products in USD and spend in USD - you'd think currency risk would be top of mind.

[upside_umop]

NO - but a company worth half a billion dollars. That at this point in time has (did have) $200m in the bank - has an obligation to maintain it. If that requires spending $200k + PA to protect it using a professiona; trader/company then that is what should be done.

This is not a silly game. $22m is HUGE.

Im not saying 22m is not HUGE.

What I'm saying is, currency trading is a hugely risky game with no better than 50/50 odds. Its actually less when you consider commissions and charges.

NZOG has no obligation to maintain $200 m in the bank. They have an obligation for creating long term sustainable shareholder wealth, which they would do by being prudent, reducing their risk profile, and keeping money in USD while they have it for hedging purposes.

To do what you and shasta is saying, is simply speculation. Currency traders are speculators.

Heres a little homework exercise: Define and compare both hedging and speculating.

[friedegg]

NO - but a company worth half a billion dollars. That at this point in time has (did have) $200m in the bank - has an obligation to maintain it. If that requires spending $200k + PA to protect it using a professiona; trader/company then that is what should be done.

This is not a silly game. $22m is HUGE.
yeah bloody thick idiots also went and pumped a fair few million into ppp so i hope theyre even stevens on this decision,or is it a loss as well?

[upside_umop]

This is a LISTED oil and gas COMPANY. Not a backyard outfit. Given that NZO sell there products in USD and spend in USD - you'd think currency risk would be top of mind.

Not really considering oil (their production) and USD (their revenue) are meant to be inversely correlated to a certain degree. If oil goes up, NZD/USD goes down = a slight amount of natural hedging. Its not perfectly negatively correlated, but is somewhat, I havent done the regressions.

[Corporate]

yeah bloody thick idiots also went and pumped a fair few million into ppp so i hope theyre even stevens on this decision,or is it a loss as well?

No great decision to get into PPP. Most people accept that. Success in one venture is not an excuse for failure in another.

[friedegg]

No great decision to get into PPP. Most people accept that. Success in one venture is not an excuse for failure in another.
well if nearly doubling your $ decision within 6 months isnt great,most people are greedy

[shasta]

Want me to quote shasta, corporate?



Ok, blind freddy is a little worse off than Joe Average...but he can still predict currency movements, and you said you agreed with him on his statement!

Your telling me, that just because they're highly paid executives and management (who specialise in the oil industry), that they should be able to outperform highly paid currency traders (who funnily enough, specialise in the currency field)?

EDIT: I find it prudent of NZOG to have held USD throughout this volatile period of time, because they have actually got drilling commitments in USD. For them to play the currency market is outside their game. Fullstop.

You really are a young upstart with alot to learn. :rolleyes:

Instead of passing off smart arse comments perhaps you could learn from people with far more experience than you on these topics.

NZO do not have to 'speculate in foreign currencies", i never said that, so get your facts straight.

I made a rough estimate (without having all the data NZO has) indicating if they did nothing they would lose $16m this quarter. They lost $22m!

That means with the $US strengthening the $US90m is devaluing in $NZ, when you get some commercial experience you'll learn a thing or two.

Does NZO actually need $US90m, well i'm not aware of any substantial committments that require that level of US currency.

All this crap about expert FX traders is just rubbish.

Most Financial Accountants in the commercial environment will have come across all facets of hedging, options, interest rate swaps, etc

Hedging is part of how businesses protect capital & if done right, benefit from the upside.

To lose more in FX losses, than you made in revenue for the quarter is insane.

They previously were in the money, & even with the drop off in the previous quarter they should have been aware.

Poor financial management at worse, or just plain lax.

You have a very short memory, there were all sorts of posters on the PPP thread calling for there Mgmt to realise the FX gains...

Plenty of people saw this coming :o

[digger]

Im not saying 22m is not HUGE.

What I'm saying is, currency trading is a hugely risky game with no better than 50/50 odds. Its actually less when you consider commissions and charges.

NZOG has no obligation to maintain $200 m in the bank. They have an obligation for creating long term sustainable shareholder wealth, which they would do by being prudent, reducing their risk profile, and keeping money in USD while they have it for hedging purposes.

To do what you and shasta is saying, is simply speculation. Currency traders are speculators.

Heres a little homework exercise: Define and compare both hedging and speculating.


The dairy company with a lot more time,effort and commitment,and playing the foreign money game ended up about square over the years,not counting the commissions paid. Some years they were gods and other time idiots that did not see what everyone else can now see in hindsite.When i last looked some years ago it was a zero sum game.Can anyone really say they knew for sure that the Kiwi would go up so much against the greenback. And if they did then get out of NZO and into currency exchange.
I for one say stay away from currency covers.There are just as many losses when things turn one way as gains when they shift the other.

[Snapper]

So Shasta, are you hanging around for the divvie or are you going to sell straight away?

[shasta]

So Shasta, are you hanging around for the divvie or are you going to sell straight away?

I'll be selling tomorrow, not worried about the dividend

I have better targets on watch ;)

[friedegg]

I'll be selling tomorrow, not worried about the dividend

I have better targets on watch ;)

so it will be another down day for nzo then?

[COLIN]

You guys are ridiculous if you think you, Joe Averages, can outperform the currency markets.

Remember, for every person that is long, there is someone short. Someone wins, someone loses. Its a money go round.

Keep doing what your best at NZOG, finding and producing oil.

Agree, UU.
Always remember, its a zero sum game. Look at Fonterra, our greatest generator of foreign exchange - do they always get it right?

Later: Digger, my apologies, I've only just noticed your post, which makes the same points I did.
I happen to know a bit about the Dairy Board's (Fonterra's predecessor, for those young 'uns around) FX management strategies over the years. Its also apposite to read what Henry van der Heyden says, in today's report, about where they expected the NZD/USD rate to be now.

[notie]

good move shasta. I just listened to the broadcast and there really wasn't much in there that was exciting. Gamma prospect, well pigs can fly and I very much doubt nzo will get anyone interested enough to come in on a drill with them.

What is very likely is that nzo are now looking to get back into two permits in NZ that they were in a couple of years ago and then lost as they didn't back themselves to drill wells. They will be paying money to buy these assets off another company that currently has them and is looking to sell off.

Seems to be the same old story with this company-trading off the sucessses of yesterday (Kupe and Tui) and really having nothing innovative or new to get involved with. All a bit sad really and there are better oilers out there to invest in

[notie]

Oh the currency loss isn't great either. Says a lot about their expertise

[Nitaa]

Oh the currency loss isn't great either. Says a lot about their expertise Notie and co who are blaming the company about the currency need to get a grip. Many will complain why they didnt hedge, didnt convert, hold US or not hold US currency etc. As far I am concerned, GET OVER IT.


Challenge to Notie and any other future teller who can predict this simple Forex market. Outlay $100 and I will pay you 50 - 1 (yes $5,000) if you simply guess or calculate a basic up or down of the currency market for the next 12 months. Yes thats right, guess whether the $NZ goes up or down against the $US for each of the next 12 consecutive months correctly and I will pay out $5,000. Get 1 month wrong and all you lose is a miserable $100. Even a 100 - 1 bet would be to my advantage If you want any clarification then simply ask.

Any takers? I thought not.

On a more serious note Notie, How many billions did Warent Buffett lose on the $US a few years ago. The point is, no can can resonably predict the future so expect there will be swings and roundabouts.

In light of what nzo have done this year compared to other stocks i think we have done bloody well.

discl. hold

[geezy]

well said nita, i think lots of ppl have lost money in the FX market , govts and huge companies have made losses. Although this is not an excuse for NZO to make this loss, i do think NZO has to come up with a plan to use that money when assests are looking very attractive at the moment :)

still well done to date NZO.

[Bixbite]

Notie and co who are blaming the company about the currency need to get a grip.


discl. hold

Nita,

Do we have a “co” poster here? Could you please clarify it?

Many thanks and regards,
Bixbite

[digger]

good move shasta. I just listened to the broadcast and there really wasn't much in there that was exciting. Gamma prospect, well pigs can fly and I very much doubt nzo will get anyone interested enough to come in on a drill with them.

What is very likely is that nzo are now looking to get back into two permits in NZ that they were in a couple of years ago and then lost as they didn't back themselves to drill wells. They will be paying money to buy these assets off another company that currently has them and is looking to sell off.

Seems to be the same old story with this company-trading off the sucessses of yesterday (Kupe and Tui) and really having nothing innovative or new to get involved with. All a bit sad really and there are better oilers out there to invest in


Notie if you believed a fraction of this post you would simply be out investing in these other companies and that would be the last of you going on about NZO. Far from just trading off the success of yesterday,it is just the best and most economic thing to do to drill around these discoveries to maximise the resource that is there.It gives the best return on equity with the shortest development time from any extra finds.NZO wants to completed all possible prospects before taking on some innovative wild cat as you suggest. Amen

[macduffy]

I don't hold NZO but find the discussion on this thread to be fascinating.

On the subject of foreign currency hedging/speculation, my only comment would be that NZO are in the business of prospecting for and producing oil. They are an NZ company. reporting in NZD, and should be holding only sufficient USD, AUD etc to cover their reasonably forecast needs in those currencies. Anything beyond that becomes currency speculation for which NZO doesn't have the expertise.

[Xerof]

Yep, nicely summarised Macduffy. Their approach to FX is 'head in the sand' stuff and shareholders are left at the mercy of the market. As I said up front, there are people out there who can manage risk - they are called Treasurers and it is risk management, not speculation, that these people specialise in.

[Snow Leopard]

In other news, the price of oil drops significantly overnight.

regards
Paper Tiger

[Bilo]

In other news, the price of oil drops significantly overnight.

regards
Paper Tiger

The oil price is normally much more important than the exchange rate, although oil is trading like a currency these days. My point is that if (as happened) the NZD/USD falls to ten year lows and you are making good money on your exports at this price then you should lock in your future income streams for as long as is possible. If you are holding heaps of USD then the probability is that NZD/USD is going to go up further than it will go down - so you reduce your holdings of USD at least to what you are likely to spend over the next period. BUT saying that you are doing nothing is head in the sand, not likely to succeed, share price destruction stuff. Take Pike River - locking in a NZD/USD for a significant proportion of their exports at ten year lows (50's) has to make a lot of sense when their profitability is very sound (at 90s).

In NZ exporting there is no escape from forex - that is why most fail. Particularly when dealing in USD denominated commodities. It is a number one risk. Wake up NZO and PRC - any directors coming up for re-election and party to this sort of nonsense will be short of my votes.

[Casa del Energia]

Hoki item on NZX.

http://www.nzx.com/news/markets/2703059/Hoki-oil-prospect-could-equal-Tui

But I remember Hector. So I'm not getting too excited here.

[digger]

Shell Cuts Capital Spending, Jobs as Profit Falls 67% (Update2)
Share | Email | Print | A A A

By Fred Pals

July 30 (Bloomberg) -- Royal Dutch Shell Plc, Europe’s largest oil company, plans to reduce capital expenditure by about 10 percent next year and make further “substantial” job cuts, saying the economy won’t recover any time soon.

Capital spending will drop to about $28 billion in 2010 from as much as $32 billion this year, The Hague-based Shell said today in a statement as it reported a 67 drop in quarterly earnings. The company, which has cut senior management positions by 20 percent, said further staff reductions are “likely.”

The recession has forced
End Quote

Many of you will remember that recently we were talking about Shell selling out of NZ. This snitbit from Bloomberg probably say why. If so the assets for sale may be good buying it is just that Shell worldwide is having finanical problems.

[Nitaa]

Nita,

Do we have a “co” poster here? Could you please clarify it?

Many thanks and regards,
BixbiteHi Bixbite. I think you know what i mean. I think Shasta was one (havent looked back to check) and a few others who condemened NZO for the handling of their loot in diffierent currencies. Effectively they are hedging and are taking a reduced risk byt haing funds in both currencies. The reality is there will be swings and round a bouts. Dont forget that new ventures, exploration costs etc will be in US currency. Therefore it stands to reason to keep some funds in US to cover these expenses rather than giving the banks free commision or fees by changing the currency back and forth.

I cant think off the top of my head but i vaguely remember nzo making about approx $20m about 12 months ago simply due to the change in currency. So doesnbt this even it out somewhat? Point is if i was in nzo's position with the funds in different currencies i would probably do pretty much the same as far as the funds are concerned. One can argue that nzo missed the boat about using their money into new ventures etc. What one needs to consider is that the world economy is changing that fast at present the window of opportunity may only present itself in a very short time frame. I feel a lot more at ease that the Company are not just rushing into things for the sake of it.

[Bixbite]

Notie and co who are blaming the company about the currency need to get a grip.





Did your so-called “co” post any post to blame the company about the currency need to get a grip?

[notie]

One can argue that nzo missed the boat about using their money into new ventures etc. What one needs to consider is that the world economy is changing that fast at present the window of opportunity may only present itself in a very short time frame. I feel a lot more at ease that the Company are not just rushing into things for the sake of it.

Missed the boat? Have they even got on it at this stage. So the oil price drops from 140 to 35 bucks last year and here was nzo sitting there with a big pile of money and they couldn't find any deals in these conditions.

"We continue to screen opportunities", and they will continue doing this and talking their efforts up.

OK, they farmed in on a couple of permits in NZ (Barque and Hoki) but a 10% holding in Hoki isn't going to make this company if that well is successful and the chances of that are pretty low (10-15%).

Maybe they should do as one other poster said and buy the shell gas stations in NZ. Who knows, they could grow their war chesst selling gas, chocolate and ciggies

[J R Ewing]

Maybe they should do as one other poster said and buy the shell gas stations in NZ. Who knows, they could grow their war chesst selling gas, chocolate and ciggies

i'm sure only a non-shareholder would suggest such a move...

[Dr_Who]

They should offer to T/O the entire PRC by offering a 1 for 1 share scrip bid. Take advantage of PRC while the sp is low. PRC is close to home and they know the company very well. Wont need any cash as it will be a share scrip bid. Cost can be reduced by merging management team with NZO.

Just have to look over to Aussie at MCC, WHC and FLX to see that PRC is a very cheap and undervalued company.

It just makes good sense.

[Snow Leopard]

In other news, the price of oil drops significantly overnight.

regards
Paper Tiger
and one day later....

In other news, the price of oil rises significantly overnight.

regards
Paper Tiger :)

[Xerof]

They floated PRC off to assist with their own liquidity requirements at the time, i.e. well before they became a producer (just as they did with PPP).

I take your point, that perhaps short term it could be a good home for their cash, now that it is largely de-risked and the prospects look excellent, but they are really looking to be explorer/producer of O&G. They will be happy (and so will I) for someone to pick up their 30% holding at some point down the track, but in the meantime, they are better off looking for other 'core assets', IMO

[dsurf]

Talking about missed opportunities and companies they know well. I am very disappointed that that a full takeover offer partially with scrip was not undertaken by NZO for PPP last year and think that there remains a disconnect between the Large-shareholding-executives and shareholders.

If PPP was undervalued - (was trading at below cash backing last Nov?) and was good enough to go for 15% - ask why it was not good enough to go for 100%.

I assume that the company was so undervalued at that time that Large-shareholding-executives in PPP who also have strong direct connections with NZO (including being an NZO Large-shareholding-executives previously) did not want to give up there large stake in PPP for "less than they thought it was worth" so instead a "blocking stake" was purchased.

Hmmmmm

[the machine]

Talking about missed opportunities and companies they know well. I am very disappointed that that a full takeover offer partially with scrip was not undertaken by NZO for PPP last year and think that there remains a disconnect between the Large-shareholding-executives and shareholders.

If PPP was undervalued - (was trading at below cash backing last Nov?) and was good enough to go for 15% - ask why it was not good enough to go for 100%.

I assume that the company was so undervalued at that time that Large-shareholding-executives in PPP who also have strong direct connections with NZO (including being an NZO Large-shareholding-executives previously) did not want to give up there large stake in PPP for "less than they thought it was worth" so instead a "blocking stake" was purchased.

Hmmmmm

when nzo bought 15% of ppp in dec it was like buying cash for a discount and TR was out of the decision making loop.

ppp is no longer a bargain for nzo and one doubts if they will make a play for any more script - although spending the $3m ppp dividend by buying more script would put a rocket under ppp sp [and increase nzo value of ppp by a lot more than the $3m spent]

ie spend $3m and investment increases by say $8m

M

[the machine]

awe quarterly just out - nice picture of kan tan iv arriving in victoria

location of 2nd tui drill dependent on results of first tui drill


M

[shasta]

and one day later....

In other news, the price of oil rises significantly overnight.

regards
Paper Tiger :)

The Tapis price didnt drop off like the rest did (when WTI was @ $63, Tapis was still $72)

Tapis up a modest $0.64 overnight - to $73.11 (+ 0.88%)

The only oil price NZO needs to worry about is the Tapis price

[Xerof]

The only oil price NZO needs to worry about is the Tapis price

And as we know, along with the FX rate, they don't even worry about this either

[Lion]

Tapis up a modest $0.64 overnight - to $73.11 (+ 0.88%)



Things still moving fast, Tapis up $3.38 to $75.77 in their first hour or 2 of trading.

Adding my opinion to this FX squabble - I think NZO is not in the business of currency trading and even the real experts can get it horribly wrong. Having a few $USm is hedging, as someone said, and apart from that, you've just got to take what comes. Lose some, win some. Relax, things are looking good, eh Notie?

[Mr Tommy]

I must say I was surprised how exposed to the foreign exchange NZOG was. Every week they update the Tui output page, currently the sole source of income, and they show the NZD equivalent. So why do they bother if all the money had been kept in USD.

[Casa del Energia]

I must say I was surprised how exposed to the foreign exchange NZOG was. Every week they update the Tui output page, currently the sole source of income, and they show the NZD equivalent. So why do they bother if all the money had been kept in USD.

I think I agree with your surprise, Mr T. All those who say 'they' are not FX speculators -- are missing the point. Hedging is just a risk management method same as accident insurance is for your great aunts Morris Minor. . . pretty ordinary and normal stuff.

[Nitaa]

I think I agree with your surprise, Mr T. All those who say 'they' are not FX speculators -- are missing the point. Hedging is just a risk management method same as accident insurance is for your great aunts Morris Minor. . . pretty ordinary and normal stuff.I agree and disagree. I agree in the sense that hedging is a form of risk manamgement. No problem there. Dont forget, by nzo holding both currencies they are hedging their bets anyway are they not? Whilst the $NZ climbs against the Greenback nzo are deminishing the value that that is currently held in $NZ currency and are gaining what they currently hold in US currency. Don't forget that when NZO need $US for other investments they will be in a stronger position and get more bang for their buck if it was held in $NZ. I am not sure how this gain would be shown on their accounting though.

[the machine]

awe quarterly just out - nice picture of kan tan iv arriving in victoria

location of 2nd tui drill dependent on results of first tui drill


M


awe also announced kan tan iv has had some crane damage in geelong, so delayed by 1 month. not sure if already factored into nz drilling program

M

[Casa del Energia]

I agree and disagree. I agree in the sense that hedging is a form of risk manamgement. No problem there. Dont forget, by nzo holding both currencies they are hedging their bets anyway are they not? Whilst the $NZ climbs against the Greenback nzo are deminishing the value that that is currently held in $NZ currency and are gaining what they currently hold in US currency. Don't forget that when NZO need $US for other investments they will be in a stronger position and get more bang for their buck if it was held in $NZ. I am not sure how this gain would be shown on their accounting though.

Yes - you are right - it is counter balancing. I had forgotten about the NZD cash - and thus was partly talking through a hole in my head (yet again).

And now - on a more 'global' subject - peak oil is creeping back into the headlines - viz this herald article about fields runnig dry..

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10588388

.. food for thought when considering whether or not to take up the share re-investment offer.

[boysy]

Origin’s Bass drilling delayed by damage to Kan Tan IV


Monday, 3 August 2009

ORIGIN Energy’s upcoming drilling campaign in the Bass Basin has been pushed back to September after the contracted semi-submersible Kan Tan IV drilling rig was damaged.



Minority partner Innamincka Petroleum said the rig sustained damages to the aft crane and crane boom while preparing for the two-well drilling campaign in Port Geelong.

The drilling campaign was expected to start at the end of the July.

According to Innamincka, the rig will remain on zero rate while repairs are carried out.

The two-well campaign includes the drilling of the Trefoil-2 appraisal well and the Rockhopper-1 exploration well in T/18P.

Trefoil has estimated resources of about 220 petajoules of gas and 14.5 million barrels of liquids while Rockhopper has about 200PJ of gas and 13MMbbl of liquids.

Following the drilling in the Bass Basin, Kan Tan IV will move to New Zealand, where it will drill at least two wells for two joint ventures operated by Australian Worldwide Exploration before drilling two Northland wildcats for Origin.

Origin Energy holds a 39% interest in T/18P and is operator. AWE has 47.5% while Innamincka holds the remaining 5%.