NZ Oil & Gas (NZO)

[bermuda]

Hi Unicorn,
Would you be able to do an NPV for all of NZO please

I think you should assume revenue of about $120 million per annum right through.

Thanks

[Unicorn]

Balance,

I am quite comfortable with 10% discount. At this stage close to half of the first years projected production has been achieved - there is no risk on that component. The production profile, and what has been achieved to date, shows a heavy front end production weighting so risk correspondingly reduces quite early. I seriously doubt that professional institutions will be discounting cash.

[Unicorn]

Hi Unicorn,
Would you be able to do an NPV for all of NZO please

I think you should assume revenue of about $120 million per annum right through.

Thanks

I would rather not attach my name to a npv calculation for NZO, as I feel it would be too unreliable. In particular I do not know enough about Kupe to come up with what I consider to be reliable figures for that project (and it is the major component of NZO's future). In simple terms Kupe is about 3x the size of Tui, but a couple of years behind. This year NZO should report an excellent result due to Tui income, but next year that should be expected to fall away as Tui production reduces markedly, before picking up again the following year as Kupe comes on stream.

Progress with Kupe to date has been okay, but not nearly as good as Tui. Kupe certainly warrants a higher discount rate than Tui, at this point in time, as costs and income streams are less well defined.

Npv calculations against $120M p.a. are

Years @10% @15%
5 $454M $402M
10 $737M $602M

[trackers]

Of course you hold NZO because you must believe that there's a big future for them. But is NZO really substantially undervalued?

If it is, why are the institutions not buying? Instaed it looks like they are happily selling out the placement stock they took at 90 cents (plus an option) to the punters lining up and buying off them? Nice quick profit for them, huh?

I have seen a valuation done on NZO and it goes along the lines of :

Tui $131m
PRC 60m
Kupe 45m (more funding required yet - like PRC)
Total 236m

There's 256m shares on issue so NZV = 92 cents per share. The cash that NZO is sitting on will be used up.

Haha that's a good one balance...but I missed the punch line?

[bermuda]

I would rather not attach my name to a npv calculation for NZO, as I feel it would be too unreliable. In particular I do not know enough about Kupe to come up with what I consider to be reliable figures for that project (and it is the major component of NZO's future). In simple terms Kupe is about 3x the size of Tui, but a couple of years behind. This year NZO should report an excellent result due to Tui income, but next year that should be expected to fall away as Tui production reduces markedly, before picking up again the following year as Kupe comes on stream.

Progress with Kupe to date has been okay, but not nearly as good as Tui. Kupe certainly warrants a higher discount rate than Tui, at this point in time, as costs and income streams are less well defined.

Npv calculations against $120M p.a. are

Years @10% @15%
5 $454M $402M
10 $737M $602M

Thanks.Those figures look a lot better.

[upside_umop]

Bermuda, remember that is only the discounting of revenue. Not NPAT or cashflow which ultimately determines the underlying value of a stock.

[bermuda]

Bermuda, remember that is only the discounting of revenue. Not NPAT or cashflow which ultimately determines the underlying value of a stock.

Upside,
No worries mate. Just some rough figures eh.

I wish Waaihoek would do an updated valuation.He put alot of work into it but I think the knockers put paid to further updates.Pity really they were very good.

Let's see what AWE say about Tui on Thursday

[Nitaa]

A big chunk of the valuation must go in to the current earnings and projected earnings less expenses of course.

For some there is still too much uncertainty with PRC and Kupe. That where it is discounted. Also with the prospects of the company going to the market for more money has to be a factor in the supressed sp at the mo.

Make no mistake Tui is a better than even chance for further upgrade especially if oil stays consisently avove $70. worth noting that both Rio and BHP expect commodity prices to keep increasing over the next 5 years. Capex and operating expenses will go up but so will the oil, gas and coal if you are to believe what the big boys say

[digger]

This year NZO should report an excellent result due to Tui income, but next year that should be expected to fall away as Tui production reduces markedly, before picking up again the following year as Kupe comes on stream.
End Quote from Unicorn

Unicorn your comments are always something to look forward to. I would say all considerable them valuable. Your comment above is the official line and what the market accepts, it is also the most likely to turn out to be wrong. Tui is more than likely to supply a revenue long enough that no dip will occur before Kupe kicks in. Am lookinh forward to AWE's AGM on thur 22 as it may highlight where Tui production is likely to stand.

[digger]

Ok i should have included the figures.
Say we leave it at 40,000 daily. We will get more if we pump it more slowly,AND IT WILL BE WORTH MORE.
40,000 [365]=14,600,000
That brings us to 31 july 08
The field could easily and eventually likely yield 40 million so another year at 14,600,000 will give only 29 million. The balance will get spread over the next 5 years at a lowe rate. Seems reasonable to me and is my best guess as to what will happen.
I am not planning to sell,so whoever the sellers bermuda refered to it is not me.

I se on enegrybulletin.nett that some private conversation by saudies was broadcast live by mistaKE AND AS THAT INFO GOES AROUND THE MARKETS IT IS EXPECTED THAT TOMMOROW THE OIL WILL BREAK 101 DOLLARS.

[bermuda]

Ok i should have included the figures.
Say we leave it at 40,000 daily. We will get more if we pump it more slowly,AND IT WILL BE WORTH MORE.
40,000 [365]=14,600,000
That brings us to 31 july 08
The field could easily and eventually likely yield 40 million so another year at 14,600,000 will give only 29 million. The balance will get spread over the next 5 years at a lowe rate. Seems reasonable to me and is my best guess as to what will happen.
I am not planning to sell,so whoever the sellers bermuda refered to it is not me.

I se on enegrybulletin.nett that some private conversation by saudies was broadcast live by mistaKE AND AS THAT INFO GOES AROUND THE MARKETS IT IS EXPECTED THAT TOMMOROW THE OIL WILL BREAK 101 DOLLARS.

Digger,
What the Saudi's are trying to do is protect the $US. Bush insisted that Saudi Arabia trade oil in US dollars in return for arms/protection.

THe $US is in serious trouble for a whole host of reasons that I wont go into here but suffice to say the USA is completely stuffed if oil is not tied to dollars. That is why Saddam got nailed.He started to trade in Euros. Iran is now working on an oil bourse in Euros as is Venezuela.The USA is building the rhetoric to nail Iran but last week the IAE supported Iran's nuclear program so much that Iran now wants a US apology.

It is getting very messy and now Putin is increasingly flexing Russia's muscles and working to set a bourse to trade oil in Roubles. Bush is in a hole and cant get out.

Putin has just been to Iran and now Chavez of Venezuela has said that oil will go to $US150 if Bush takes on Iran. Man, what an understatement. More like $350.

Bush wont get International support to go into Iran.

The USA is stuffed and are heading for a depression.Let's hope the growth of China and India can keep the world afloat.

[Nitaa]

Unless theres a recession overnight i can see only one thing happening. Oil going up and Iran being attacked. Is that 2 things?

Its also worth noting that Chavez predicts oil to go to $200 if the US attacks Iran

[Unicorn]

Interesting reading about the Tui project here (it is a 5Mb PDF file) ... http://wa.spe.org/images/wa/articles/67/spe107_web_final.pdf

[bermuda]

Thanks Unicorn,
A very good read. Cant wait for Thursday when AWE report.

I read the article while watching Lady Chatterley's Lover case on TV1.

Very good,thanks again.

Wouldnt be surprised if the JV put another 'prick' into Tui next summer.

[Crypto Crude]

Thanks for the link Unicorn......
...
Bermuda,
I thought you would have been watching Ali G in the House on C4...
:D
.^sc

[the machine]

Interesting reading about the Tui project here (it is a 5Mb PDF file) ... http://wa.spe.org/images/wa/articles/67/spe107_web_final.pdf

unicorn, thanks for the link

the other article on the marine complex is near where we launch our 5m runabout - bought with proceeds of selling some nzo quite a while ago.

in the background is garden island - a really nice place to visit during daylight - the navy has the other end of the island and us general public are not allowed to saty overnight.

hopefully a big oil discovery by nzo will enable me to upsize my boat in a year or so


as regards tui , it must be very close to payback development costs and the awe read this thursday shouldbegood.

M

[Nitaa]

NZO now sub $1.00

IMO this is very much becoming a no brainer. 6 months gain on this stock looks strong especially with Kupe. PRC is still the main issue for me. All said we can expect further capex required for PRC and Kupe

[duncan macgregor]

NZO now sub $1.00

IMO this is very much becoming a no brainer. 6 months gain on this stock looks strong especially with Kupe. PRC is still the main issue for me. All said we can expect further capex required for PRC and Kupe Even i find it hard to understand why the sp would be at this level at this stage in the play. The company attitude to the shareholders is one thing, but surely not enough to drop the sp to this low. When the blue eyed brigade start preaching about peak oil, or how much money coming into the coffers they should remember it counts for nothing, its market sentiment that counts. This is where TA has it all over fundamental analysis. The study of the market counts for more than the study of a company fundamentals.
The market is telling the company it dousnt care about peak oil or how much money NZO is making in the short term. The market is telling the company it does not like its attitude to investors nothing more nothing less. Pass the parcel wont be much fun before to long its taking a bigger hit. Macdunk

[fish]

I fail to follow your logic Duncan-when a share price is so depressed below its fundamental value plus a company that has such a valuable resource which has the potential to increase so much in value is just the time I like to buy(so bought more today ) .
Market sentiment can change so rapidly that you have to be in to win .
I have found it pays to listen very carefully to the sages-such as Unicorn .
Short -term one is always subject to the fickles of the market but next year the company will be working hard to get the options exercised .

[Unicorn]

Even i find it hard to understand why the sp would be at this level at this stage in the play. The company attitude to the shareholders is one thing, but surely not enough to drop the sp to this low.

I can understand the share price being at this level, and still falling. The AGM was incredibly badly managed, so a number of additional investors will have been encouraged to exit - and nothing has been done to attract new investors. Share turnover has been low, because there has been nobody to sell to, and momentum is firmly set towards the downside now. I would not be surprised to see the price slide further until someone in Head Office wakes up and does something useful or until it is ridiculously oversold.

The AGM was not only a lost opportunity, but also a poor reflection on the abilities of the new CEO. We now know he has failed to effectively manage an AGM, and we know that he has not delivered anything to shareholders from the record oil prices and the higher than forecast Tui production. It means that the hopes for a new, vibrant, shareholder centric focus for the company are fading away.

More than ever, the value is there. But more than ever, management are making a hash of it.

[bermuda]

Even i find it hard to understand why the sp would be at this level at this stage in the play. The company attitude to the shareholders is one thing, but surely not enough to drop the sp to this low. When the blue eyed brigade start preaching about peak oil, or how much money coming into the coffers they should remember it counts for nothing, its market sentiment that counts. This is where TA has it all over fundamental analysis. The study of the market counts for more than the study of a company fundamentals.
The market is telling the company it dousnt care about peak oil or how much money NZO is making in the short term. The market is telling the company it does not like its attitude to investors nothing more nothing less. Pass the parcel wont be much fun before to long its taking a bigger hit. Macdunk

I agree with you totally. (well...to be honest your comment about Pass the Parcel has got a bit repetitive ). Nevertheless a Good post. Sentiment has to change. I have asked the company to put a financial plan in the next quarterly.

It would be a 10 year plan which would contain basic profit and loss material and show clearly the expected net profit.The message would be emphasized as " an expectation subject to market conditions."

This sort of detail is what the market want and NZO should front up and provide it. A lot of other companies do. Be accountable. If say.. an aquisition or something else comes along then just go to the market with a new Plan..... It ain't hard.

As you know this stock is severely undervalued. I really hope they give consideration to this proposal that I put to them this morning. I think you and I would agree that this would be a shot in the arm for the share price...and I think you would really feel part of the company.

What do you think? Appreciate your reply

[Paddie]

I can understand the share price being at this level, and still falling. The AGM was incredibly badly managed, so a number of additional investors will have been encouraged to exit - and nothing has been done to attract new investors. Share turnover has been low, because there has been nobody to sell to, and momentum is firmly set towards the downside now. I would not be surprised to see the price slide further until someone in Head Office wakes up and does something useful or until it is ridiculously oversold.

The AGM was not only a lost opportunity, but also a poor reflection on the abilities of the new CEO. We now know he has failed to effectively manage an AGM, and we know that he has not delivered anything to shareholders from the record oil prices and the higher than forecast Tui production. It means that the hopes for a new, vibrant, shareholder centric focus for the company are fading away.

More than ever, the value is there. But more than ever, management are making a hash of it.


All I have heard, (and particularlyfrom Bermuda and mob), and I don't like to mention names is how brilliant the new CEO is. We got told how Helen would improve investor relationship and what is happened, diddly squat,. The only people making dollars out of this company are the people running it.

Paddie

[JBmurc]

well can't believe the current SP what did the shareholders that are currently selling thinking? high Tapis oil prices just not good enough -100+ million gross revenue 07/08
2 more major projects to come -from my understanding TUI will with upgrades be profitable for many 8yrs+ esp. the first 3yrs

-JBmurc now holding 74,000 NZO

[Mingeathinaikos]

well can't believe the current SP what did the shareholders that are currently selling thinking? high Tapis oil prices just not good enough -150+ million gross revenue 07/08
2 more major projects to come -from my understanding TUI will with upgrades be profitable for many 8yrs+ esp. the first 3yrs

-JBmurc now holding 74,000 NZO

Agree, I too topped up today.

From a selfish point of view, I can't decide whether I want the options converted or not, when I'm holding only heads....can someone please help me decide with sensible input.

[JBmurc]

Well IMHO the opts being converted is got to be good for the company if they have developments & JV's needing the extra funds but if not converted NZO holders will have less delution still 200million in fresh capitial maybe PPP & NZO could do a drill in NZ or join with an ASX jnr in a JV and drill a decent well 50mmbl+ etc( STX has some great permits for one)

[digger]

Agree, I too topped up today.

From a selfish point of view, I can't decide whether I want the options converted or not, when I'm holding only heads....can someone please help me decide with sensible input.

Hey if you are really selfish as you say you are ,you sure would want the options exercised. It would mean your one dollars investment made today will be worth about at least $1-60 by end of june 08. I would say you can not really be that selfish if that has not struck you hard already.

[duncan macgregor]

Hey if you are really selfish as you say you are ,you sure would want the options exercised. It would mean your one dollars investment made today will be worth about at least $1-60 by end of june 08. I would say you can not really be that selfish if that has not struck you hard already. The share price at the end of june has to be worth above $1-50 for the options to be worth anything. Lets presume the sp reaches $1-55 which was my origonal estimate making the options worth 5c less time lost in the market waiting. People can then use the option to buy a share at $1-50 saving 5c on the sp. The result is more money for the company, but one more share in the mix.
The result of that would be that the sp would tend to drop back to $1-50. I really dont think the company is to concerned about the options being excercized judging by their in action to court investors good will. I think they now have enough money coming in to swill at the trough for a few more years without worrying about a trifle like that. Macdunk

[bermuda]

All I have heard, (and particularlyfrom Bermuda and mob), and I don't like to mention names is how brilliant the new CEO is. We got told how Helen would improve investor relationship and what is happened, diddly squat,. The only people making dollars out of this company are the people running it.

Paddie

Well Paddie what about giving me your opinion of the question I put to Macdunk.
Cheers

[zorba]

I can understand the share price being at this level, and still falling. The AGM was incredibly badly managed, so a number of additional investors will have been encouraged to exit - and nothing has been done to attract new investors. Share turnover has been low, because there has been nobody to sell to, and momentum is firmly set towards the downside now. I would not be surprised to see the price slide further until someone in Head Office wakes up and does something useful or until it is ridiculously oversold.

The AGM was not only a lost opportunity, but also a poor reflection on the abilities of the new CEO. We now know he has failed to effectively manage an AGM, and we know that he has not delivered anything to shareholders from the record oil prices and the higher than forecast Tui production. It means that the hopes for a new, vibrant, shareholder centric focus for the company are fading away.

More than ever, the value is there. But more than ever, management are making a hash of it.


Unicorn,

Remember that the Chairman controlls and "manages" the AGM .......

In what sense was the AGM a poor reflection of the CEO abilities ?

What sort of rabbit were you hoping he would pull out of the hat ?

My reading of the NZOG shareprice is that its discounted primarily because both Pike and Kupe still have quite a distance to go, and because of the inate constrictions that Kiwi investors bring to the NZX, particularly w.r.t. a resource company, just not comftable with the risks still attendant, and then also following the sub-prime fiasco, risk discounts have been increased world wide.

[bermuda]

Zorba,
What do you think of my proposal.?

Wouldnt an abbreviated NPV spread sheet do wonders for the shareprice.? Plenty of room to keep things confidential but with a 'firmish ' net profit.

Cheers. Good to hear from you again.

[shasta]

Unicorn,

Remember that the Chairman controlls and "manages" the AGM .......

In what sense was the AGM a poor reflection of the CEO abilities ?

What sort of rabbit were you hoping he would pull out of the hat ?

My reading of the NZOG shareprice is that its discounted primarily because both Pike and Kupe still have quite a distance to go, and because of the inate constrictions that Kiwi investors bring to the NZX, particularly w.r.t. a resource company, just not comftable with the risks still attendant, and then also following the sub-prime fiasco, risk discounts have been increased world wide.

I think people are simply forgetting the $NZ5m per week Tui is bringing in!

We need more broker coverage, & given institutional investors are meant to hold approx 17%* of NZO, why arent we doing more presentations?

* - source NZO website

[Nitaa]

some very good posts fellas. Interesting post from Unicorn with regards to the AGM. It is the first real time that anyone his given their opinion on the agm. As Unicorn points out, it is a fantastic opportunity for the company to show case tui and the upcoming projects, talk about where the company is going (with clear direction) etc.

I for one was very enthusiastic with the new boss coming on board. Unfortunately enthusiasm alone doesnt make the company money. The biggest opportunity was lost for investors to see a white knight from DS as a first impression is a lasting impression. Moving on...my confidence in this company, more specifically the management has twindled somewhat. even if the sp sinks to mid 80's or whatever, that is about as far south i can see it going but the upside is extremely large. A very good risk v reward scenario at the mo.

[zorba]

Nita,

Did you attend the AGM ?

[Nitaa]

No I didnt attend, however i have asked on feedback in the past. Any of the responses was pretty much ho hum and the impression i got was the company lacked direction on how it planned to achieve their target forecast.

Do you have a different view on the agm?

[zorba]

Nita,

I thought it got a pass mark, not a scintillating ra-ra-ra occasion, but a report on solid progress .... sure it didnt set the crowd on fire, but it came across as an honest attempt at communicating with shareholders.

TR was OK if a bit staid as he always is, DS was suitably lively, but thank god he is not a Rob Jones type drama boy ...... Question time was long enough, and people generally got reasonable replies ..... there was only one challenging shareholder that questioned TR's remuneration package ..... Ray Meyer (chairs the remuneration sub committee of the Board, TR not on this sub committee) answered I thought ok, but maybe overall on the subject of payments etc the Board and TR got off a bit lightly.

All AGM's are seem to involve upping the director's fees and this was no exception. Sure it gives a snouts in trough impression, and extra upping TR's perks didnt help either, but then on a comparative Australasian basis the director's and TR's rewards, after getting the company to its present position, were probably not excessive.

Its a pity that the three exploration holes didnt hit the big time, sure if they had then the board and management would be smelling of roses .....

But they didn't and thats the nature of the drilling game, the odds are not that good, but when you do get a hit then your into billions with even a modest strike such as the Tui discovery .....

Also note that they did hit oil columns in both Tieke and Tauranui, they just werent commercial, see AWE's last Quarterly Report. So you got to give the geological exploration effort some positive credit.

And good exploration geology is pretty important for an oil company !!
.

[Nitaa]

hanks for the feebback Zorba

[Mingeathinaikos]

Hey if you are really selfish as you say you are ,you sure would want the options exercised. It would mean your one dollars investment made today will be worth about at least $1-60 by end of june 08. I would say you can not really be that selfish if that has not struck you hard already.

Digger, you miss the point i think....
I agree that if the options are exercised, this will obviously mean a 60% return on my investment today, BUT would a 49% return and no dilution be better for me ie. shareprice at $1.49 June 08, and hence no options exercised.
I'm thinking no conversion would be better for all of us head holders, as I don't expect cash flow to be as tight as the last time options were floating around.

[arjay]

Nita,


All AGM's are seem to involve upping the director's fees and this was no exception. Sure it gives a snouts in trough impression, and extra upping TR's perks didnt help either, but then on a comparative Australasian basis the director's and TR's rewards, after getting the company to its present position, were probably not excessive.


.

This is a bit like saying that the slaughter at Treblenka was OK because compared to other Nazi concentration camps it was not excessive. No snouts should not be in the troff until the bills are paid. Then shareholders/directors can get some cash.

[dsurf]

There is risk around PRC & KUPE - but what I am struggling with is that PRC was 80c oddd & generating -ve sentiment for NZO - It is now above listing & attracting buying support on good volumes - Why is there no +ve sentiment? I think it has a lot to do with the negativity of NZers which is probaly at an all time time given the rugby, league, cricket, netball debacles. McDunk is right - fundamentals have F all to do with the current SP

[ritchie]

crikey the options would have to be a good play at the price...any comments

[Hoop]

NZO at 97c ..what a stupid price!!

I thought DPC at $1.60 was a stupid price and now they are at 90c...
So deducing that I know nothing about Mr Market's mentality my hands will stay firmly in my pockets....tempting ,,tempting...no!!!!!

[Hoop]

NZO at 97c ..what a stupid price!!

I thought DPC at $1.60 was a stupid price and now they are at 90c...
So deducing that I know nothing about Mr Market's mentality my hands will stay firmly in my pockets....tempting ,,tempting...no!!!!!

Tempting but convincing myself not to accumulate
TA....has fallen out of its trading range 100-109 ..downwards!! bad sign
World markets look dodgy..nearly wrote doggy..same thing. bad sign
but...
Oil price creeping back towards their highs good sign
PRC shares going up ...still....good sign

2 bad + 2 good equals ...a dilemma

No, won't buy...I will probably end up hating myself in the morning!!

[trackers]

Any lower and I'm topping up on heads.. Same with RAK

[Mick100]

bought some more today

expecting crude to blast through $100 within the next couple of weeks
- that should "wake up" a few people.
.

[bermuda]

NZO at 97c ..what a stupid price!!

I thought DPC at $1.60 was a stupid price and now they are at 90c...
So deducing that I know nothing about Mr Market's mentality my hands will stay firmly in my pockets....tempting ,,tempting...no!!!!!

Hoop, with respect, DPC was always going to fall in this 'subprime' market. I mean their sales have fallen through the roof .

NZO is doing just fine. Coining it every day from Tui, Kupe on track and Pike about to enjoy record coking coal prices next year.

[COLIN]

crikey the options would have to be a good play at the price...any comments

Why would you think that? I bailed out of the options some time ago as I could see declining likelihood that the heads would be over $1.50 by exercise date which is fast looming. One can only conclude that the company has decided it will have no need of additional capital, relying instead on oil revenue to finance future development expenditure, otherwise they would be doing everything in their power to get the sp up. But if that is in fact the case, why would any directors or management be holding these options (Radford held over 3 million at 10 August last)?! Beats me!!!

[Paddie]

Well Paddie what about giving me your opinion of the question I put to Macdunk.
Cheers

Hi Bermuda,

Nothing personal, I know that you are a big fan of NZO.

It is obvious from the share price that NZO aren't doing a good job of marketing themselves.
With revenues that they are experiencing through TUI, one would expect the share price to be rallying, not in decline, and it appears almost like that they have two fingers in the air waved at shareholders. I am in favour of anything that you or anyone else can do to reverse the above. I am absolutely staggered that NZO have not tried to arrest the downtrend.

Paddie

[Paddie]

Why would you think that? I bailed out of the options some time ago as I could see declining likelihood that the heads would be over $1.50 by exercise date which is fast looming. One can only conclude that the company has decided it will have no need of additional capital, relying instead on oil revenue to finance future development expenditure, otherwise they would be doing everything in their power to get the sp up. But if that is in fact the case, why would any directors or management be holding these options (Radford held over 3 million at 10 August last)?! Beats me!!!

Colin,

But if TR was given them, and hasn't paid one cent for them, then there is no cost to him if they don't get exercised.

Paddie

[777]

I am sure that there would be restrictions on him selling , as he is management .

[Dr_Who]

Hi Bermuda,

Nothing personal, I know that you are a big fan of NZO.

It is obvious from the share price that NZO aren't doing a good job of marketing themselves.
With revenues that they are experiencing through TUI, one would expect the share price to be rallying, not in decline, and it appears almost like that they have two fingers in the air waved at shareholders. I am in favour of anything that you or anyone else can do to reverse the above. I am absolutely staggered that NZO have not tried to arrest the downtrend.

Paddie

After having a chat with a number of brokers it is obvious they think the chairman needs to step down for NZO to gain their support. Without the support of the brokers and institutions NZO sp will continue to struggle. NZO is abit like RPL, where the investors and broking circles have given up on top level management. Time for these jokers to step down. Dont shoot the messenger please, I am only delivering what I heard through the grapevine.

disc: NZO shareholder

[Mick100]

Without the support of the brokers and institutions NZO sp will continue to struggle.

Who needs the support of brokers when your producing 5000 bpd @ over $100 per bbl. - you can't argue with production - it's as good as money in the bank - I think the brokers and instos will wake up when oil is in excess of USD 100 per bbl - not long to wait for that to happen. ;)
.

[Unicorn]

Unicorn,

Remember that the Chairman controlls and "manages" the AGM .......

In what sense was the AGM a poor reflection of the CEO abilities ?

What sort of rabbit were you hoping he would pull out of the hat ?

My reading of the NZOG shareprice is that its discounted primarily because both Pike and Kupe still have quite a distance to go, and because of the inate constrictions that Kiwi investors bring to the NZX, particularly w.r.t. a resource company, just not comftable with the risks still attendant, and then also following the sub-prime fiasco, risk discounts have been increased world wide.

The CEO should be running the company, and should have significant input into the AGM. This year's AGM should have been focussed on the celebration of a tremendously successful Tui project. It should also have been used to clarify the "growth strategy". Instead we saw a pretty average meeting, still no clear direction - just enough information to generate unease among investors but nothing specific. It was an event that appeared to focus on management at the expense of shareholders.

The growth strategy has been very poorly promoted. It was approved by the board, but no details were given to shareholders at the time. Now the CEO has had his major annual opportunity to communicate with shareholders, and has still not made his intentions at all clear. This gives rise to suggestions that the new strategy will be as well managed as the last major project - "$86M and 18 months and Pike will be up and running"! I know of some people who have gained the impression that the company is in trouble, and hence has abandoned it's previous strategy for this new direction. That means communication has been very poor.

Tui has been an extremely successful project by any measure. While NZO management do not really merit much of the kudos, there is no reason why they should not claim a great success on behalf of the company. Instead shareholders have been presented with an announcement that US $7.5M had been received from Tui shipments. Production started in "July" and by the end of September only $7.5M was received! True if you are a beancounter, but hopeless presentation from a marketing perspective. There are few ways of making the figures look worse. Surely something more should have been made of the value (in $NZ, because the figures are bigger) of the oil extracted to date - a vastly larger figure. Instead all the shareholders received was some apologetic waffle that indicated that initial shipments may have been at a substantial discount.

The CEO has had an armchair ride, with the price of oil being where it is. There is plenty there to generate enthusiasm from. But he has clearly failed to generate buying interest in his company's shares - a good CEO of a public company should have that ability. Our new CEO clearly has not, at this stage.

Pike does not have any distance to go, as an investment. It is now listed and the market has set a value that takes into account any uncertainty regarding its operations. The value to NZO should now be pretty clear - and the CEO should have pointed that out, along with the possibilities for an increase in the value of that investment.

[boysy]

i think once financial statements come out clarifying how much they are raking in through TUI support wont be needed . Though in saying that it would be a heck of alot easier if management worked a bit more for shareholders.

[Mick100]

Unicorn - has it occurred to you that the low key nature of the AGM may have been quite deliberate on the part of board and mangment
- that's the impression that I left with
After "over promising and under delivering" for yrs, maybe they have decided to change tactics and "under promise and over deliver" which, in my opinion, is a far better way of managing an oil exploration/production company over the long term

The shareprice will equate to the intrinsic value of the company at some stage in the future - I don't know when, but it will happen
As warren buffett says "the sharemarket is a mechanism that transfers wealth from the impatient to the patient"
/

[Nitaa]

Could be the case Mick. As a new commer to a company I would want to see someone who is confident in their own and company's ability to create value for its shareholder. As i have said, it was a golden opportunity for DS to to come in as the white knight.

Its worth to note, its not who the company or ceo is but how they are perceived. Clealry that perception isnt a good one from the shareholders perspective. When david came on board, things were falling into his lap and the sp increased. Now with the failures of the lates drilling, subprime etc, doing nothing or appear to do nothing will have a detrimental effect.

All aside, maybe too early to judge after just 1 agm (even thoough i wasnt there) but for the ones who were there, did he give you confidence? My overall take is he performed very mediocre..4 of out 10?

[Mick100]

Nothing that DS said impressed me much - you would have thought that he had just joined the company the day before the meeting the way he was talking, ie , I didn't learned anything that I wasn't already aware of apart from this talk of aquisitions - and he's way behind the 8 ball there, imo - you would have to pay an arm and a leg to aquire another oiler today.

The point is this;
Does it matter that we havn't got the best chairman or CEO in the business - NZO is producing 5000 bpd - that's what matters to me
,

[Unicorn]

Unicorn - has it occurred to you that the low key nature of the AGM may have been quite deliberate on the part of board and mangment
- that's the impression that I left with
After "over promising and under delivering" for yrs, maybe they have decided to change tactics and "under promise and over deliver" which, in my opinion, is a far better way of managing an oil exploration/production company over the long term

The shareprice will equate to the intrinsic value of the company at some stage in the future - I don't know when, but it will happen
As warren buffett says "the sharemarket is a mechanism that transfers wealth from the impatient to the patient"
/

I have thought for a while that there has been a deliberate move to keep the good news to a minimum until the runup to NZOD conversion. A major PR offensive at just the right time might get the price moving so that it breaks 150c at option expiry. There is not a lot of liquidity, so when the share price starts climbing it could run quite well.

This is not a strategy I agree with - I would rather see a steady return to loyal shareholders rather than an environment that encouraged short term trading.

[shane_m]

give TR a break guys, he is having a good time in sydney. its ok to have a good time...oil is flowing, it will eventually get a re-rating. only Yogi can predict when.

few other oilers one should have a look at : AMU/PSA/OEL

[Awamoa]

Congratulations to those that bought at 97cents today.I sense you got a bargain.I tried and missed.

[Chippie]

It has got me stuffed what the answer is, but I do not think the current price is directly related to NZO management.

What is really strange is that NZO (-23%), PPP (-39%) and AWE (-21%) are all significantly off their recent 6 months highs. So either the market heavily priced in an expected discovery at Hector or the market does not believe that Tui is actually producing.

My guess is that the price will change pretty quickly after the next quarterly result.

[bermuda]

Hi Bermuda,

Nothing personal, I know that you are a big fan of NZO.

It is obvious from the share price that NZO aren't doing a good job of marketing themselves.
With revenues that they are experiencing through TUI, one would expect the share price to be rallying, not in decline, and it appears almost like that they have two fingers in the air waved at shareholders. I am in favour of anything that you or anyone else can do to reverse the above. I am absolutely staggered that NZO have not tried to arrest the downtrend.

Paddie

Paddie,
thanks for replying. What I really wanted you to comment on was whether or not a published 10 year plan would help. I am sure it would. This is what is needed imho to show the market what this company is all about.

[digger]

Bermuda while i like the idea of a ten year plan,would it not in effect just open the door for more down ramping just as soon as something does not go the right way. I suppect the managment by now are aware of this and if forced to do a 10 year plan would greatly underpromice so to at least meet that target. An under target might be worse than no plan. Just a thought.
Why NZO is falling at this time beats me. Maybe expecting a hugh fine do to the oil spill,as all Tui partners have fallen. Also maybe risk of world fininical markets from subprime.It now seems that only money in the bank is accepted to the markets,as risk free.World fininical meltdown is on the cards. See even at the Indian resort of Taj Mahal american dollars are not accepted. Ten years ago that would be unthinkable.
So a ten year plan on todays rapidally changing world has some risks.One slip up and Sniper will reappear and remind us how NZO can never dilever as promised.

[sideline]

meanwhile in other news....

[zorba]

Sideline, very interesting !!!!

And further in the meanwhile ......

Nymex light crude cracked US$99 / barrel earlier today:

.
http://data.tradingcharts.com/intraday_charts/charts/31e1767076c61f855d434404e64ae20b.png?
.

[bermuda]

Just regarding David Salisbury,

I had 23 years in the oil industry, invested my money in it and retired.

I rate him pretty highly. Have a look at his background.

[fish]

digger
Agree with you that a 10yr plan is a little ambitious but really investors need some kind of financial projections over the next few yrs under different pricing and production figures .
The company must have them . TR will have access to them . He is holding millions of options and shares and most probably knows they most likely will reach $1.50 or a lot more by June .
It seems unfair that many inexperienced investors wll look at todays share price and in their ignorance will sell options while Tr will hold knowing he is reasonably secure .

[skinny]

It has got me stuffed what the answer is, but I do not think the current price is directly related to NZO management.

What is really strange is that NZO (-23%), PPP (-39%) and AWE (-21%) are all significantly off their recent 6 months highs. So either the market heavily priced in an expected discovery at Hector or the market does not believe that Tui is actually producing.

My guess is that the price will change pretty quickly after the next quarterly result.

All my oil stocks are off at least 10% since the latest rally in oil prices over the past couple of months. No its not poor investment choices - all the oil related indexes are off by similar ammounts. What has happened is an interesting disconnect between the equities market and the oil and oil futures markets. The former is "saying" the recent increase in the price of oil is unsustainble and will cause larger correction in the price of oil, reducing earnings significantly in the oild patch. The futures strip is saying bull**** to that. My money remains on betting the latter interpretation is correct.

[bermuda]

Upside,
No worries mate. Just some rough figures eh.

I wish Waaihoek would do an updated valuation.He put alot of work into it but I think the knockers put paid to further updates.Pity really they were very good.

Let's see what AWE say about Tui on Thursday

I think today is going to be a good day.

Check on the announcement.

Tui reseves upgraded to 41.7 million barrels. Thought this was going to happen eh Digger!

[trackers]

I think today is going to be a good day.

Check on the announcement.

Tui reseves upgraded to 41.7 million barrels. Thought this was going to happen eh Digger!

ARGH! Had an old-ish sell order tripped last night for my nzo.asx shares. woe is me.

Think I might buy some AWE today.....

[Lazza]

REL: 0932 HRS New Zealand Oil and Gas Limited

MINE: NZO: INCREASE IN RESERVES FOR TUI

Oil Reserves for the Tui Area Oil Project have been increased to 41.7 million
barrels, 30% above the previous estimate and nearly 50% above pre-development
predictions.

The new figure for proved and probable (2P) reserves compares with estimated
reserves of 27.9 million barrels on which the Tui Area Oil Project in
off-shore Taranaki was first sanctioned, and an interim re-estimate of 32
million barrels following completion of the development drilling campaign.

New Zealand Oil and Gas Ltd (NZOG) has a 12.5% share of the Tui Area Oil
Project. NZOG's share of the reserves has increased from 3.5 million barrels
(pre-development) to 5.2 million barrels.

Tui oil is a light sweet crude that is generally sold, with freight and
quality differentials, against the Tapis benchmark crude, which has recently
surpassed US$100 a barrel. The reserves upgrade for NZOG of 1.7 million
barrels, at current oil prices and exchange rates, has a gross value of more
than NZ$200 million.

The increase in reserves follows a reassessment of the field by the operator
(AWE) based on interpretation of re-processed 3D seismic, a more detailed
assessment of the Kapuni reservoir and the integration of the production data
from the fields since production began on 30 July 2007. The increased
reserves assume production from the existing four wells, plus the completion
of an additional development well in the Tui oil field, Tui-4H. Preliminary
planning for drilling of this well has begun, with drilling targeted for
2009.

Since the start of production on 30 July 2007, the Tui Area Oil Project has
produced approximately 4.4 million barrels of oil. Recent production rates of
up to 50,000 barrels of oil per day have been achieved, with the current well
capacity still substantially higher than the processing capacity of the FPSO
Umuroa. Water is being produced from the field, but at substantially lower
rates than expected. Based on the current reservoir and facility performance
and the upgrade in reserves, AWE has revised the Tui gross oil production for
the year to 30 June 2008 up from 10 million barrels to approximately 11
million barrels (approximately 1.4 million barrels net to NZOG).

[Hoop]

Tempting but convincing myself not to accumulate
TA....has fallen out of its trading range 100-109 ..downwards!! bad sign
World markets look dodgy..nearly wrote doggy..same thing. bad sign
but...
Oil price creeping back towards their highs good sign
PRC shares going up ...still....good sign

2 bad + 2 good equals ...a dilemma

No, won't buy...I will probably end up hating myself in the morning!!
Buying order in at $1.05 pre-opening
Could've accumulated at 98c
It is morning and I hate myself!!:(

[bermuda]

The beuaty about this thread is that I know a few of the big sellers. Once the overhang goes watch out.

Well WATCHOUT

[777]

600,000 buy order at 1.10

[QOH]

Go NZO!!! About time we had a good day.

[boysy]

haha yes indeed where the baggers today huh

[dsurf]

PRC on a roll - Tiu pumping circa 130? million revenue - options worthless???

[Toddy]

One has the feeling that there are too many ducks in a row to ignore NZO now.

Forget about a small correction. If there are a few believers out there then this stock could really fly.

Todays announcement is a real turning point for me. Especially when added with the volumes going through PRC over the last few days.

GO NZO!

[boysy]

And i am guessing NZO will be mentioned in the business portion of the news tonite now thats advertising you cant pay for now is it.

[Crypto Crude]

this is massive news for NZO... $200m worth...
SP should have reacted much stronger.....
NZO the little battler...
:cool:
.^sc

[seaosh]

Yeah, the buyers are still holding back. . . not many willing to chase above 1.10.

[boysy]

are we waiting to see how ASX will treat NZO today i guess thats the question

[Bilo]

Excellent news!!

Typical Kiwi investor response tho - obviously don't understand/don't want to get drawn into risky oil company investments.

By my rough calculations the share price rise values additional reserves at about $16 per barrel. Whoever got half a million at 1.10 got a real bargain.

I thought "in ground" reserves (undeveloped at that) had been selling for over USD30?

[the machine]

very good news re tui upgrade.

a progress report re kupe jacket installation is overdue.

kupe in long run will produce more $ than tui - even with the upgrade


see nzo made the announcement first on asx - instead of awe

M

[Dr_Who]

Very nice :). It has broken through the $1.10 resistance, so should go north from here. :)

[shane_m]

Dunk and Balance no where to be seen ?

[duncan macgregor]

Dunk and Balance no where to be seen ? I am painting the house have more important things on my mind than NZO. The options are still going to be worthless when the music stops thats when you will find out. So what an upgrade how much will come your way it will more than likely end up in the trough. Lot of investors still playing catch up who will be glad to get out they need to court a new set of the blue eyed brigade to take their place. Macdunk

[bk]

Great, 9.7 million more barrels, or 1.2 million for NZOG @ $100 USD gives us $160 NZD extra. Divided by 360 million shares that would add a good 40 cents to the share price.

Of course to be discounted by
-this is oil in the ground, not money in the bank (things could go wrong)
-the money will only become available over the years
-some would say management will only spend it on higher salaries and more exploration
-some production cost (no idea how much)

on the other hand
-over time the oil price will only go up (90% sure of Peak Oil pushing it up, 10% chance of economic meltdown lowering the price)
-this almost makes sure that we'll have two years of full revenue before it tapers off. No financial problems supporting Pike or Kupe.

And then there is Pike, going strong and getting better as each day passes, with coal at record price

And then there is Kupe - about time we hear something about the project progress. I assume no news is good news.

My bet is that we still need one good result of one of the Kupe drills to push the options over the conversion - else it might be pass the parcel. But not yet!

[rimu]

well, hasn't this one been a lesson in patience... :)

[boysy]

well as reported by the herald NZOG as a "bright spot" in the market with head line

"Tui oilfield to offer larger bounty than forecast"

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10477697

[digger]

This year NZO should report an excellent result due to Tui income, but next year that should be expected to fall away as Tui production reduces markedly, before picking up again the following year as Kupe comes on stream.
End Quote from Unicorn

Unicorn your comments are always something to look forward to. I would say all considerable them valuable. Your comment above is the official line and what the market accepts, it is also the most likely to turn out to be wrong. Tui is more than likely to supply a revenue long enough that no dip will occur before Kupe kicks in. Am lookinh forward to AWE's AGM on thur 22 as it may highlight where Tui production is likely to stand.

This is the first time on sharetrader i have quoted myself. This increase i expected and in fact i do not think this will be the last of what will be achieved fromTUI. TUI H4 is still up the sleve and also maybe some extra vertical drill to find more pockets are very likely.
The market reaction is as it always is with NZO where it is consertive and esentially says show me the money. 30% increase will largely go into profit as the capx cost are already factored in.Very little extra cost will be required to get this 30% additional oil.
Probably the market has not yet fully factored in this good news as it is largely a down day on the sharemarket. NZO and PPP are swimming against the tide. Another big factor is in my quote of some days ago. It now means that going forward some years NZO will not have the dip in revenue between TUI and PIKE and KUPE. That when fully realised will be very positive. Market do not take kindly to revenue dips.

[upside_umop]

The increase in reserves follows a reassessment of the field by the operator
(AWE) based on interpretation of re-processed 3D seismic, a more detailed
assessment of the Kapuni reservoir and the integration of the production data
from the fields since production began on 30 July 2007. The increased
reserves assume production from the existing four wells, plus the completion
of an additional development well in the Tui oil field, Tui-4H. Preliminary
planning for drilling of this well has begun, with drilling targeted for
2009.



It has been said for a while now that the water cut is below what is expected, so will this mean higher production for longer? Will this also have led to increased reserves? Or just purely on seismic?

Digger, it looks like the 2010 financial year will have massive revenue with the drill for Tui-4H planned for 2009, and Kupe coming fully onboard then...pike will be fully operational and most likely ready to be put under the hammer.

[Toddy]

I am painting the house have more important things on my mind than NZO. The options are still going to be worthless when the music stops thats when you will find out. So what an upgrade how much will come your way it will more than likely end up in the trough. Lot of investors still playing catch up who will be glad to get out they need to court a new set of the blue eyed brigade to take their place. Macdunk

Using 'oil' based paints I presume.

I hope that you didn't fall off your lader when the 30% increase in Tui reserves news came through.

[Bilo]

Here I go ramping again. Up or down depending on your politics….

Re: Tui Project's improving the NZ balance of payments by one billion USD….the entire annual wine industry contribution…adding $25M in capitalisation to NZO

Altogether a miserable response from Kiwis deserting their own.
NZ Oil and Gas is obviously another candidate for the drain out of NZX.

After this a “one AWE share for two NZO shares” offer from AWE would look very attractive for a long time holder. Option holders may front with the $1.50 cash to participate.

Only 200M AWE shares required to take out 260M NZO shares and 140M NZOOD options.

AWE get a foothold in Kupe, more of Tui coin, increase interests in highly prospective PEPs near existing producing wells, and cash in their bank. Sale of the majority share in PRC and $210M in cash from Option holders, could net well over $400M cash to AWE (in just two months, by February, after the tunnel has reached the coal, bank funding has increased, and the coking coal price increase is announced).

AWE increase their cash, reserves, projects, gain a developing but promising NZ team, and every shareholder’s future prospects. Then assimilate Nexus and we have another Woodside in the making…dreams are cheap…so are NZ institutional share buyers….
Are (Dr) Cullens miserable miserly traits being cloned in this country?

NZX and NZ are the potential losers from this continued lack of interest and support in their home grown resource companies.

Oh yes, I know it was a down day in the US of A – but not for oil stocks.

[Mick100]

Using 'oil' based paints I presume.

I hope that you didn't fall off your lader when the 30% increase in Tui reserves news came through.

:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D:D

[Dr_Who]

Abit of selling hitting NZO. Nearly 1.5 million shares traded. I dont understand why people are selling at $1.10?

[Mike.Gayner]

Fed up investors getting out while it's good? Probably a hasty decision, to be honest.

[Dr_Who]

I am tempted to top up at $1.10 and accummulate more shares. Just biting my nails and cant make a decision!!!! :confused:

[KiwiBear]

Just a classic buy on the rumour (hunch) Sell on the fact happening!
Those that bought sub $1 and are making a cool gain on those people buying on kneejerk good luck to em! Wish I had the cash to have bought after the Hammer candle the other day :-(

[Nitaa]

I am sure there has been desperate sellers for a long time and this gives them and exit chance. The upgrade, maybe partially already factored into is worth at least 25 cps. This is no brainer stuff and aprt from a colapse in oil prices, sellers today will kick themselves.

Macdunk. You always manage to find a black lining amongst a silver cloud. Meanwhile Balance is on medial leave..suffering from a major heartattack. He will come back when NZO dips another 20 odd percent. Except this will be when nzo is a lot more north than what it is today.

OK NZO, its time for your PR machine to kick in. Well done to the patient ones like Digger and Bermuda.

I wont be surprised to see the SP at $1.20 or more within a week.

ps. Anyone has Balance's addres so i can send him some sympathy flowers?

[airedale]

Dunk and Balance no where to be seen ?

Shane's post was at 12.01 It only took Dunc 9 minutes to get down off the ladder, was his brush out, and pop up right on cue.

When there was no news, NZO was always on his mind....every second post. But when there is good news, Dunc doesn't want to know:p

[Nitaa]

Just a classic buy on the rumour (hunch) Sell on the fact happening!
Those that bought sub $1 and are making a cool gain on those people buying on kneejerk good luck to em! Wish I had the cash to have bought after the shooting star candle the other day :-(Yes your probaby right along with the ones who have had their tail between their legs over the last few months.

But an extra $100m plus to the coffers subject to oil prices means a 10 cps increase today doewnt add it. It soon will. PPP and AWE is still a steal today as well.

[dsurf]

This is not meant to be an accurate assesment of costs but thought it was interesting - NPAT of $100mill & Revenue of $200mill not impossible???? Share price should be $1.50????



Share price cps 110

Shares on issue 261,905,658
Options 138,837,891
Diluted shares on issue 400,743,549

31 Jul to 22 Nov 4,400,000 barrels of oil
23 Nov to Dec 31 1,872,000 barrels of oil
total (5 mths) 6,272,000 barrels of oil
nzo at 12.5% 784,000 barrels of oil

tapis average us$ 90

nz to usd 0.77

tapis average nz$ 117

$ to nzo 91,636,364

50% costs?? 45,818,182

profit for 1st half (5 months tui) 45,818,182

2nd half (6mths) 54,981,818

full year profit 100,800,000

EPS 38.5
PE 2.9
diluted eps 25.2
diluted pe 4
Sp
If diluted pe was 5 126
If diluted pe was 6 151
If diluted pe was 7 176
If diluted pe was 8 201
If diluted pe was 9 226

[duncan macgregor]

Shane's post was at 12.01 It only took Dunc 9 minutes to get down off the ladder, was his brush out, and pop up right on cue.

When there was no news, NZO was always on his mind....every second post. But when there is good news, Dunc doesn't want to know:p
I got off the ladder at lunchtime always look at the market at that time. What i think only matters with my money you go for it hope for your sake it gets back to its high point of a couple of years ago. I expect a lot of releaved sellers bailing out on the way up getting their money back. I would not get to worked up until the sp reaches a new high its still playing catch up. Macdunk

[KiwiBear]

You guys seem to know oilers more than me. What's the best oiler to buy when there is the eminent correction due in oil, once the northern winter buying has stopped. So I can pounce when the timing is right
and let you guys know!

Is it AWE, PPP, NZO or an another Aussie NZ share.

[shane_m]

You guys seem to know oilers more than me. What's the best oiler to buy when there is the eminent correction due in oil, once the northern winter buying has stopped. So I can pounce when the timing is right
and let you guys know!

Is it AWE, PPP, NZO or an another Aussie NZ share.

I am no oil expert, you should have a look at AMU and PSA.

[OutToLunch]

This is not meant to be an accurate assesment of costs but thought it was interesting - NPAT of $100mill & Revenue of $200mill not impossible???? Share price should be $1.50????



Share price cps 110

Shares on issue 261,905,658
Options 138,837,891
Diluted shares on issue 400,743,549

31 Jul to 22 Nov 4,400,000 barrels of oil
23 Nov to Dec 31 1,872,000 barrels of oil
total (5 mths) 6,272,000 barrels of oil
nzo at 12.5% 784,000 barrels of oil

tapis average us$ 90

nz to usd 0.77

tapis average nz$ 117

$ to nzo 91,636,364

50% costs?? 45,818,182

profit for 1st half (5 months tui) 45,818,182

2nd half (6mths) 54,981,818

full year profit 100,800,000

EPS 38.5
PE 2.9
diluted eps 25.2
diluted pe 4
Sp
If diluted pe was 5 126
If diluted pe was 6 151
If diluted pe was 7 176
If diluted pe was 8 201
If diluted pe was 9 226

Seems reasonable enough. Surely the options are worth a punt at these levels... if I wasn't a non-trader I'd be tempted to grab a few more now and flick 'em off before expiry.

[Toddy]

Seems reasonable enough. Surely the options are worth a punt at these levels... if I wasn't a non-trader I'd be tempted to grab a few more now and flick 'em off before expiry.

I took a punt on the options this morning. Before today I gave them about a 10% chance of being exercised. Today I give them a 80%. Why, todays announcement fundamentally changes the outlook for NZO. The extra projected cashflow now gives them additional options re financing. With the current cost of capital around double figures the interest savings alone gives the NZO shareholders many millions in increased value.

I have also been watching the share trading in PRC closely, and based on the high volumes and appreciating share price of recent days one could easily assume that there is some serious activity happening in the ownership of PRC.

Does anyone know any good painters out there.

[Mick100]

Does anyone know any good painters out there.

I know of a very efficient painter - he does'nt use a brush - he just takes a mouthful of paint and sprays it on while giving investment advice. :D
,
.

[Nitaa]

Does anyone know any good painters out there.Yes, Macdunk. He cant paint the most gloomiest outlook on the brightest day

[duncan macgregor]

Yes, Macdunk. He cant paint the most gloomiest outlook on the brightest day NITA surely you mean he can paint the gloomiest picture. Be realistic take the emotion out of it, look at this in a calculated way.
In Jan 2005 the share price peaked at about $1-27 then dropped back to about 78c at its low point. In july 2007 the share price peaked at about $1-35 then dropped back to under a dollar. The share price has jumpted up to $1-12 which gives some hope to people who bought to high to get out when in profit. Over the last three years the share price has averaged about a dollar so for many its been a waste of time. The hype was just as great if not greater three years ago. Thats not the point, the point is will the herd continue playing catch up to a new high, or even get it into the $1-50 plus region to make the options worth something by july. The options were 30c at one stage making conversion for those poor mugs at $1-80 just to break even. It will be interesting to see how it all pans out, will the company get with it or not?, thats all that holds the sp back. Macdunk

[Awamoa]

With all this extra income from Tui surely it reduces the need for the options to be exercised?

[shasta]

With all this extra income from Tui surely it reduces the need for the options to be exercised?

If NZO wants to achieve its stated intention of producing 2mmbo per year (with reserves) it will need the funds to make an aquistion.

Cheap funding for NZO.

[manxman]

Really, its screamingly effing obvious. I bailed out of the ODs when I could get 7 heads for every two OD buying on 50% margin. As shown on the old site, it was better to buy heads on 50% margin, than options, unless the heads went above $1.90 Check back and see who first used the expression "pass the parcel" that McDunk has adopted. Even if you do think that the heads are going to pass $1.50 buying heads on margin is still a lot safer than the ODs, and higher yield unless the heads get up to $1.90 by June

Mx

[Unicorn]

With all this extra income from Tui surely it reduces the need for the options to be exercised?

There has never been a need for the ODs to be exercised. They appear to have been created to deter a takeover, rather than to raise equity. Their timing was really odd, because it was expected that both Tui and Pike would be in full production by June 2008 - Pike has been much delayed since then.

At the time the ODs were first dished out, more funding would have been very helpful - yet they were given away free. This kind of strange and unexplained capital management is probably one of the reasons why the market at large lacks confidence in NZO management.

[Onthemoney]

Well said Unicorn. Watch for another lot of options to be given around time of expiry of current.

[bermuda]

Well said Unicorn. Watch for another lot of options to be given around time of expiry of current.

I dunno,
My thoughts at the time of these options were

Well, if Tui can deliver on time,
If Hector can deliver as 'predicted'
If Tieke came in
If Taranui came in
If Kupe doubles its volume

and we establish a Taranaki Fairway......well we are going to need some money.

I mean this is what happened. I wish more people could understand.

[boysy]

to be honest for the options taken up it will take some effort by management. Hence so far apart from saying its their goal to have them excised they have taken little action to date. Why would they need more money with TUI money flowing in im sure banks would raise their credit line on new projected cashflows. The market needs a sign from management that they not only want them to be excised, but that they are willing to step in to help make them exciseable.

[Bilo]

Bermuda, yes we are down to the LAST if,

Awamoa, the NZO Board has never identified a specific need for the $240M.

Shasta, I think DS has set for himself the classic "stretch target" that is no stretch at all. Like keeping the share price low so that your option exercise price is not a stretch. The chances of NZO failing to produce 2Mbo pa are slim. Upgrades to Tui, prospects near Kupe, and the new PEP near Maui ensure that it will be a doddle. DS has a legal mind - "never pose a question that you don't already know the answer too...."
Need acquisition moneys, need to double exisiting shareholder capital, B...S....
Unicorn, I agree with you, again...a takeover foil, up until first half 2008.

From the released material, the AWE guys showed themselves up again by saying nothing, disclosing nothing new, playing the AGM tight to their chests, wasting the opportunity to inform their shareholders of the really good work that is being done, but still asking permission to saunter up to the trough for a top up of share options for management - after buying peace with the surprisingly timely (but early) announcement of the Tui reserve upgrade. What a farce these AGMs are becoming - or have they always been like this? Some put this behaviour down to operator privilege - I put it down to communication failure. How long will it be before the new AWE CEO moves out?

[Nitaa]

NITA surely you mean he can paint the gloomiest picture. Be realistic take the emotion out of it, look at this in a calculated way.
In Jan 2005 the share price peaked at about $1-27 then dropped back to about 78c at its low point. In july 2007 the share price peaked at about $1-35 then dropped back to under a dollar. The share price has jumpted up to $1-12 which gives some hope to people who bought to high to get out when in profit. Over the last three years the share price has averaged about a dollar so for many its been a waste of time. The hype was just as great if not greater three years ago. Thats not the point, the point is will the herd continue playing catch up to a new high, or even get it into the $1-50 plus region to make the options worth something by july. The options were 30c at one stage making conversion for those poor mugs at $1-80 just to break even. It will be interesting to see how it all pans out, will the company get with it or not?, thats all that holds the sp back. MacdunkI cant believe that i am going to say this. You post for most aprt of it is true. well done macdunk.

some points. Im not too concerned on what nzo has done in the past as although it can be a guide but should not be used to determine the future. The last years years an nzo investors has made stuff all. that is easy in hindsight. The last 4 or 5 (from a low of 25 or 26 cps) years has given the holder a return of over 40% pa every year. Those figures are nothing short of sensational.

Yes the hype was bigger back 3 years ago hence the incredible run that nzo and option holders experienced. Ina all fairness that was acurately played out as Tui exploration, Pike getting the go ahead etc were significant news. The hype this time round was fairly subdued and the results reflected in most investors sentiments on the likelyhood of success.

Will NZO reach a new high? In the next 5 months i rate it a 90% chance and i guess that is the reason why i still hold some nzo. But that is only my opinion.

$1.20 on the cards within a week (25% chance)

[bermuda]

I tell you what

This is NZ's most undervalued share

And a lot of you guys think I am joking.

Well; show me another.

[Toddy]

Believe it or not. NZO today announced via the Tui operator AWE that NZO (Management) and shareholders have to do nothing except sit back and watch a bundle of cash roll in.


NZO is now a new beast. The SP will react to CASH sooner or later. $1.50 looks easy from here.

[bermuda]

Believe it or not. NZO today announced via the Tui operator AWE that NZO (Management) and shareholders have to do nothing except sit back and watch a bundle of cash roll in.


NZO is now a new beast. The SP will react to CASH sooner or later. $1.50 looks easy from here.

Exactly Toddy. For a moment I thought I was alone.

Good luck to oppie holders.

You will get rewarded if things go to plan

[Crypto Crude]

bermuda
I tell you what

This is NZ's most undervalued share

And a lot of you guys think I am joking.

Well; show me another.

bermuda
How about TRS... buyers are at .1 of a cent....thats $.001....
cant get any cheaper than that B...
haha...:D....
....
The real value of the massive increase in Tui oil reserves is worth allot more than the increase of NZO's SP today...
25-35 cents is the real value eah...
....
What would NZO do with OD conversion money?... well the way some posters react around here seems like they would expect the company to pay it out as a juicy dividend...
:D
.^sc

[Hoop]

I tell you what

This is NZ's most undervalued share

And a lot of you guys think I am joking.

Well; show me another.

DPC :)
Net Asset backing $1.83/share
Share price 90c
Can't be taken over..protected by STL

[Nitaa]

DPC :)
Net Asset backing $1.83/share
Share price 90c
Can't be taken over..protected by STLIt can be taken over if they are willing to sell. Also, i wouldnt read to much into the figures by DPC. Without looking at their financial records one suspects that they are likely to have significant writedowns in the next financial year.

[manxman]

"At this rate, NZOG's $140 million of existing accumulated tax losses may not last beyond its current financial year."

Thus spake John Kidd, analyst at McDouall Stuart Securities Ltd.

So a tax efficient dividend will be possible next financial year. Look for an announcement before 30 June in time to get the ODs over the hump. Now that NZO has a good cash flow, the banks will lend to PRC. Finding $20 million in ready cash shouldn't be a problem.

The market will only properly value this share based on fully imputed dividends. It probably isn't the right way to go for most of the posters on this thread, but there aren't enough adventurous people out there to drag the share price up, so the shares have to be marketed to a different community.

They could always have a dividend reinvestment plan to encourage the cash to stay at home.

Mx

[arjay]

The Tui upgrade is good news for the company, however is it good news for the shareholders? The Umuroa can't handle any more production so the increased reserves means oil can be produced for longer, probably at higher volumes (especially when 4H comes on stream in 2-3 years). Does this mean the start of crystalized returns to the shareholder or merely extended funding for exploration and staff remuneration? OK the current news has pushed the sp up to ~1.10, but we need to break out of the 90c-1.35 cycle for NZO to really be set on a new path. Unless the Co. spell out how increased reserves and high oil prices will benefit shareholders (apart from theoretical increases in SP) I fear that McDunks predictions hold more water than any other posters at the moment.

[bermuda]

The Tui upgrade is good news for the company, however is it good news for the shareholders? The Umuroa can't handle any more production so the increased reserves means oil can be produced for longer, probably at higher volumes (especially when 4H comes on stream in 2-3 years). Does this mean the start of crystalized returns to the shareholder or merely extended funding for exploration and staff remuneration? OK the current news has pushed the sp up to ~1.10, but we need to break out of the 90c-1.35 cycle for NZO to really be set on a new path. Unless the Co. spell out how increased reserves and high oil prices will benefit shareholders (apart from theoretical increases in SP) I fear that McDunks predictions hold more water than any other posters at the moment.

Just one day after the great news the old NZ Tall Poppy Syndrome reappears.

Give it a break mate

THIS IS GOOD NEWS. CELEBRATE. I am sure Mr Radford is. He wont be there forever, has a huge amount of shares and he and his family will be looking forward to DIVIDENDS.

Do we have to go over this all again?

[Toddy]

How do NZO shareholders celebrate a 'bonanza' of millions!.

All of this cash now makes PRC look like a giveaway. Oh how things can change.


Oil bonanza set to make NZOG millions
By JAMES WEIR - The Dominion Post | Friday, 23 November 2007

The Tui oilfield, off the Taranaki coast, is almost a third bigger than thought - news that pushed up partner New Zealand Oil and Gas' share price 11 cents to $1.12.


The oil reserves for the field are now put at 41.7 million barrels, up from the previous estimate of 32 million barrels. Getting about half of the extra reserves will involve drilling one more well, which is expected to cost tens of millions of dollars.

A large part of the reserves will come out of the field in the next two years, but smaller amounts over at least the next decade.

New Zealand Oil & Gas has 12.5 per cent of the field.

Its share of reserves has moved up to 5.2 million barrels, potentially worth about $600 million over the life of the field if oil prices remain at such high levels.

The increase puts NZOG in an even better position to carry out plans to expand, through a "growth strategy".

"We are looking at further exploration, possible farm-ins to other permits and possible acquisitions," NZOG spokesman Chris Roberts said.

Revenues are likely to be well above last month's estimates of $100 million this financial year and could head close to $170 million on present high oil prices.

"If the oil price stays where it is, we are going to have significantly higher revenue this financial year than we predicted," Mr Roberts said.

The Tui field produces a light crude that is generally sold, with freight and quality differentials, against the Tapis benchmark crude, which has recently surpassed US$100 (NZ$135.06) a barrel.

Production costs at Tui are about NZ$15 a barrel, so the actual return to NZOG and partners from each barrel could be close to NZ$120.

The 1.7 million barrel increase in reserves for NZOG has a gross value of more than NZ$200 million, before production and freight costs.

It will get revenue from 1.4 million barrels from Tui this financial year, worth at least NZ$100 a barrel after production costs, and possibly as much as NZ$120 a barrel, implying revenues could be as much as $168 million.

Mr Roberts said NZOG was looking to expand throughout New Zealand, but was not looking overseas. United States oil company Swift is marketing its New Zealand interests, but NZOG would not say if it was considering that. Swift's interests include the Rimu-Kauri and Tawn fields, two natural gas processing plants, an oil processing plant and oil and gas pipelines.

"If there is an opportunity, currently available, we are investigating it," Mr Roberts said. "We want to cherry-pick the best opportunities. We are not going to make an investment for the sake of finding a home for the cashflows."

However, NZOG needs to repay the debt on Tui's development, US$27.5 million. Most will be repaid this financial year, as will a further $15 million on working capital.

It also needs to spend about $160 million on its share of the offshore Kupe gasfield development, with $60 million already committed and the balance due by mid-2009.

The Tui field is about 50 kilometres offshore and cost almost US$270 million (NZ$360 million) to develop. It is 42.5 per cent owned and operated by Australian exploration company AWE. Japanese firm Mitsui holds 35 per cent and Pan Pacific Petroleum 10 per cent.

[JBmurc]

Very happy to be holding my recent purchase of 74400 NZO's esp. when my ASX portfilo is getting hammered-One of many factors to stir the market in rerating NZO closer to 1.50 will be recording a higher NPAT profits than expected and now with an increase in reserves NZO should have higher cashflows for longer which will blend in well with NZO's other project cashflows coming onstream

I am 100% confindent NZO will be 1.50+ this time next yr (sooner rather than later would be even better)



--Revenues are likely to be well above last month's estimates of $100 million this financial year and could head close to $170 million on present high oil prices.--

[boysy]

Are NZO being overly consevative for a reason i mean cashflow of $100m should be achieved before the end of the 3rd quarter do we expect a announcement changing this forcast soon ?

[trackers]

Unfortunately I missed the latest wee surge, bugger.

NZO down 2c today... The crazy thing is, I'm not really altogether surprised. Great announcement, good result for the company... Market reaction? fairly ho-hum (just like every other great announcement over the last 4months or so).

Whilst I like NZO I just can't see myself holding again until market sentiment towards this coy changes... I'd rather expose myself to something like AWE.asx

[bermuda]

Are NZO being overly consevative for a reason i mean cashflow of $100m should be achieved before the end of the 3rd quarter do we expect a announcement changing this forcast soon ?

Boysy,
Chris Roberts said today the figure was more likely to be $170 million for the first year of Tui.

This stock has Tall Poppy all over it. It's actual worth is well over $2.00

Such is the NZ oil and mining market.

[JBmurc]

Boysy,
Chris Roberts said today the figure was more likely to be $170 million for the first year of Tui.

This stock has Tall Poppy all over it. It's actual worth is well over $2.00

Such is the NZ oil and mining market.

---You would think even a novice NZ investor would see NZO as a Core holding in a NZX portfilo(what other Investment on the NZX give investors a direct interest to the high Oil price- PPP,NZOO)And best of all there mid-term outlook 2-3yrs future Gross revenue is looking higher than there current MKtcap Little downside IMHO

[Ripping]

i can see this thing sliding all the way back down to a dollar again.
Its only worth more if the market thinks so, and it seems... the market doesn't..
Will it ever ?.

[777]

i can see this thing sliding all the way back down to a dollar again.
Its only worth more if the market thinks so, and it seems... the market doesn't..
Will it ever ?.



Yes.

When? Can't be too far away.

[Crypto Crude]

MD was right, The upwards movement yesterday gave those the opportunity to sell out on a spike and now there are those that are selling off in the fall... OD's are back down....
future oil revenues are now expected to be $200million dollars higher...
what does mister market not understand about this?
If market wont move on such a monsterous ann like the one yesterday,
then what will it move on?
Can anyone lend me a couple of hundred million bucks so I can buy out this puppy...
:D
.^sc

[Dr_Who]

This maybe is a good opportunity to accummulate stock for those who have a med-long term view and still believe in the story. Those (like McDunk and others) who dont believe in the story/management will have the opportunity to get out. It depends which side of the coin you are on. There is no doubt in my mind this is a cheap stock, but the market is discounting it due to the lack of trust for some people running it.

[bermuda]

Shrewdy,
Might mount a takeover.

You interested.? Got a few who are.

Not as hard as you might think.Even though you may not be able to contribute much dosh you could do all the paperwork.

Be a good summer vacation exercise for you and a lot of fun.

[Nitaa]

Although some on the board need to be cleaned out, NZO holders should fear not. What the stock does short term is irrelevant. Paitience will be rewarded to the that hold. NZO options may be different. But as a holder of options myself i am not prepared to write them off yet.

Let the day traders worry what the stock do from day to day

[Toddy]

I've been out all day at Sea World ( a run down theme park in Surfers Paradise) and just got in and checked my stocks, expecting further upward movement in NZO due to yesterdays amazing announcement.

I don't really know what to say about the trading today in NZO.

I'll just scratch my head. I'm sure that even the Macdunks are scratching over this one.

[Chippie]

Although some on the board need to be cleaned out, NZO holders should fear not. What the stock does short term is irrelevant. Paitience will be rewarded to the that hold. NZO options may be different. But as a holder of options myself i am not prepared to write them off yet.

Let the day traders worry what the stock do from day to day

I agree 100%

[blockhead]

Tell me more, I could do with a producing oiler

With no dosh, whats the plan ?

[blockhead]

Tell me more, I could do with a producing oiler

With no dosh, whats the plan ?

The question was for you Bermuda....


Shrewdy,
Might mount a takeover.

You interested.? Got a few who are.

Not as hard as you might think.Even though you may not be able to contribute much dosh you could do all the paperwork.

Be a good summer vacation exercise for you and a lot of fun.

[duncan macgregor]

I've been out all day at Sea World ( a run down theme park in Surfers Paradise) and just got in and checked my stocks, expecting further upward movement in NZO due to yesterdays amazing announcement.

I don't really know what to say about the trading today in NZO.

I'll just scratch my head. I'm sure that even the Macdunks are scratching over this one.
Its quite easy to understand even after the good news comes out. NZO have pissed so many people off with their arrogance, that when the sp gets back to their buy in level they are gone. The level of trust is gone. When the sp gets above its all time high then you might predict market rationality. The company has been run in the past by an arrogent bunch of greedy selfish swilling at the trough you know what type of bast*rds. I scratch my head at what they have got, what the company is, but never would i contemplate buying back in at any price. Macdunk

[Onthemoney]

Its quite easy to understand even after the good news comes out. NZO have pissed so many people off with their arrogance, that when the sp gets back to their buy in level they are gone. The level of trust is gone. When the sp gets above its all time high then you might predict market rationality. The company has been run in the past by an arrogent bunch of greedy selfish swilling at the trough you know what type of bast*rds. I scratch my head at what they have got, what the company is, but never would i contemplate buying back in at any price. Macdunk


New shareholders need to read the comments over the past 20 years. Where is C9 when we need him.....

[bermuda]

The question was for you Bermuda....


Shrewdy,
Might mount a takeover.

You interested.? Got a few who are.

Not as hard as you might think.Even though you may not be able to contribute much dosh you could do all the paperwork.

Be a good summer vacation exercise for you and a lot of fun.

OK, A question for you.

How much cold hard cash do you think would be required ( as a percentage of the bid ) and what do you think the bid should be priced at?

[blockhead]

OK, A question for you.

How much cold hard cash do you think would be required ( as a percentage of the bid ) and what do you think the bid should be priced at?

Strewth, open ended question Bermuda, depend who was stumping up the shortfall, one or two of the finance companies who have fallen by the wayside may have been starters but I suspect a trustworthy lender would want 60 - 70 % equity. Of course the price a take over opportunist would pay has a big bearing as well, 20c per share and finance might not be difficult, $1.80 per share and you might struggle.

[skinny]

Shrewdy,
Might mount a takeover.

You interested.? Got a few who are.

Not as hard as you might think.Even though you may not be able to contribute much dosh you could do all the paperwork.

Be a good summer vacation exercise for you and a lot of fun.


not hard at all...

[Crypto Crude]

would a Chat forumn site hostile takeover be the first of its kind in the world?
The only problem is there would be no surprise, this thread is closely watched by NZO company officials such as BR....
We could use Personal message function, if only the damn thing could hold more than 30 PM's eah....
Nita,
we would replace board members with ST posters...:D....
we would hold a special meeting at the CHCH N convention and vote...:D....
some of the systems are already in place with a well managed wellington, Auckland, and chch (NC) meetings held on a regular basis...
I reckon we would go cheap and offer $1.40-$1.45 and up the anti if we had to...
:cool:
.^sc

[Nitaa]

would a Chat forumn site hostile takeover be the first of its kind in the world?
The only problem is there would be no surprise, this thread is closely watched by NZO company officials such as BR....
We could use Personal message function, if only the damn thing could hold more than 30 PM's eah....
Nita,
we would replace board members with ST posters...:D....
we would hold a special meeting at the CHCH N convention and vote...:D....
some of the systems are already in place with a well managed wellington, Auckland, and chch (NC) meetings held on a regular basis...
I reckon we would go cheap and offer $1.40-$1.45 and up the anti if we had to...
:cool:
.^scwell we do need some new blood. some of the others have tainted blood and unfotuntely the dialysis cant keep up.

just think. If you could get a hold of all the nzo shareholders data base (about 12,000 of them), see if they want to form some sort of private entity then we could mount some sort of takeover. first we get some decent board members, excecute a number of shareplacements to our private consortium to dilute TR and co's holding so they cannot form a blocking stake then wola. We have new owners, TR and co finally get about 10 cps.

[Toddy]

Its quite easy to understand even after the good news comes out. NZO have pissed so many people off with their arrogance, that when the sp gets back to their buy in level they are gone. The level of trust is gone. When the sp gets above its all time high then you might predict market rationality. The company has been run in the past by an arrogent bunch of greedy selfish swilling at the trough you know what type of bast*rds. I scratch my head at what they have got, what the company is, but never would i contemplate buying back in at any price. Macdunk

It still does not add up Macdunk. The shareholders own the wealth. And its real easy to value cash. So, whats really going on. Surely the ACC fund managers or who ever is dumping is rational and can put their emotions to the side for the benefit of whoever they represent.

[Nitaa]

It still does not add up Macdunk. The shareholders own the wealth. And its real easy to value cash. So, whats really going on. Surely the ACC fund managers or who ever is dumping is rational and can put their emotions to the side for the benefit of whoever they represent.I think acc held for some length of time. But like all fund managers, they will be on some sort of performance incentive. So selling stocks at a certain level to meet their performance objectives may actually overide their real sentiments of a stock.

Does this sound out of kilta? In some ways its possible that these people are like car salesmen. come the end of the month they may significantly reduce the price at their own cost to meet their overall monthly target.. something like that anyway.

Or..maybe they simply feel the stock is overvalued

[Toddy]

Yes Nita, the majority of fund managers in NZ come out of the same system and do not have the right experience to really make a difference to the NZ investment environment.

Did you see the article earlier in the week where the Tower fund managers managed to turn $1.2 billion into $600m this year on behalf of the NZ Super Fund. Why this was not the number one News item for the week on TVNZ I do not know.

[Nitaa]

Toddy. Quite crazy eh. Why didnt Tower employ Mcdunk?

[Crypto Crude]

Nita-Toddy. Quite crazy eh. Why didnt Tower employ Mcdunk?


MD is unemployable, he would get ousted straight away if they found out his antics and what he gets up to on the NZO thread...
:D
.^sc

[tim23]

Gee - Duncan still got it real bad old timer?

PS Can you give us tonights winning lotto numbers, should be easy for this sites biggest bore!

[Kropotkin]

No need for that tim23 - show a little respect mate.
No-one likes a smart mouth.

Macca is a self confessed cantankerous old bugger (no offense MD :)) and certainly entitled to his views about NZO management (particularly the old guard).

It will be interesting to see how the SP hold around 110cps. With a reserve upgrade like that, I'm seriously considering coming back in on the heads to recover some of the dump on my ops.

Mid term, the whole balance sheet for NZ has dramatically changed.
The market should be popping champagne corks.

As well as the reasons already mentioned, maybe the truth is that NZ is a naturally conservative/pessimistic market?
Maybe the market doesn't know HOW to react to good news?

Remember that the vast proportion of Kiwis think only consider deposits and housing stock as worthy investment material - an ideology been drummed into us for generations and supported by the state (nowadays only benefitting aussie banks!).

For every good news market story there will be 10 horror tales of '87.
I might just be as simple as that.

[Balance]

Valuation as per :

Tui $131m
PRC 60m
Kupe 45m (more funding required yet - like PRC)
Total 236m

There's 256m shares on issue so NAV = 92 cents per share.

Now you know why the institutions are not buying.

--------------------------------------------------------------------------------------

NZO has gone up 11 cents or $28m since the 30% Tui upgrade. I think the valuation above is wrong - Tui should be valued at $93m instead of the $131m above.

The maths are as follows :

Tui before upgrade - $93m.
30% upgrade - $28m
New valuation - $121m

Looks like the market has either already valued in a bigger field/reserve or was too optimistic before the upgrade.

There - you have it.

Now you know why the institutions are not buying NZO.

[bk]

Valuation as per :

Tui $131m
PRC 60m
Kupe 45m (more funding required yet - like PRC)
Total 236m

There's 256m shares on issue so NAV = 92 cents per share.

Now you know why the institutions are not buying.

--------------------------------------------------------------------------------------

NZO has gone up 11 cents or $28m since the 30% Tui upgrade. I think the valuation above is wrong - Tui should be valued at $93m instead of the $131m above.

The maths are as follows :

Tui before upgrade - $93m.
30% upgrade - $28m
New valuation - $121m

Looks like the market has either already valued in a bigger field/reserve or was too optimistic before the upgrade.

There - you have it.

Now you know why the institutions are not buying NZO.

I won't argue about the valuation of Tui, $131m or $93m

but the 30% upgrade does not simply add 30% to this value, but a lot more as the costs are far lower.

Consider this:
160 million barrels of oil at $130NZD minus $20MZD production cost divided by 256m shares gives 68 cents per share, not the 10-11 cents you quote. I know, the 68 needs to be discounted by various factors (like oil being higher in the future!!), but not by that much

[Toddy]

The newspaper article yesterday in the Dominion suggested that the operational costs to extract the extra oil is around $15 pb.

Balance, you are probably right though, the NZ fundies would have spent alot of time on their models and gone x 30%.

[Unicorn]

Valuation as per :

Tui $131m
PRC 60m
Kupe 45m (more funding required yet - like PRC)
Total 236m

There's 256m shares on issue so NAV = 92 cents per share.

Now you know why the institutions are not buying.

--------------------------------------------------------------------------------------

NZO has gone up 11 cents or $28m since the 30% Tui upgrade. I think the valuation above is wrong - Tui should be valued at $93m instead of the $131m above.

The maths are as follows :

Tui before upgrade - $93m.
30% upgrade - $28m
New valuation - $121m

Looks like the market has either already valued in a bigger field/reserve or was too optimistic before the upgrade.

There - you have it.

Now you know why the institutions are not buying NZO.

Such blatant ramping cannot go unchallenged. NZO fell by two cents on Friday, so the real gain from the increased Tui reserves once the euphoria had died away was nine cents. And as BK points out 30% increase in reserves means more than 30% increase in value to the company, given the major (FPSO) costs are fixed. So the 30% increase in reserves is more like 35% in value.

So to correct your mathematics ...
35% = 0.09 * 256M = $23M.
Tui before upgrade $66M
Tui now = $89M.

[fish]

Valuations by their very nature are subjective and particularly with oilers will have too many variables enabling debate ad infinitum.
Unicorn is the very best in doing valuations as I know from his input into TTP .
Balance is on a mission
Tui is producing close to 50,000 barrels a day at $130 nz a barrel =$6.5 million a day !-or $812500 a day for NZO .Gross earnings currently well over $200 million a year-around a dollar a share /year .Expenses are much less than I expected . Tax Credits make the whole scenario unresistable .
I just love buying NZO with a Current P/E ratio which must be around 2 to 1 .

[fish]

sorry-that should have said gross earnings are currently around a $1 a share per annum -or have I made a major error in my calculations ?.

[Unicorn]

sorry-that should have said gross earnings are currently around a $1 a share per annum -or have I made a major error in my calculations ?.

Some errors there Fish.

1. Forget the 50,000 barrels per day (2.3M barrels a year) - we missed a month (July 2007) and production should tail off during the year. We have an updated estimate of 1.4M barrels for NZO to 30 June 2008, anything over that should be seen as a bonus.

2. Don't forget the production costs, about $10M p.a. for the FPSO (which corresponds to the $15 odd per barrel costs over the project lifetime that were recently quoted).

3. Royalties are the significant cost - allow 20%.

4. Early production was at somewhat less that $130NZ, and the call options limit a month or so of production to about $113NZ.

My current estimate is 1.4M barrels at $85US at an exchange rate of 76c. So 1.4 * 85 / .76 = $156M - 10M = $146M * 0.8 = $116M (45 cps) less some Head Office overhead and tax (but there are plenty of tax losses to offset).

The 3 key parameters will inevitably change over time (production rate, price of oil, and exchange rate) so this valuation will almost inevitably be proved wrong. But the longer the price stays above $85, and production stays near 50,000 barrels a day the better it looks.

$116M profit this year alone is rather at odds with the "Balance" value calculation of a total project value of $89M. Choose which you feel is the more realistic.

Note that the NZO should only be expected to report about 90% of this as profit, because June 2008 production will not be counted in this year's income (timing difference between production and payment from refiners). And do not overlook the project capital cost - $40M NZ odd to be paid back.

[Nitaa]

$116M profit this year alone is rather at odds with the "Balance" value calculation of a total project value of $89M. Choose which you feel is the more realistic.

seems weird. The words 'BALANCE" and "ODD" conflict some what. Anyway, they say opposites attract.

[zorba]

Some errors there Fish.

1. Forget the 50,000 barrels per day (2.3M barrels a year) - we missed a month (July 2007) and production should tail off during the year. We have an updated estimate of 1.4M barrels for NZO to 30 June 2008, anything over that should be seen as a bonus.

2. Don't forget the production costs, about $10M p.a. for the FPSO (which corresponds to the $15 odd per barrel costs over the project lifetime that were recently quoted).

3. Royalties are the significant cost - allow 20%.

4. Early production was at somewhat less that $130NZ, and the call options limit a month or so of production to about $113NZ.

My current estimate is 1.4M barrels at $85US at an exchange rate of 76c. So 1.4 * 85 / .76 = $156M - 10M = $146M * 0.8 = $116M (45 cps) less some Head Office overhead and tax (but there are plenty of tax losses to offset).

The 3 key parameters will inevitably change over time (production rate, price of oil, and exchange rate) so this valuation will almost inevitably be proved wrong. But the longer the price stays above $85, and production stays near 50,000 barrels a day the better it looks.

$116M profit this year alone is rather at odds with the "Balance" value calculation of a total project value of $89M. Choose which you feel is the more realistic.

Note that the NZO should only be expected to report about 90% of this as profit, because June 2008 production will not be counted in this year's income (timing difference between production and payment from refiners). And do not overlook the project capital cost - $40M NZ odd to be paid back.


Unicorn,

So then according to your mo.del, NZOG will book tax and royalty paid earnings in the 07 - 08 financial year of approx 45 cents per share ......

On this basis and given the present share price of approx 110 cents .....

Then presumably we are currently, at todays share price, looking at a forward P/E ratio = 2.4

Compared to average P/E ratios above 8 - 10 or more for the NZX and ASX .....

Can this last ??
.

[Dr_Who]

I actually love the fact that the sp is not going up. Good opportunity to buy more shares. Abit like PRC when the sp was at 85 cents. The Dr just love it!

[digger]

My current estimate is 1.4M barrels at $85US at an exchange rate of 76c. So 1.4 * 85 / .76 = $156M - 10M = $146M * 0.8 = $116M (45 cps) less some Head Office overhead and tax (but there are plenty of tax losses to offset).

The 3 key parameters will inevitably change over time (production rate, price of oil, and exchange rate) so this valuation will almost inevitably be proved wrong. But the longer the price stays above $85, and production stays near 50,000 barrels a day the better it looks.

$116M profit this year alone is rather at odds with the "Balance" value calculation of a total project value of $89M. Choose which you feel is the more realistic.

Note that the NZO should only be expected to report about 90% of this as profit, because June 2008 production will not be counted End Unicorn qoute.

Interesting but remember the company says about 100 million. This can easily be got from your figures. You have 11 months production to 30 june. Remember to also substract another 1.5 months for delayed payments to come through. So this year profits to end june 08 will be payments for 9.5 months or about 100 million.The first full year of payments will come at end of june 09.
I also think the market has failed to mark in that the additional 30% will largely remove the drop off in production in the second year. In fact i am going to email DS and let you know how the thinking will go with expected drop in the second year,if any.

[fish]

Digger
Can you ask DS if Tui oil is currently being sold at the Tapis price-as shareholders we should have a right to know .
Many thanks
Fish
ps Tapis is touching us $100

[Nitaa]

my view is that Tapis is a good guide to calucalte the price. Ininitals sales would be of a discount to that price as refineries understand the qualities better. In short Tapis is a good guide.

[digger]

Digger
Can you ask DS if Tui oil is currently being sold at the Tapis price-as shareholders we should have a right to know .
Many thanks
Fish
ps Tapis is touching us $100

fish that was already stated at the AMG as the case.

[fish]

digger
I was looking for confirmation that with a Tapis price of currently us $100 a barrel approx and with todays exchange rate that nzo is selling its share of oil at $130 a barrel.If we were also told that Tui is producing 50000 barrels a day-nzo share would be 6250 barrels therefore nzo could be receiving $812500 a day gross less expenses and royalties.
I just think there is too much speculation and not enough hard facts .
A knowledge of the cash flow of a company is extremely important for investors.
I have been buying more nzo and base my own guess-estimates of the value of the shares on the likely future earnings and in doing so believe that the current oil price is the best predictor of the average oil price nzo will receive over the production life of tui. I would certainly be buying more NZO if the gross earnings were currently as the above estimate.
Thanks for your input .
I know you have a significant shareholding and the company may consider your views so hope you will consider asking ds for the last sale price of Tui Oil.

[Unicorn]

Fish

The CEO said the following at the AGM ..
"It is a high quality sweet, light crude and is being sold against the Tapis benchmark crude oil price, adjusted for quality differences and freight costs. I know there is quite a bit of interest in the prices being received for Tui oil. However, the revenues accrued to date are commercially sensitive. This is a new crude and the refineries are trying it out.
This is a competitive market and to reveal the revenues at this time would allow each refinery to work out whether their price is high or low relative to the other refineries. That would not be in our commercial interest. "

I think we need to accept that reasoning. We are in volatile times, and the price is changing constantly - knowing an accurate price for some sales is therefore not that useful when it comes to forecasting annual revenues.

[duncan macgregor]

If i intended to be a long term stick it under the bed style of investor like some of you here i would ask myself the following questions.
1, What is the company direction, is it intending to pay divedends and if so what percentage of the profit do they intend paying?.
2, What percentage of profit do they intend to use for future exploration. All or nothing just content to sit on their laurels.
3, Why do they make no effort to raise the share price to at least the conversion level, is it because they dont care if the options are converted or not.
4, What happened to that SHEALLAH that was supposed to keep you all informed is she on pregnant leave?.
The future of the profitability of your share holdings has very little to do with the price of oil at this time, but everything to do with what direction the company takes. The company is now in a good position to go forward the only remaining question is do you trust them with your hard earned dollar. My position is quite clear i never trust people or companies that open disclosure appears to be a problem. Macdunk

[Chippie]

http://www.theaustralian.news.com.au/story/0,25197,22803304-5005200,00.html

Here is an article from The Australian. It includes some encouraging comments on NZO from Stephen Wright, adviser at ASB Securities

[Crypto Crude]

duncan macgregor - If i intended to be a long term stick it under the bed style of investor like some of you here i would ask myself the following questions.
1, What is the company direction, is it intending to pay divedends and if so what percentage of the profit do they intend paying?.
2, What percentage of profit do they intend to use for future exploration. All or nothing just content to sit on their laurels.
3, Why do they make no effort to raise the share price to at least the conversion level, is it because they dont care if the options are converted or not.
4, What happened to that SHEALLAH that was supposed to keep you all informed is she on pregnant leave?.
The future of the profitability of your share holdings has very little to do with the price of oil at this time, but everything to do with what direction the company takes. The company is now in a good position to go forward the only remaining question is do you trust them with your hard earned dollar. My position is quite clear i never trust people or companies that open disclosure appears to be a problem. Macdunk

Mackdadunk,
1...in the oil industry capital gains far outweigh dividends... dividends do not matter... MVa=MVb.... its the same thing mate... dividends change nothing...

2...before you start getting carried away and looking too far down the tunnel MD, NZO styled investment is all about the re-rate of the three key projects at this stage... When the three projects are up and running then it is time to address your position with the company as the re-rate of NZO with the 3 projects outweighs what future expenditure requirements will be....One thing is sure is that this is an oil exploration company, and I hope they will be exploring...

3... you go on and on about the options MD....probably more often than not options dont get unexercised?... NZO doesnot need the dilution, and I dont see the point of have super large # of shares with 3 projects at this stage...
Options create a different vehicle of investment... issuing options, warrants convertible notes, bonds is what companies do to try and diversify the shareholders investment vehicle...Some companies donot intend on converting the options, but issue to offer something for free as a carrot...
NZO had a shot with the 3 wildcats which could have sailed this company past $2...
Played right Options can be real profitable... I proved that to you twice.. got gun shy 1st time around after they rose 50%...and gun shy 2nd time around when they rose over 200%... but did pull trigger 2nd time...
holding all the way wasnot advice I was giving, but to trade them...
You need to get over the options, they are risky and thats why they are priced accordingly...

4... If you do the study, and follow the threads then there shouldnot be any reason to need 'a pregnant lady'.... If all companies were conservitive then there would be no problem... look at how conservative TUI JV was... two oil reserve upgrades with the 2nd one being a mammoth 30% increase....
Pike reserves have the skope for being 50% higher...
Kupe has plenty of capacity for increases...
MD, Sometimes it can be hard to trust someone you dont personally know... full open disclosure doesnot always mean that they are telling you the truth...Its easy to trust a company when the SP is rising like yours...
When I was raging bull on OD's disclosure didnot deter me from making a buck... There is no such thing as a perfect company, and often there are somethings that you have to brush aside when you are investing if everything else stacks up... which they did, and do...... One thing for sure is that NZO is a sure bet... Time is an issue and one cannot be sure when this one will turn big... Pike Production should sort everything out... NZO was the 2nd biggest riser on the NZX last week...
...
How can a company like this be such a screaming buy and not perform?
it was a shock to see the piddley rise during the week in comparison to the monster that was announced...
luck to yah MD...
good day...
:cool:
.^sc-confused and wanting a couple of hundred million...:D....

[Mick100]

"Let the good times roll"

I hope everyone is in position for the next run up
I doubt whether NZO will be selling at around $1.10 for much longer
Probably the best buy on the NZX at the moment IMO :)
.

[upside_umop]

It all depends on the foreign markets imo..
Though, given this, many analysts are saying 'make sure you have oil/energy in that portfolio..'
It is a guaranteed performer over next few years at these prices isnt it?
Also good to see in that article provided by chippie that an asb anaylst is warming and sees the potential. It could still yet be understated for a while, but like many have said its such a great buy, one of the best on the nzx, and its just a matter of time before that translates into the sp.

[bermuda]

MD was right, The upwards movement yesterday gave those the opportunity to sell out on a spike and now there are those that are selling off in the fall... OD's are back down....
future oil revenues are now expected to be $200million dollars higher...
what does mister market not understand about this?
If market wont move on such a monsterous ann like the one yesterday,
then what will it move on?
Can anyone lend me a couple of hundred million bucks so I can buy out this puppy...
:D
.^sc

Shrewdy,
Do you want to join me a few of my mates. We'll do the bankrolling ....you just look after the books. I mean you are nearly qualified...Dont worry we will arrange a few options for you.They are a real pest these options especially when a takeover is planned.

[shasta]

Shrewdy,
Do you want to join me a few of my mates. We'll do the bankrolling ....you just look after the books. I mean you are nearly qualified...Dont worry we will arrange a few options for you.They are a real pest these options especially when a takeover is planned.

Shrewd would be better suited in a PR role, with more spin than Warnie!:D

Earlier this year i missed out on an Accounting/Finance role with NZO due to not having listed company experience :mad:

Wouldn't have minded being another snout in the trough with the ESOP!

[Crypto Crude]

count me in bermuda, Im there...
:cool:
.^sc

[bermuda]

count me in bermuda, Im there...
:cool:
.^sc

Ok Shrewdy,
good to have you on Board.
I will let you work out whether we should engage Shasta as a consultant.

[Crypto Crude]

shasta will get paid with shares not wages...
:D
.^sc

[Crypto Crude]

15 shares an hour... thats effectively forward looking $30 an hour...
:D
.^sc

[dsurf]

[QUOTE=Balance;174347]Valuation as per :

Tui $131m
PRC 60m
Kupe 45m (more funding required yet - like PRC)
Total 236m

There's 256m shares on issue so NAV = 92 cents per share.

Now you know why the institutions are not buying.

--------------------------------------------------------------------------------------
Balance - NAV is a cr@p way to value NZO - It is a growth stock - ie revenue & profit going up by 3/4/5 x 100%.

Lets compare NZO with "growth stocks the insto's like"

FPH - NTA 40c - SP $3.16 - mkt cap 1,600m - profit 67m
FPA - NTA 112c - SP $3.49 - mkt cap 993m - profit 60m
RAK - NTA 70c - SP $4.28 - mkt cap 548m - profit 30?m

vs

NZO - NTA 92c (you say) - SP $1.10 - mkt cap 400m ish - profit 70?m

So what would you rather own & which stock has earnings & profits increasing at the fastest rate?????????? Or do you think NZO is the only stock that should be valued at NAV in the world?????

[arjay]

I actually love the fact that the sp is not going up. Good opportunity to buy more shares. Abit like PRC when the sp was at 85 cents. The Dr just love it!

You're correct Dr Who, this company is very undervalued by the market. As I have said before, this is likely to be influenced by potential investors looking at this stock and not seeing any near-term returns for their investment dollar. Bermuda reckons my opinion an example of 'tall-poppy' syndrome. I can't quite see where he's coming from though - I reckon most investors are not particularly altruistic and need more than just the feel-good factor of being part of a successful exploration and production company. Once NZO start rewarding their shareholders you will see this stock rocket.

[Dr_Who]

[QUOTE=Balance;174347]Valuation as per :

Tui $131m
PRC 60m
Kupe 45m (more funding required yet - like PRC)
Total 236m

There's 256m shares on issue so NAV = 92 cents per share.

Now you know why the institutions are not buying.

--------------------------------------------------------------------------------------
Balance - NAV is a cr@p way to value NZO - It is a growth stock - ie revenue & profit going up by 3/4/5 x 100%.

Lets compare NZO with "growth stocks the insto's like"

FPH - NTA 40c - SP $3.16 - mkt cap 1,600m - profit 67m
FPA - NTA 112c - SP $3.49 - mkt cap 993m - profit 60m
RAK - NTA 70c - SP $4.28 - mkt cap 548m - profit 30?m

vs

NZO - NTA 92c (you say) - SP $1.10 - mkt cap 400m ish - profit 70?m

So what would you rather own & which stock has earnings & profits increasing at the fastest rate?????????? Or do you think NZO is the only stock that should be valued at NAV in the world?????


Institutions are usually a pack of sheep. Most only buy stocks that have dividends. Hence their performance marginally track the index. Do the opposite of what the institutions do and you are certain to make money. With NZO, I think more likely the brokers and institutions dont trust the people at the top to take care of shareholders, as pointed out by McDunk. That old man does make a point.

[Balance]

[QUOTE=Balance;174347]Valuation as per :

Tui $131m
PRC 60m
Kupe 45m (more funding required yet - like PRC)
Total 236m

There's 256m shares on issue so NAV = 92 cents per share.

Now you know why the institutions are not buying.

--------------------------------------------------------------------------------------
Balance - NAV is a cr@p way to value NZO - It is a growth stock - ie revenue & profit going up by 3/4/5 x 100%.

Lets compare NZO with "growth stocks the insto's like"

FPH - NTA 40c - SP $3.16 - mkt cap 1,600m - profit 67m
FPA - NTA 112c - SP $3.49 - mkt cap 993m - profit 60m
RAK - NTA 70c - SP $4.28 - mkt cap 548m - profit 30?m

vs

NZO - NTA 92c (you say) - SP $1.10 - mkt cap 400m ish - profit 70?m

So what would you rather own & which stock has earnings & profits increasing at the fastest rate?????????? Or do you think NZO is the only stock that should be valued at NAV in the world?????


Tui, PRC and Kupe were valued first on their cashflow/NPV. Then their collective value is added up and dividend by number of NZO shares to get NAV per share. That's how one would value NZO - sum of parts. Miners are generally valued on their NPV as their mine lives are finite.

[manxman]

Tui, PRC and Kupe were valued first on their cashflow/NPV. Then their collective value is added up and dividend by number of NZO shares to get NAV per share. That's how one would value NZO - sum of parts. Miners are generally valued on their NPV as their mine lives are finite.

Agreed Balance, but with McD/S predicting that NZO's tax losses will be completely used up, that implies a profit before tax exceeding $140million this financial year. Next year, a lower cash flow and no tax losses left, and so on for 8/9/10 years, but if the first year is $140million the NPV of the 10 year profit stream must be way in excess of $92 million surely.

Mx

[Balance]

Agreed Balance, but with McD/S predicting that NZO's tax losses will be completely used up, that implies a profit before tax exceeding $140million this financial year. Next year, a lower cash flow and no tax losses left, and so on for 8/9/10 years, but if the first year is $140million the NPV of the 10 year profit stream must be way in excess of $92 million surely.

Mx

Same McD/S which predicted that PRC would be worth $120m for NZO?

[bermuda]

Same McD/S which predicted that PRC would be worth $120m for NZO?

Balance,
PRC will be worth about 6-8 $million per annum ( net ) in 2008/9 to NZO and at least $120 million when they sell out in Year 3. Nice eh?

[Balance]

Balance,
PRC will be worth about 6-8 $million per annum ( net ) in 2008/9 to NZO and at least $120 million when they sell out in Year 3. Nice eh?


Yes .. LOL ... just as PRC was going to list at a huge premium and NZOers loaded up with NZO shares to get the entitlement a few years ago.

It was so preferential that anyone could get as much as they wanted!

[bermuda]

Balance,
PRC will be worth about 6-8 $million per annum ( net ) in 2008/9 to NZO and at least $120 million when they sell out in Year 3. Nice eh?

Balance,

I hold LMPOA, NZO and PRC in NZ and

BAS, BOW, PES, TEX, VPE, VPEO in Aussie.

What do you hold?......or are you a day trader?

[digger]

Balance why is it that you never answered my comment about investing in finance companies. A lot of investers lost real money there while you have just hung around NZO where investers have not yet made much money.Every day another half million rolls into NZO and money is being still lost with the finance area. Surely your advise would be of some value there. Can you point to me where in the last year you have forwarned investers to avoid finance companies. You sure have warned off investers from NZO Your advise does not stack up. It is unbalanced.

[zorba]

Oil price looking suspecious .....

If US crude inventories are down on Thursday then maybe US$100 for Nymex.

Maybe sooner . . . and Tapis no doubt back over US$100 !!

http://data.tradingcharts.com/intraday_charts/charts/31e1767076c61f855d434404e64ae20b.png?
.

[Nitaa]

Digger. Dont expect Balance to give you an answer to your latest question. from what i have seen, when Balance is put to the test he just remains silent. The only time he speaks is when he takes pop shots without anything really concrete.

I actually find it quite amusing whatching the likes of DM and Balance put up a post. I am convinced itds because they have been burnt by this stock in the past. In all honesty i would probably be like them if the same thing happened to me but it didnt and it cant. Why? Because all my shares an options in NZO are paid for in the pfits that i have made in this stock.

Its sort of like revenge of the nerds or something. Simply, no matter if the stock climbs to $2, $3 or $10 in the next couple of years, these guys will still talk the same sort of tune.

Well done to the ones who have stuck by this stock, although there are issues with management etc, you still could do a lot worse.

[duncan macgregor]

NITA, You are gushing about a stock that has gone no where in the last three years, other than two short spike ups. The share price today is exactly where it was three years ago with no dividends to boost your investment. People were gushing about the options at 30c when balance and i said they were worth nothing they are now 8c. In jan 2005 the sp was $1-25 with you still gushing on about how clever you are holding on and its the market that has it wrong. The market has told you how wrong it was to hold NZO long term over the last three years in a bull market yet you still persist in condemning the people that say otherwise. It is the market you must pay attention to, take the blinkers off, get back to reality. The company treats you with the contempt that you deserve i hope your faith in it will be justified, but i some how doubt it. Macdunk

[BigBob]

The market has told you how wrong it was to hold NZO long term over the last three years in a bull market yet you still persist in condemning the people that say otherwise. It is the market you must pay attention to, take the blinkers off, get back to reality. The company treats you with the contempt that you deserve i hope your faith in it will be justified, but i some how doubt it. Macdunk

McD, I don't think you're wrong when saying that holding NZO over the last three years has been a bad call - and I don't think anyone actually condemns you for saying so.... What they condemn you for is the fact that you go on and f$#cking on about it... Why don't you just leave it alone....? Find a thread about a stock you are positive about and bugg#r off there for a while perhaps....

[clips]

i don't really give a hoot about what has happened over the last 3 years, i'm a lot more
interested in what may happen over the next 3 years,,,,,

[BRICKS]

MR full time trader Macduck they love you here as well your got so many friends they keep telling you to LEAVE...

[Wilkins_Micawber]

McD, I don't think you're wrong when saying that holding NZO over the last three years has been a bad call - and I don't think anyone actually condemns you for saying so.... What they condemn you for is the fact that you go on and f$#cking on about it... Why don't you just leave it alone....? Find a thread about a stock you are positive about and bugg#r off there for a while perhaps....

HERE HERE !!! Stuck record comes to mind - what may be valid info or comments becomes repititious inane dribble when repeated often enough.

[Nitaa]

laughing heaps here md. you have been burnt havent you?

no md, i am gushing about what nzo has done when i brought in 4 and a half years ago actually. That was in the low 30's. that equates to around 300% on the heads. even more if you picked the bottom.

the point is md... start talking about something new...i dont care how much you lost on nzo. i only care on how much i make. if you read my posts carefully i have criticsed this stock in certain aspects. I also praise this stock in certainareas as well. I call it as i see it. no more no less.

i still maintain, this stock is a no brainer at present. I said that at $1 or lower the other day as well. but i am not going on about every other post.

md...i think nzo is like your first and only love...it has burnt you and now its time to let it go.. just let it go. sort of like that vogel bread add aye.

sorry mate, nothing personal but it is time to move on.. good luck with your investment.

[Lion]

HERE HERE !!! Stuck record comes to mind - what may be valid info or comments becomes repititious inane dribble when repeated often enough.

Like signatures you mean?

[trackers]

quite impressed with the latest announcement...

shows record production, production to date, shipped to date... Contribution to trade figures and gdp....Pretty adequate information really, none of which was 'really' required.. good stuff nzo.

disc: recently sold, will buy back at $1 :)

[boysy]

At some point people will have to question the current shareprice the thing holding back the sp is market sentiment and peoples previous experiences with NZO. Though at some stage what happens in the past has little bearing on what will hapen in the future especially if there is a management shakeup. Clearly what has happened in the past is relevant but how long will the past haunt NZO especially with projected income flows that will be the interesting question

[poacher]

I can't help wondering why MCDUNK needs to keep harping on about NZO. If he doesn't hold any shares, why should he care what happens. One senses a paranoia that NZO will do well and a need to convince himself on a daily basis that it is best not to own any NZO shares.Do you think that his keyboard completes the phrase for him when he starts typing pass the parcel...
On another note, how do they know that the Tui field produces a sweet crude - did someone taste it; is there a sour crude? If you mix the 2, do you get sweet and sour crude or a neutral?

[Lion]

how do they know that the Tui field produces a sweet crude - did someone taste it; is there a sour crude? If you mix the 2, do you get sweet and sour crude or a neutral?

Poacher, sweet crude means it's low in sulphur, cheaper to refine, and/or more output per barrel used.

Nice bit of PR from the company today, just what we've been asking for. And the share price continues to fall!?!? It's just crazy.

Time to start that buyout maybe, bermuda?

Or why doesn't the Co. buy shares back? Seems like a great idea to me.

[Mick100]

On another note, how do they know that the Tui field produces a sweet crude - did someone taste it; is there a sour crude? If you mix the 2, do you get sweet and sour crude or a neutral?

Yes, there is also a sour crude
Sour crude has a high sulpher content while sweet has a low sulpher content
Sweet crude is more easily refined and produces more high value product such as gasoline per barrel compared to sour crude.
Most of the refineries around the world can not even refine sour crude - this is why there is a difference in value between sweet and sour crudes - refining costs are much higher for sour crude
,

[Wilkins_Micawber]

Poacher, sweet crude means it's low in sulphur, cheaper to refine, and/or more output per barrel used.

Nice bit of PR from the company today, just what we've been asking for. And the share price continues to fall!?!? It's just crazy.

Time to start that buyout maybe, bermuda?

Or why doesn't the Co. buy shares back? Seems like a great idea to me.

I like the idea of a share buyback. At a very simplistic level, if NZO bought back half of the shares, pushing the share price over $1.50 in the process due to demand and reduced dilution of the company, thereby ensuring that the options are converted and getting $1.50 back for each option. Should keep both the option holders and the shareholders happy, reduces or prevents net dilution from option conversion, and NZO are no worse off (so long as the average buyback price is not > $1.50).

Of course, if NZO have some other plan to get the options converted (which appears is being kept to themselves if they do) ....

[Dr_Who]

Those that sold out at $1.10 hoping to buy back at $1 may be disappointed. I have a feeling the shares will head north from here. Interesting how there are institution action happening in PRC and not in NZO.

[Nitaa]

REL: 1155 HRS New Zealand Oil and Gas Limited

MINE: NZO: RECORD OIL PRODUCTION FROM TUI

Production from the Tui Area Oil Project off the Taranaki coast has set new
records.

Last week oil production from the field totalled 345,117 barrels, an average
of 49,302 barrels a day. This is the highest weekly production total to date.

On 21 November a one day record of 56,467 barrels was achieved.

Since the start of production on 30 July 2007, the Tui Area Oil Project has
produced approximately 4.7 million barrels of oil. 4.5 million barrels has
been shipped, mainly to refineries on the east coast of Australia. The next
shipment is due in early December.

These exports have contributed to record New Zealand trade figures for
August, September and October. Economists are predicting that Tui production
will add 0.3 percent to New Zealand's GDP in the September quarter.

Proved and probable (2P) reserves in the Tui Area Oil Fields have been
upgraded by the operator to 41.7 million barrels, almost 50% higher than the
estimated reserves of 27.9 million barrels on which the project was
sanctioned.

Estimated production for the 2007/08 year has been increased from 10 to at
least 11 million barrels.

New Zealand Oil and Gas Ltd (NZOG) has a 12.5% share of the Tui Area Oil
Project.

[airedale]

PRC strengthens on good volume, yet the SP of the majority shareholder NZO is written down, or barely moves.:confused:

[Dr_Who]

I may top up some more shares this week. :) I dont want to be left out of the party when the dancing girls get on stage.

[duncan macgregor]

I like the idea of a share buyback. At a very simplistic level, if NZO bought back half of the shares, pushing the share price over $1.50 in the process due to demand and reduced dilution of the company, thereby ensuring that the options are converted and getting $1.50 back for each option. Should keep both the option holders and the shareholders happy, reduces or prevents net dilution from option conversion, and NZO are no worse off (so long as the average buyback price is not > $1.50).

Of course, if NZO have some other plan to get the options converted (which appears is being kept to themselves if they do) .... That would be an interesting excercize if they did buy back then cancel the shares bought to raise the share price. Get rid of the profit to make the options worth converting and end up where they started with a few happy punters. That would be a very good outcome for the shareholders if they did. Somehow i think they just dont care. i cant see to many ways other than that, given the time frame even with the massive profits rolling in to do just that. If they announced a buy back i would buy in my good self at the drop of a hat and join the blue eyed brigade for a short trip. The idea is never close your mind to reality everything is subject to change the only question is will they look after the shareholders, or not?. Macdunk

[temuk]

Here's my post from 15-11-07


dunk---

I spend hours reading this thread and I get pissed off when you think I've got alzheimers!
Please give the dog a bone.

thanks for the backup guys - much apprecited

[Nitaa]

md.. good on you me laddie. i sense a change of heart. if you cant beat then join em aye.

In the past you said you would never buy back into this stock because of management and no matter what the sp is. so now you will buy at the drop of a hat if they announce a buy back. nothing wrong with changing your mind. whether its a good investment is another matter.

no hard feelings and im sorry if i am a little rough on you but i have to say that you keep asking for it.

I praise you on your last coment that one should never close their mind and everything is subject to change. Keep that philosophy and it will put you in good stead.

Good little finish today and good to see it being on increased volume. It bodes well short term.

[Dr_Who]

Nita, I still believe that the chairman has alot to do with where the sp is today. I only have a small holding in NZO, but would otherwise have substantially more if the chairman was to announce his resignation. I topped up some more shares today, cos I believe NZO is very much under valued. I am a valued investor and buy companies that I believe is undervalue to is valuation and holds for med/long term. I didnt buy NZO cos I believe there is a possibility of a share buyback.

[Wilkins_Micawber]

I like the idea of a share buyback. At a very simplistic level, if NZO bought back half of the shares, pushing the share price over $1.50 in the process due to demand and reduced dilution of the company, thereby ensuring that the options are converted and getting $1.50 back for each option. Should keep both the option holders and the shareholders happy, reduces or prevents net dilution from option conversion, and NZO are no worse off (so long as the average buyback price is not > $1.50).

Of course, if NZO have some other plan to get the options converted (which appears is being kept to themselves if they do) ....

A further thought - if there was a share buyback and the price took off as a result of the volume being bought back (which it probably would), providing NZO didn't exceed the HIGHER of $1.50 avg price on buyback OR say $180 million in total they would be on to a winner as there would presumably then be something like 130 million options converted at $1.50 each (= $195 million income for NZO). EG. if the avg buyback price exceeded $1.50 each but they still bought back say 1/3 of the shares at an avg of say $2.06 each (roughly, 261 millions shares / 3 = 87 million bought back at $2.06 = $180 million) then get $195 million back from option conversion. Good way to spend the income they are getting now, and still have the money come back in the middle of next year.

In actual fact, it works out that the less shares they buyback the more can be spent per share on average (up to the $180 million total) eg. buyback 1/4 of the shares (65 million) at an avg not exceeding $2.76. And for the average buyback price to be say $2 then (if they started now, at $1.10) the NZO heads would probably be say $2.50 or more at completion of the buyback, and everyone would be very happy I should think (me included :)). Options could then be trading for $1 each !

So it seems to me that (if I am correct) they can't loose, unless they already have something else up their sleeves which will ensure the conversion of the options without having to spend money on the share buyback. With this in mind as what I think might be a good backstop nearer to option expiry date, perhaps NZO have a sure way of ensuring conversion of the options (since they must have some cash to play with soon?), so maybe pass the parcel time hasn't arrived yet ????....

[neopole]

if TR retired from the board tomorrow, and had nothing to do with the company except for his huge shareholding in the company..... not only will the share price accelerate north, but TR's wealth also........... good for him......., isnt this the best course for a company owned by shareholders?
by the way...... does anyone know how old TR is?
i wonder if TR's ego is bigger than his.......... DOH........ our company..............

but then again, TR knows more about our company than anyone else...... he did create it, albiet with shareholders money, so maybe he has a master plan to make the shareholders wealthy, so, we might think that he could share the plan with the shareholders that financed his dream............
ditto with PPP......
i wonder if GPG is still looking at the depressed share price.
i wonder if GPG is depressing the shareprice.........
i wonder if there is a game being played between RB and TR?

maybe im wondering too much, but i do know the sp of NZO should not be where it is, and TR seems rather aloof to it all.

[Nitaa]

Nita, I still believe that the chairman has alot to do with where the sp is today. I only have a small holding in NZO, but would otherwise have substantially more if the chairman was to announce his resignation. I topped up some more shares today, cos I believe NZO is very much under valued. I am a valued investor and buy companies that I believe is undervalue to is valuation and holds for med/long term. I didnt buy NZO cos I believe there is a possibility of a share buyback.I totally agree with everything you say. I would even add that he is more concerned about the possible threat of a takeover rather than look at building shareholders wealth. i.e. i also in the view that alnog with many others including md is that he has put his own interest first. there comes a point where ones sole priority is to maintain control above anything else. I think nzo is a classic example of that.

On a more positive note, yes nzo has been transformed. we all know there are going to be cost overuns, more prc funding yadi ya. its par for the course at present. Only have to look at the eden park upgrade that has increased in costs by 50% and it hasnt even started. But what this company is doing well is laying the foundation for it to grow into a strong cash flow positve company. So i hope that there are no more shareplacements and that they consolidate their position.

time will tell.

[tim23]

I agree thats theres a negative perception re Tony Radford but regardless the stock should find its level based on fundamentals, remember a fews back the stock was below 40c and Radford was about then so figure that out!?

[digger]

The reserve upgrade was great news and needed. Can you shed any light on how this upgrade will effect the production in the second year. On the origional estimate of 27.8 m barrells a sharp drop off was expected causing a revenue fallaway before Kupe and Pike kick in. Do you now still expect a income fall between theses events. I believe the market factors in a fall and markets do not like revenue to resede.etc,etc.


----- Original Message -----
I sent the above message to DS and yesterday got a reply that said they were working on that projection and would be releasing a report soon after some more info is abtained from JV. Soon could be the next quartly but at least the question has been put and they know some of us are looking forward to the answer.

[Mick100]

Thanks digger

[zorba]

.
Good one Digger .....

I see 150,000 shares were traded in one "SP" hit at very end of day .... excellent !!

No doubt Insto buying on the back of the Tui upgrade plus today's PRC announcement that the coal transport route is now sown up with Solid Energy / Toll Railways agreement to rail coal to Lyttleton for up to 1.3m tonnes annually !!

Cheaper, more reliable because far less complicated, lower carbon emmisions, no millions of truck movements through Greymouth or barges getting stuck on sand bars, instead known transport system which will be upgraded to meet extra tonnage.

Go Solid Energy ..... Go Toll Rail ..... Go the Govmt for keeping Solid Energy and OnTrack up and running with new infrastructure investment.

When the time comes Solid Energy will be in an excellent position to offer top dollar for Pike !!

And Tapis chewing on US$100 per barrel again .....

http://www.aip.com.au/pricing/marketwatch.htm

I'm picking 115 - 120 cents by Xmas (provided the credit-crunch and those New York banker skollies hav'nt skrewed everything up) !!
.

[bermuda]

I agree thats theres a negative perception re Tony Radford but regardless the stock should find its level based on fundamentals, remember a fews back the stock was below 40c and Radford was about then so figure that out!?

Digger,
Have a look at some of the production forecasts. No worries mate. The revenues are going to be in excess of $100 million for years and years to come. ( in fact year one could exceed $150 million )

Relax.....this is going to be fun. Dont be swayed by others who dont really appreciate what is going on. I know its hard..gosh tonite I had dinner with a Broker who honestly had no appreciation of what's happening. Still mentioning stories of ages ago.

We will just have to wait for the fundamental financials to be published. Man, this thing really has got some grunt.

There are a lot of misguided ignorant people out there that should Know better.

[the machine]

good to see production has topped 50,000 barrels, even if only for 1 day thus far.

now they just have to keep it up for a few months leading up to the release of the half yearly report / skyrocket under the sp

M

[brucey09]

amigos
tis is where is this co sp going wrong. high oil precios, upgraded reservas, and future projects which are thought of as going to be good. the only reason can be the lack of any ideas to reward shareholders with dividends and a wishy washy statement by ceo regards future growth.

[manxman]

good to see production has topped 50,000 barrels, even if only for 1 day thus far.

now they just have to keep it up for a few months leading up to the release of the half yearly report / skyrocket under the sp

M

Is this 50,000 barrels from only three out of four wells? At least in the initial stages they had one well (Amokura?) out of action and others choked back, I think. Good to tell the market that the 50k barrels was the FPSO limit, not the most the oil field will do. Tell the market a little bit of good news each week.
Mx

[dsurf]

[QUOTE=dsurf;174513]


Tui, PRC and Kupe were valued first on their cashflow/NPV. Then their collective value is added up and dividend by number of NZO shares to get NAV per share. That's how one would value NZO - sum of parts. Miners are generally valued on their NPV as their mine lives are finite.

b*llcicks - TUI reserves have increased twice this year. PRC have a whole seam that can be developed. Kupe has more drills. The mine lives are not finite if reserves grow as has / will be the case for all 3 projects. More reserves = growth, so the SP should be above NAV to incorporate the growth.

[Nitaa]

another good day looks to be the cards for pike and nzo

[boysy]

i think we have found a pattern when NZO is doing well no sign of McDunk funny that huh perhaps he bought the 150k pacel at the end of yester day and is joining in his eyes anyway "The blue eyed brigade".

[tim23]

Boysy - you are about right with that comment; don;t worry hes like those Jason movies he'll be back when the share price has a southward movement!

[oldowl]

Coal deal sinks $18m Greymouth port revamp

http://www.stuff.co.nz/thepress/4290516a6009.html

[duncan macgregor]

i think we have found a pattern when NZO is doing well no sign of McDunk funny that huh perhaps he bought the 150k pacel at the end of yester day and is joining in his eyes anyway "The blue eyed brigade". Quite the opposite Boyse i get accused of nagging get told to go away then told when i do go away that i have some ulteria motive. My thoughts are NZO over the last three years has been a complete waste of time for long term holders. The sp is exactly where it was three years ago. Only people that made money during that period were the traders. If you bought earlier on than that you made a decent profit but then watched it stagnate for three years during a bull market. The buy and holders over the last three years have made a zilch gain. The blue eyed brigade still ramp the share but not with the same fervour. Some actually are starting to see the company in the light of day without the rose tinted glasses. The fundamentals of the company are great, the market perspective of the company is rat poop. Unless the company have a complete change of attitude, the investors will lose out over the next three years with a share price to low for what it is. The company top brass are quite happy swilling at the trough giving the investors nothing in return, unless that changes the parcel will be passed, then when the music stops will found to be empty. If they buy back and cancel shares i would jump in for a quick trade, but other than that its all yours. Macdunk

[tim23]

Boring - heard it all before

[bear]

Boring - heard it all before

It may be boring Tim but Macdunk has hit this one on the head. I sold out of this one May 2006 for a similar price to todays. Management were the reason and today are a major problem. Have not looked back. :)

If the last few events ie TUI upgrade and Tui Production and more historically the PRC float haven't bolstered the SP them im at a loss to identify what could lift it in the future.

I still believe there could be an opportunity here in the future but a this point there is no compelling reason to invest in the hope that one day we might see some appreciation in price.

Bear

[tim23]

Also boring

[Nitaa]

Bear. Its worth noting that NZO is up 16% for the year. Some might say its boring but if I can generate those numbers consistantly year after year then I am happy to be bored.

Trying to fathom why the market swings the way it does is like trying to understand why a woman has pms. I have given up a long time ago trying to be clever, playing the TA game etc. So for me to pick short term trends correctly is only about 50% of the time. So for me why bother. Another reason is if you take the last 3 years (which most of the doom sayers do) then the only ones who have lost money are the traders.

What will the market do in the next 6 months? since i am more of a fundamentalist i know the down side is small but the upside is significant. Kuoe is very exciting to me. A lot of money is being invested and a worse case scenario is that they will still make money out of it. Best case scenario with exploration potential etc? Then sky is the limit.

Watch this space

[Dr_Who]

What will the market do in the next 6 months? since i am more of a fundamentalist i know the down side is small but the upside is significant. Kupe is very exciting to me.

Watch this space

I also have the same view. I see the downside risk minimal compare to the potential huge upside. Top brass stayng in NZO is a put off for me, but eventually this pup coulc possibly be a T/O if the sp stays at these levels. This is assuming global oil and coal prices dont crash in the next year or so, I dont see this happening.

Interesting to see AWE, PPP and PRC is up and NZO have not moved much, thus making NZO look cheaper by the day.... LOL

[arjay]

The reserve upgrade was great news and needed. Can you shed any light on how this upgrade will effect the production in the second year. On the origional estimate of 27.8 m barrells a sharp drop off was expected causing a revenue fallaway before Kupe and Pike kick in. .

In a similar vein Digger, I'm wondering if, because the initial Tui calculations were overly conservative (ie, turns out there is a lot more oil there than they first calculated), then maybe the JV have also underestimated the commercial potential of the oil columns discovered at Tieke and Taranui?

[bear]

Bear. Its worth noting that NZO is up 16% for the year. Some might say its boring but if I can generate those numbers consistantly year after year then I am happy to be bored.

Trying to fathom why the market swings the way it does is like trying to understand why a woman has pms. I have given up a long time ago trying to be clever, playing the TA game etc. So for me to pick short term trends correctly is only about 50% of the time. So for me why bother. Another reason is if you take the last 3 years (which most of the doom sayers do) then the only ones who have lost money are the traders.

What will the market do in the next 6 months? since i am more of a fundamentalist i know the down side is small but the upside is significant. Kuoe is very exciting to me. A lot of money is being invested and a worse case scenario is that they will still make money out of it. Best case scenario with exploration potential etc? Then sky is the limit.

Watch this space

!6% for a year is 16% but this company has returned 0% since May 06 and negative if you include the spike to 130c a few months prior to that.

Potential is there but repeatedly the market is unimpressed. I agree that the downside is limited but if you have been going sideways for a year or two .... what gives ... appreciation in price is what we require not potential.... everything has potential it how you use it and how it is perceived that needs to be factored in

If and it is a big if ... there is a significant change in sentiment via changes to management, improved disclosure, $$$ in the bank (which is just started to occur) and clarity over PRC and any additional $$$ needed the price will continue to stay range bound.

bear

hope for holders that it doesn't remain range bound :)

[tim23]

You need to add the free options as well and the value of the rights issue @ $1 plus a free option to be fair but to me I don't trade the stock, I'm holding to capture the big prize

[Nitaa]

Its all relative. For me I brought into NZO when the heads were in the low 30's. Nearly 5 years ago i think. I brought options (oc's when they were att 11 cps). Of course since then i hace done well. No i didnt sell my heads at 130 but i sold a chunk at over $1.00 so now all holdings is free carry. so your point about it going sideways is that i dodnt care. I am only interested on what I brought them for and what I sold then at.Its worth to note that i sold a parcel of od's at a good price of 30.5 (near its peak).

The real issue here Bear, is where you hear the buy sign is near and if that is not clear then you must be in constant fear. Seriously though, you need to look at the big picture and not just a particular time frame to prove your argument. We all can do that. Every stock (maybe with the exception of Feltex and Burger Fuel) with go through trading rages, spikes, corrections or otherwise. A good stock doesnt become a dog overnight a visa versa. The tops 5 listed companies are good examples of that but all have had their fair share of the good, the bad and the ugly.

All though i have settled with what i am holding with no intention to buy or sell in the near future, I truly belive that NZO'as time has comeith. Even with some of management that needs replacing.

Good luck with your other investments Bear

[duncan macgregor]

NITA, The best buy and sell signals always come with TA. Never buy if the sp is under the 30 day moving average which is a good buy signal on downtrending shares. Always have a stop loss and time frame. Fundamental analysis is as usefull as teats on a bull as you are finding out with NZO. Its not how much profit that counts its how the market perceives the company that drives the share price. NZO should fundamentely be about $1-40 at this time and about $1-60 at conversion time. The market is telling you that it simply does not trust NZO to do the decent thing. The value of my property has increased in value according to the valuer by 60% in the last three years, your NZO shares have increased by zilch during that same period. You might have made a handsome profit for the first two years but after that you have lost big time. Market perception is all that counts thats why the share price is wallowing about. When management come out the closet with open disclosure and stop swilling at the trough you might be pleasantly surprized at the market reaction. MACDUNK

[tim23]

Boring Guru

[Nitaa]

Heres my call for the shareprice within 6 months. At least $1.30 per share. Still think oppies are a chance as well.

discl..holing with no intention to buy or sell in that period

pd. macdunk. take a peeps at the off market forum

[Paddie]

Heres my call for the shareprice within 6 months. At least $1.30 per share. Still think oppies are a chance as well.

discl..holing with no intention to buy or sell in that period

pd. macdunk. take a peeps at the off market forum


That is a bit of a nothing comment, at least a $1.30 in 6 months.

At a $1.30 the options are not going to be converted.

I would have also expected that with upgrades etc, most companies in a similar position would be experiencing a lot more than a rise to $1.30.

Paddie

[upside_umop]

Still a gain of 20/130=18.2% in 6 months.
Annualized =36.4%.
Nothing to be frowned upon.

I would be happy with that.
But yeah, I agree, I think it will be at least that with further drilling around Kupe planned around this time frame...kupe will be big, even analysts are saying that it will be big.

Bermuda, you know about Kupe and the processing plant? Whats its used capacity going to be with current flows already known?

[bermuda]

Upside down,
Kupe hasnt yet appeared on Broker's horizons. I was at a dinner yesterday with a broker who made the most desparaging remarks about NZO I was actually embarrassed as my wife was listening in.I wont go into detail but the only way to quieten him was to remind him that he said the same about Tui 3 years ago... At least I got a blush.

This has got to stop. People are getting seriously mis informed.

Kupe has been designed to take THREE times the current known reserves.

But who wants to listen?

A huge buy at these sort of prices.