NZ Oil & Gas (NZO)

[JohnPagani]

Thank you for that reply john-we should all await the booklet before making judgements
I must call you out on the first sentence because I like to know the truth. I cannot see how a NZO employee can have the same interest as any shareholder.
You are far more likely to be aligned more with the interests of the majority shareholder and that of NZO employees. In this case minority shareholders are the target as enshrined in company law and as you say are protected by the regulatory process.
The companies act has provision for the rights of minority shareholders and if appropriate we will use these provisions

However it would be preferred if co-operation to get a good outcome for all parties is used rather than conflict and the initial offer is manifestly inadequate

I see what you mean. I was referring to financial interests along the lines of bonuses etc, as that seemed to be the nature of the question. Naturally, I have an interest as an employee and your humble and obedient servant.

[JohnPagani]

I can't get into debating valuations with you, but at the theoretical level, the issue at stake is what you mean by 'worth $1,000,000'. (Do live in Auckland??) My house could be worth what someone will pay for it, what it cost me depreciated, what it will earn me in rents, or what I could sell the pieces for. All of those, for any asset, will have a different valuation. That's why the independent valuation will have a range. Naturally, if I am seller, I will walk around my house pointing out that the tiles cost me $20,000, the kitchen was $100,000, the new school is going to increase prices for land in the area, and so on. And if I'm a buyer I'm going to point out that I have to pay very high heating and rates bills and we are having trouble letting it to reliable tenants. If no one else was likely to be a buyer in the area, then as a house seller, I would expect the agent to present an offer that reflected what the valuer said. It is entirely appropriate for you to look at that valuation then and decide if you want to accept it, hold out for a better one, hope the rental market increases or advocate for a sale of the pieces - that's very much a decision for you and not one I am going to have a view on.

[mistaTea]

I can't get into debating valuations with you, but at the theoretical level, the issue at stake is what you mean by 'worth $1,000,000'. (Do live in Auckland??) My house could be worth what someone will pay for it, what it cost me depreciated, what it will earn me in rents, or what I could sell the pieces for. All of those, for any asset, will have a different valuation. That's why the independent valuation will have a range. Naturally, if I am seller, I will walk around my house pointing out that the tiles cost me $20,000, the kitchen was $100,000, the new school is going to increase prices for land in the area, and so on. And if I'm a buyer I'm going to point out that I have to pay very high heating and rates bills and we are having trouble letting it to reliable tenants. If no one else was likely to be a buyer in the area, then as a house seller, I would expect the agent to present an offer that reflected what the valuer said. It is entirely appropriate for you to look at that valuation then and decide if you want to accept it, hold out for a better one, hope the rental market increases or advocate for a sale of the pieces - that's very much a decision for you and not one I am going to have a view on.

Thank you for the timely lesson in valuations John. I wish I had come to you earlier rather than wasting my money buying all of those investing books 😜

You can pick holes in the instructive analogy, however one can objectively value the existing NZOG assets by simply looking at Book Value (unless you are trying to tell me that the books have been cooked all these years and the assets recorded are worth nothing like what has been stated?).

Book Value is not perfect, but in our case rising oil prices probably make it near enough. It does not include any speculative value for a theoretical strike in ironbark or any of the others.

We can’t effectively compute Owner Earnings and complete a DCF because a significant chunk of assets are tied up in cash. So current earnings are not a true reflection of earning power. Hence, we must default to Book Value right now (regrettably).

Maybe here is a better ‘housing’ analogy for you.

You own a small rental property that produces just enough income to cover rates, maintenance, depreciation etc.

Underneath the floorboards, you have stashed $85,000 in cold, hard cash. I come to you, point out all of the flaws I perceive in your property...how much harder the Labour government has made it to be a Landlord...and then reassure you that you should accept my $100,000 offer because a valuation I commissioned says the house is only worth that. Rest assured, I tell you, the valuation is independent! And just last week similar properties in your area were selling for 25% less anyway!

You just have to leave right now and leave the tenants, all contents (including the cash) etc where it is.

Would you gladly take that deal John?

[Carpenterjoe]

sooooooo,

I suppose since the value of Cue has gone up substantially. Its re-valuation time.

[digger]

Nice try but my interests are the same as any other shareholder since you asked. Not only that, any interest in the transaction must be fully disclosed in the booklet, which will be sent to everyone. As I said earlier in the week, the answers to questions about valuations and all interests associated with the transaction will all be disclosed. No one has anything to hide and the reasons the directors feel their recommendation is correct will all be set out. It's always good to hold boards to account, and debate viewpoints, and the regulatory process expects you will find the information coming your way useful in informing the debate.

You will note it is also a court-supervised process, which provides protection that everyone is treated fairly.

As NZO is sending out a booklet to all current holders you obvously have an up to date list of all addresses.I require that list so that a balanced view can be delivered.This is a formal request.Thanks in advance.

[Baa_Baa]

As NZO is sending out a booklet to all current holders you obvously have an up to date list of all addresses.I require that list so that a balanced view can be delivered.This is a formal request.Thanks in advance.

Good luck with that, have you heard of the Privacy Act?

Seriously, I've a modest few of these and I have read the concerns of shareholders here which appear warranted and Mr Pagani's response which 'was' reasonable and measured imho, until he got sucked into responding to the analogies.

Nevertheless I think shareholders would be best to wait until the full report is available and make an assessment at that time.

Too much emotion here at the moment, it is quite possible the valuers found something material that undervalues the company, however unlikely that seems at present, on face value.

Patience folks, shred the valuers report when it comes if it is as you suspect biased and sycophantic. But until then, reserve your opinions until you are fully informed.

imho, flying off the handle now is not helpful to your well being.

[mistaTea]

Good luck with that, have you heard of the Privacy Act?

Seriously, I've a modest few of these and I have read the concerns of shareholders here which appear warranted and Mr Pagani's response which 'was' reasonable and measured imho, until he got sucked into responding to the analogies.

Nevertheless I think shareholders would be best to wait until the full report is available and make an assessment at that time.

Too much emotion here at the moment, it is quite possible the valuers found something material that undervalues the company, however unlikely that seems at present, on face value.

Patience folks, shred the valuers report when it comes if it is as you suspect biased and sycophantic. But until then, reserve your opinions until you are fully informed.

imho, flying off the handle now is not helpful to your well being.

Agreed mate. Nobody should be ‘flying off the handle’ at this point. We must wait for the process to play out, review the valuation etc and assess the facts as they are presented.

In the meantime, while we wait there will naturally be a large element of online chatter while we scratch our heads in anticipation of the booklet etc.

People can vent their frustrations among fellow shareholders, whilst still adopting a pragmatic approach outside the online world while assessing the facts as they present 😎

[digger]

Good luck with that, have you heard of the Privacy Act?

Seriously, I've a modest few of these and I have read the concerns of shareholders here which appear warranted and Mr Pagani's response which 'was' reasonable and measured imho, until he got sucked into responding to the analogies.

Nevertheless I think shareholders would be best to wait until the full report is available and make an assessment at that time.

Too much emotion here at the moment, it is quite possible the valuers found something material that undervalues the company, however unlikely that seems at present, on face value.

Patience folks, shred the valuers report when it comes if it is as you suspect biased and sycophantic. But until then, reserve your opinions until you are fully informed.

imho, flying off the handle now is not helpful to your well being.

Sounds nice but but the booklet will give only OGOG side of the story.Propaganda works and if you can get it out quickly and suppress all other view points--well that is why propananda is so sucessful. Like you could ask, as John says there is nothing to hide ,why not in this booklet have a section opposing the director recommendation. Nothing but everything to hide.

[Baa_Baa]

Sounds nice but but the booklet will give only OGOG side of the story.Propaganda works and if you can get it out quickly and suppress all other view points--well that is why propananda is so sucessful. Like you could ask, as John says there is nothing to hide ,why not in this booklet have a section opposing the director recommendation. Nothing but everything to hide.

That can't be answered until the report is made available. You and some others have the wherewithal to decide whether the content of the report is credible. Until then, speculation as a shareholder on the value of the company and the basis of the offer made is just that, speculation.

I probably have a great deal less exposure to this situation than some others so am less concerned, nevertheless I do not like losing money or being ripped off. But I do accept that until the valuers report is available, imho there is not much point in agonising over the offer as it stands.

All that said, this industry (let alone this company) has a long history of ruthless leverage of investors interests, almost to the extent that the sector should be avoided in the public investment domain. Except for speculators who understand the risks.

Hopefully it works out for shareholders, but I fear that we don't hold the cards, we are not the dealer at the table, we are the punters and the house statistically always wins.

Let's see what the report says, then we can make some rational decisions where to from there.

[RTM]

For me the chit-chat is really useful. Thanks to all the knowledgeable posters.
Appreciated.
Disc: 1% of my portfolio.

[fish]

Sounds nice but but the booklet will give only OGOG side of the story.Propaganda works and if you can get it out quickly and suppress all other view points--well that is why propananda is so sucessful. Like you could ask, as John says there is nothing to hide ,why not in this booklet have a section opposing the director recommendation. Nothing but everything to hide.

Digger,
Please could yo check your private messages (hidden message)

[digger]

No other interest or bonus, although I deserve one for being awesome.:) I'll mention your recommendation to the boss.

Ok John the story I am about to tell you probably know anyway but only a very few in NZO have been aware of it. Awesome you claim well I think that belongs to me and one other person who once worked for NZO but as I haven't contacted him I will not use his name but rest assured he and I have done more for NZO than the rest of you put together.
About somewhere 4 or 5 years ago Andrew Knight {AK} as our CEO was about to transfer about 50 million to Tunisia for drilling a well called from memory Cosmos. By then we had already spent too many million in Tunisia and as I was against drilling in unstable regions and being unable to keep my opposition a secret this MR X contacted me about the matter. AK spent most of one afternoon trying to sell us that it was a good deal. We knew it wasn't and did not wait for the booklet. We were going to call a special meeting over the matter but AK then discussed it again with the board and the drilling in Tunisa was dropped. Another company when picked up where we left off and drilled. The well was dry.
Awesome hey. And until now I have told no one. The next CEO did thanks me privately and said we deserved some reward for that but none ever came. I am not paid John like you and the directors are even if I do end up forcing some decisions on you that you should be making yourselves.
I never received a cent even for my expenses. Now I am about to find that the 50 million saved will be transfered to an overseas company called OGOG and for that I should be thankful.
I shall put my resources into saving the company for the second time.

[digger]

Digger,
Please could yo check your private messages (hidden message)

I have . May not be getting through. If tomorrow still not I will put my email address here or go through Mista tea who now has my email contact.

[777]

Good on you digger.

I am not a shareholder any longer but watch with interest.

[NZSilver]

I'm following with interest, I haven't had nzo shares for years, but maybe I should buy some. Seems like plenty of value at current price from what I'm reading

[RTM]

Ok John the story I am about to tell you probably know anyway but only a very few in NZO have been aware of it. Awesome you claim well I think that belongs to me and one other person who once worked for NZO but as I haven't contacted him I will not use his name but rest assured he and I have done more for NZO than the rest of you put together.
About somewhere 4 or 5 years ago Andrew Knight {AK} as our CEO was about to transfer about 50 million to Tunisia for drilling a well called from memory Cosmos. By then we had already spent too many million in Tunisia and as I was against drilling in unstable regions and being unable to keep my opposition a secret this MR X contacted me about the matter. AK spent most of one afternoon trying to sell us that it was a good deal. We knew it wasn't and did not wait for the booklet. We were going to call a special meeting over the matter but AK then discussed it again with the board and the drilling in Tunisa was dropped. Another company when picked up where we left off and drilled. The well was dry.
Awesome hey. And until now I have told no one. The next CEO did thanks me privately and said we deserved some reward for that but none ever came. I am not paid John like you and the directors are even if I do end up forcing some decisions on you that you should be making yourselves.
I never received a cent even for my expenses. Now I am about to find that the 50 million saved will be transfered to an overseas company called OGOG and for that I should be thankful.
I shall put my resources into saving the company for the second time.

Hey Digger. Thank you for sharing this and for looking after my money.
I appreciate it and had no idea that this was going on.
Regards,
RTM

[Joshuatree]

Yes thats a fantastic tale for the little guys to chalk up and cheer about, a rarity like rocking horse droppings.Thanks for sharing Digger.

[Wiremu]

Yes thats a fantastic tale for the little guys to chalk up and cheer about, a rarity like rocking horse droppings.Thanks for sharing Digger.

It wasn't just the little guys!

[Balance]

Pike River Coal - NZOG's unfinished business.

Karma says NZOG shareholders who supported the board at that time to deny accountability for contributing to the deaths of 29 miners will never reap success.

[arjay]

My my, look who the cat dragged in.

[Balance]

My my, look who the cat dragged in.

Should have taken note of my warnings over the years, especially pertaining to Pike River.

[tim23]

What about them matching last years offer (72c from memory)?

[fish]

What about them matching last years offer (72c from memory)?

I wonder what excuse they will have for not matching it?
I think Zeta offered 72 and ogog a little more

[mistaTea]

I wonder what excuse they will have for not matching it?
I think Zeta offered 72 and ogog a little more

OGOG bid 78 cents subject to any dividends being paid.

A 4c dividend was paid, so they effectively paid 74cents per share.

At the time, the key draw for OGOG was not the money (there wasn't a lot in it between them and Zeta), but the direction they wanted to take the company. They gave the long-term business owner spiel, and how great it would be to remain as a listed company etc so that minority equity owners like myself can stay the course and get these exciting exploration prospects drilled, but people who wanted to take some cash now and run would be able to etc etc.

They had me at hello.

[fish]

OGOG bid 78 cents subject to any dividends being paid.

A 4c dividend was paid, so they effectively paid 74cents per share.

At the time, the key draw for OGOG was not the money (there wasn't a lot in it between them and Zeta), but the direction they wanted to take the company. They gave the long-term business owner spiel, and how great it would be to remain as a listed company etc so that minority equity owners like myself can stay the course and get these exciting exploration prospects drilled, but people who wanted to take some cash now and run would be able to etc etc.

They had me at hello.

Have they adequately explained why they have changed their mind and are breaking their promise?
It seems to have happened very suddenly.
Could Ironbark be the reason?
If so why didnt the Independent directors mention it?-perhaps they are not privy to research OGOG has completed but if so it makes me suspect they could be naive

[digger]

Have they adequately explained why they have changed their mind and are breaking their promise?
It seems to have happened very suddenly.
Could Ironbark be the reason?
If so why didnt the Independent directors mention it?-perhaps they are not privy to research OGOG has completed but if so it makes me suspect they could be naive

I believe that when a company is 70% controlled by another company there will be no such thing as an independent director. You want to keep your job you toe the line. Note how the company says the directors unanimously recommend the offer. This is a sort of lie on the use of words as directors must always speak as one outside the boardroom.Companies are not as advanced as say the supreme court where decisions are often given as percentage split. So if there is 5 directors and three recommend then all must recommend
We are never given or can know how split this decision was.

Yes it is my feeling that OGOG knows far more about Ironbank than they have released to the market. Andrew Knight told me a few years ago that there was some very interesting developments taking place that are adding certainty even if it didn't entirely remove the final drill requirements..I do not know what this new technology is but I was assured it would be soon hitting the market and that was a few years ago.

[fish]

Yes Ironbark clearly has value or else BP would not have bought in.
The value of this prospect will depend on its chance of success.
BP should have a good idea of this as should OGOG.
Independent directors of NZO will not be privy to this.

[Boffin]

I might decide to sell my shares should Ironbark be a dud. But after holding my NZO for Many years, I believe loyal shareholders should be allowed a chance of a great win, rather than have to face a compulsory purchase order............

[arjay]

How much per share will the Ironbark drill cost NOGers? Seems a no brainer that if after the drill the valuation is still in potential cooey of 62c then we reject the offer.

[mistaTea]

How much per share will the Ironbark drill cost NOGers? Seems a no brainer that if after the drill the valuation is still in potential cooey of 62c then we reject the offer.

Usually these exploration rigs are ballparked at costing around $100M.

CUE is fully funded for its portion of the drill, and NZOG hold 15% directly. I would expect NZOG to be prepared to spend anywhere between $15-$20M on this.

Chump change given the massive potential upside. And if they don't discover commercially viable gas, even if Equity reduced by $20M + depreciation - the value of the net assets would still be higher than the $102M (62c/share) we are being assured is a great price for our business.

If the 'independent valuation' we receive has a recommended value range anywhere near the price being offered, it will have to have a damn good story behind it for many of us to change our views.

[THEONE]

I would think that the chances of success at 62 cents would be quite low. Surely they will need to increase the offer.. I will not be selling mine.
Hopefully NZO isn't paying for this. If they are prepared to pay over 70 cents not long ago. Surely is worth paying a few million more for a potential asset worth billions.. I would like to know more about the probability of success of Ironbank.. I am sure OGOG would know. In any valuation they need to assess this. I wonder if Zeta would make a counter offer..

[Wiremu]

I would think that the chances of success at 62 cents would be quite low. Surely they will need to increase the offer.. I will not be selling mine.
Hopefully NZO isn't paying for this. If they are prepared to pay over 70 cents not long ago. Surely is worth paying a few million more for a potential asset worth billions.. I would like to know more about the probability of success of Ironbank.. I am sure OGOG would know. In any valuation they need to assess this. I wonder if Zeta would make a counter offer..

Perhaps that's their strategy, low ball offer then make a small increase so that it seems more attractive. Even though it's still a low ball offer. Just as they did before.

The price is actually irrelevant when the upside with Ironbank is taken into account, and that's what most of us remain invested in the oil & gas sector to see eventuate. And that's what seems to be missing from OGOG's approach in relation to the minority shareholders. They want it all for themselves.

[mistaTea]

Perhaps that's their strategy, low ball offer then make a small increase so that it seems more attractive. Even though it's still a low ball offer. Just as they did before.

... They want it all for themselves.

Yeah. OGOG hold 114,876,016 shares. If I offered them the same deal to buy them out, my offer price would be about $71M.

Given the massive (many billions of dollars) upside potential, do you think OGOG would sell me their equity for that price? They would laugh me out of the Board Room.

So why the hell would I sell my equity for the same pittance?

[Joshuatree]

Fabulous potential there for sure, Wiremu but i seem to remember that about 9 out of 10 exploratory drills turn out to be dusters, how do we value a 10% chance of success, generally speaking?

[Wiremu]

Fabulous potential there for sure, Wiremu but i seem to remember that about 9 out of 10 exploratory drills turn out to be dusters, how do we value a 10% chance of success, generally speaking?

Joshuatree, that's the point. Long term investors in NZOG aren't there for a valuation of a 10% chance of success, however the experts arrive at that figure. They are there to take the risk of success or not, to go the whole way. To be bought out at way less than the break-up value of the company is not why they invest, and is why they will vote no despite the alternative truths in the talking points being used to justify the scheme of arrangement.

[Chippie]

Especially those who converted options at $1.50 (from memeory) years ago to grow the company. Only to see that money sit in the bank waiting for an opportunity like Ironbank or similar

[mistaTea]

.. how do we value a 10% chance of success, generally speaking?

I suppose one school of thought would be to take the predicted net earnings attributable to NZOG, and multiply it by the probability of success (generally stated as 20% for these types of ventures).

So for example, if you thought a strike would net NZOG $2B (in today's money) over the well lifespan, and multiplied that by 20% probability of success then you would arrive at a figure of $400M.

I think this way of thinking is nonsensical though. There either is commercially viable levels of gas down there, or there isn't. It is binary. All or nothing.

And to echo Wiremu somewhat, successful long-term investors tend to look for opportunities with large upsides and small downsides (Heads I win, Tails I don't lose much). Since NZOG has been selling at a discount to NTA, any downside realised by Ironbark turning out to be a dud is somewhat mitigated for people buying in at the low share price. It would be painful, but not catastrophic. The market may well react negatively in this scenario, however the existing producing assets would still be intact, as well as the majority of the cash.

So, in summary, I don't try to pretend I can reduce risk by factoring in some kind of probability equation. I just make sure that I only buy in when the company is selling at a price that makes sense, given the opportunities.

[Vaygor1]

I suppose one school of thought would be to take the predicted net earnings attributable to NZOG, and multiply it by the probability of success (generally stated as 20% for these types of ventures).

So for example, if you thought a strike would net NZOG $2B (in today's money) over the well lifespan, and multiplied that by 20% probability of success then you would arrive at a figure of $400M.

I think this way of thinking is nonsensical though. There either is commercially viable levels of gas down there, or there isn't. It is binary. All or nothing....

Yes it is binary (kind of, as an oil/gas reservoir can still be viable if the results aren't quite up to expectation, unlike the cost of putting in a tender for a construction job, whereby the outcome truly is binary), but it must be evaluated somehow.

Off the top of my head it's a calc weighing up the benefit of success x the odds of success verses the cost of failure x the odds of failure. I'll look it up next week sometime. In any case these 4 variables can be heavily skewed one way to suit a buyer, and the other to suit a seller.

[mistaTea]

... but it must be evaluated somehow.

Off the top of my head it's a calc weighing up the benefit of success x the odds of success verses the cost of failure x the odds of failure. .

When an exploration company is looking at a range of opportunities to drill, then I think the more complex calculations become more important. Probabilities of success, costs involved, upside potential and opportunity costs will all be weighted and added up as the organisation tries to work out which drill site to go after...where it should focus its capital.

When you are buying into a listed company that has already (presumably) done these calculations and committed to a drill site...

Then I think it is a little different. You compare the current market capitalisation of the business against existing assets + production, and then make adjustments based on different scenarios. Like:



Ironbark comes up dry (WORST CASE SCENARIO). How much $$$ will NZOG have wasted? How much worse off is the balance sheet?
Ironbark strikes, but only has 5Tcf of commercially viable gas. How does that change the upside?
Ironbark strikes, but only has 10Tcf of commercially viable gas. How does that change the upside?
Ironbark strikes, and does have 15Tcf of commercially viable gas. BEST CASE SCENARIO! JACKPOT!!


When you run these types of scenarios, and contrast it against the share price you can make a value judgement as to whether or not it makes sense to buy into the company.

In fact, I steer clear of calculations that aim to provide precision/certainty. In my experience, they are usually precise alright - precisely wrong :eek2:

[fish]

mistaTea, your comment "given the massive (many billions of dollars) upside potential" for Ironbank I thought I would try and find some measure of that upside.

On April 11 2019 Cue Energy included this in a press release: “This is an exciting time for Cue. Shareholders now have the opportunity to participate in a fully-funded well with a 21.5 percent participating interest. This is a 15tcf prospect, 50 kilometers from existing LNG infrastructure. “It will be company-changing if the well is successful.” Matthew Boyall said.

Presumably tcf means trillion cubic feet. So what is one trillion cubic feet of gas worth?

Steve Maley (Steve Maley, 40+ years of reservoir, operations, economics & management) through Quora replies as following, noting the dollars he uses are US$:

"It depends on a number of factors, including quality, location, contract delivery terms, etc.

In the U.S., the value at the wellhead is about $3.00 per million BTU, which for 1,000 BTU gas is the same as $3.00 per thousand cubic feet.
One trillion cubic feet would therefore be worth $3 billion at the wellhead (i.e., to the producer), which is kind of nonsensical because it will take a while to deliver that quantity.
If you’re contracting for delivery of LNG by tanker, you’re probably going to pay a higher price, probably one based on the energy content on a barrel of oil equivalent basis.
That would be a price closer to $9.00/mcf. The value of a 1 TCF contract delivered over a several year term would be $9 billion to the purchaser.
The cost of processing, transporting, and liquefying the gas is considerable."

Very interesting.

Thanks so much for that pricing.
A quick crude valuation counting NZO share of CUE is a success equals $100 per share of gas over a period of time.
Using a chance of success at 1 in 5 equals $20 a share
Then discount for drilling and development,running expenses etc and maybe $10 a share

[digger]

Interesting comments here the last few days. Nonsensical and probabilities thrown about. The probabilities are sure nonsensical.
If there is a 1 in 8 chance of success then NZO next drill [ironbank] had better come in as we have used up our quota of dry wells. Now as everyone knows that is nonsensical as a fair coin can be heads or tails as long as it like and the average is still the same over a long enought throwing. What we need to keep clear is that we oilers drill because we always hope for that big one.

Anyone remember long enough back to the KUPE drilling soon after NZO was floated. The SP rocked up but later came down as it was thought the figures were too optimistic. Fast forward about two decades to the discovery and the size of the well was again near the first guess. We will never probably know the final figure as some idiot [ZETA] sold us out. Anyways why I am bring this up is because in trying to assess the probabilities of success we need to remember that figures can be shifted around to suit making any probability nonsensical.
I think we should keep nonsensical not too far from our vocabulary because shortly we will be receiving from NZO Mao Tse Tung little red book of facts. Then we will all know the true meaning of nonsensical.

[mistaTea]

Interesting to note the CUE Market Cap is currently sitting at AU$74M (NZ$77M).

So 50% of 77 = NZ$38.5M. Plus, say, NZ$85M of cold hard cash attributable to NZOG.

Already, that brings us to a total of NZ$123.5M (about 75c/share). We haven't even sold our 4% in Kupe yet, nor factored in any value of Ironbark yet we are already easily above the $102M implied business value that OGOG have offered.

This booklet and independent valuation we are about to receive soon is going to need to be pretty damned slick indeed - no matter which way I look at it, I just can't seem to get it through my thick skull.

[Xerof]

I'm not a NZO holder, but was interested to see the SofA announcement. The first thing you guys need to get clear is whether OGOG is entitled to vote. If they are, it's what is commonly known as a minority squeeze-out, and if ALL directors vote in favour, the pass rate is 50% not 75%

I know from experience that this type of underhand tactic is common in jurisdictions such as Bermuda - not sure about NZ, and can't find anything from a brief search, but you guys will be motivated to check it out.

Don't mean to be the fox in the coop, but it's worth finding out early, whether this is already a fait accompli, or not.

John Pagani might be able to categorically dismiss my line of thought in a moment for you.........

[mistaTea]

Don't mean to be the fox in the coop, but it's worth finding out early, whether this is already a fait accompli, or not.

John Pagani might be able to categorically dismiss my line of thought in a moment for you.........

Far from a fait accompli.

Two conditions need to be met for the SoA to pass.


A simple majority (>50%) of the entire shareholder base must participate in the vote; and
Each interest class must achieve a 75% majority in favour. OGOG is one interest class, and the minority shareholders are another. So the main vote that counts for practical purposes is the minority share holders interest class.


I have had this confirmed by John Pagani.

Personally, I think the vote has a slim chance of passing in favour of OGOG. Though I stand to be corrected, I imagine that most of the remaining business partners (minority shareholders) still have holdings in NZOG because we believe in the company's future prospects. Otherwise we would have dumped our holdings during the SP spike in 2017 when the Zeta vs OGOG arm wrestle ensued and/or when there was an opportunity to sell to OGOG at 78c/share (minus dividend).

In other words, if I am right and the majority of the larger minority shareholders like to hold NZOG as a long-term investment (to Hell with the share price in the interim...) then it would take a very generous offer indeed to entice them to forgo the once-in-a-lifetime opportunity to drill ironbark.

We will see soon enough if I am right, or whether or not I need to eat my hat.

[CD_CHCH]

We have a very small holding but will be voting to decline the offer. If OGOG were serious about mopping up the minority shareholders their starting point should have been equal to or higher than their original buy in offer.

[mistaTea]

We have a very small holding but will be voting to decline the offer. If OGOG were serious about mopping up the minority shareholders their starting point should have been equal to or higher than their original buy in offer.

Agreed 100%

[tim23]

My thoughts entirely you are spot on!

Interesting to note the CUE Market Cap is currently sitting at AU$74M (NZ$77M).

So 50% of 77 = NZ$38.5M. Plus, say, NZ$85M of cold hard cash attributable to NZOG.

Already, that brings us to a total of NZ$123.5M (about 75c/share). We haven't even sold our 4% in Kupe yet, nor factored in any value of Ironbark yet we are already easily above the $102M implied business value that OGOG have offered.

This booklet and independent valuation we are about to receive soon is going to need to be pretty damned slick indeed - no matter which way I look at it, I just can't seem to get it through my thick skull.

[Joshuatree]

Thanks all for sharing, great info.. Looks like a unanimous NO!:mad ;:.

[Marilyn Munroe]

Prime Minister Adern banned offshore oil and gas exploration because it was evil.

Nek minit Revenue Minister Stuart Nash extends the tax break for oil exploration and seismic survey equipment because it is good.

I'm confused.

Boop boop de do
Marilyn

https://www.stuff.co.nz/national/politics/114435232/government-extends-tax-break-for-oil-rigs-despite-promise-not-to-subsidise-fossil-fuel-industry

[arjay]

Bit odd alright. Sorta like how Port Chalmers was falling all over itself to host the Barque drilling base, nek minit Dunedin is declaring a climate emergency.

[kiora]

Prime Minister Adern banned offshore oil and gas exploration because it was evil.

Nek minit Revenue Minister Stuart Nash extends the tax break for oil exploration and seismic survey equipment because it is good.

I'm confused.

Boop boop de do
Marilyn

https://www.stuff.co.nz/national/politics/114435232/government-extends-tax-break-for-oil-rigs-despite-promise-not-to-subsidise-fossil-fuel-industry

A bit contrary if they still drive ICE cars ?

[fish]

OGOG maybe feeling unwanted in NZ.
I would not be surprised if they have plans to takeover NZO and head to AUS with all the assets they can get away with-will need 90% of all shares to do this .

[blackcap]

For what its worth:

I attended a presentation that was hosted by the Wellington Branch of the NZSA where Andrew Jefferies CEO of NZO had an in depth hour and a half long presentation on the prospects of NZO. He talked a lot about Ironbark and was in my opinion very bullish on this. He was also in my opinion bullish on NZO. I purchased some NZO shares the next week in the low 50's because of this presentation. This was from memory in May 2019. In addition to being CEO, he is also a director of NZO.

[mistaTea]

For what its worth:

I attended a presentation that was hosted by the Wellington Branch of the NZSA where Andrew Jefferies CEO of NZO had an in depth hour and a half long presentation on the prospects of NZO. He talked a lot about Ironbark and was in my opinion very bullish on this. He was also in my opinion bullish on NZO. I purchased some NZO shares the next week in the low 50's because of this presentation. This was from memory in May 2019. In addition to being CEO, he is also a director of NZO.

Yes, we are all bullish on Ironbark.

The reality is, if the prospects of NZO were as doom and gloom as is now being highlighted, OGOG would not be rushing to buy the remaining 30%. Ofer Global has not grown into the colossal success that they have become by throwing more good money after bad.

They paid about $85M to get the first 70% of NZOG. Now they would like to pick up the rest for $30M.

That would make the total amount paid for all of NZOG $115M (69c/share) - less than the existing assets are worth. Not a bad deal if you can get it - especially when, as you say, everyone including BP, Beach, OGOG, Cue and the Directors of NZOG are very bullish on the enormous Ironbark prospect (touted at being 5 times as large as Maui!)

[mistaTea]

Another thing that I think the reps from NZOG seem to forget while they were trying to work out a way to value the assets and come up with a 'fair' offer price...

The minority holders have not asked for this. It's not like 2 or 3 large minority holders have approached OGOG to see if they would pretty please take our shares off our hands because they were feeling so gloomy about NZOG. If that was the case, the 62 cent offer would make some sense.

It is OGOG who is thrusting this process onto us. Possibly not realising that a significant portion of the minority base are long-term business owners, dead set on exploring Ironbark, OGOG probably genuinely thought that an offer price 25% above the recent share price would be seen as a big win. A great boon.

In reality, most of us really couldn't give a sh1t what the short-medium term share price is. ALL we care about is how the business performs over time, and what the likely future prospects are.

And, baby do we wanna drill!

[fish]

absolutely
The thrill of the drill

[mistaTea]

absolutely
The thrill of the drill

Looks like this particular drill is estimated at costing a lot less than I originally thought too. Only about $30M likely for the exploration well (not $100M). Maybe allow up to $50M if costs blow out.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZO/321973/284201.pdf

So NZOG would need to pay $4.5M. Hell, let's double that and round up to $10M to allow for cost blow outs and the amount we need to carry CUE for...

A very small investment required, for a potentially huge (and I mean HUGE) upside. If we were a gospel choir I'd be demanding an AMEN right about now. Possible even a HALLELUJAH!

[RTM]

You are all almost talking me into buying more...even at todays price !
I never was going to sell anyway. Won't until I am forced.

Cheers and thanks for all the considered opinions.

One thing that does niggle away at me....is it seems so clear cut that we should reject the offer.
Soooo...what are we possibly missing with our rose tinted glasses ? I have no idea.

Cheers
RTM

[mistaTea]

You are all almost talking me into buying more...even at todays price !
I never was going to sell anyway. Won't until I am forced.

Cheers and thanks for all the considered opinions.

One thing that does niggle away at me....is it seems so clear cut that we should reject the offer.
Soooo...what are we possibly missing with our rose tinted glasses ? I have no idea.

Cheers
RTM

Sure. Downside is that Ironbark turns out to be a dry well and Barque + Toroa permits are abandoned due to lack of interest from potential farm-in partners caused by the Labour government offshore ban.

But even then, the existing production assets would still exist plus the majority of the cash in the bank (unless it has been deployed by then into other income-producing assets).

It wouldn’t be a great situation to be in, but life would go on and we wouldn’t lose everything.

Heads I win. Tails I don’t lose - much.

[Sideshow Bob]

Surely with the price jump to 61 since the announcement (occasional trades at 62c), then anyone buying would have the expectation of a higher price - and strengthen the likelihood of not getting what they need to, to mop up the company. Not going to buy in to make 1 cent.

Although volumes traded haven't been great....

[fish]

Surely with the price jump to 61 since the announcement (occasional trades at 62c), then anyone buying would have the expectation of a higher price - and strengthen the likelihood of not getting what they need to, to mop up the company. Not going to buy in to make 1 cent.

Although volumes traded haven't been great....

Anyone buying into any company would have the expectation of a higher price or good returns to make it worth taking the risk.
It seems to me that OGOG have realized(reinforced today by greenpeace actions) that the current climate in NZ is hostile.
They might want to get out of NZ and take the cash and Ironbark permit and majority holding in cue at the lowest possible cost.
Its unlikely they will get this at 62 cents a share and so may have to increase the offer price-this is one of the attractions of buying-not with the intention of making 1 cent.
Then you have to factor in the risk of the sp dropping

[blockhead]

I tell you what I reckon might happen SSB, the appraisal will come out suggesting 62c is highway robbery, there won't be an increased offer from the Highway robbers and the sp will drift back towards where it was a month ago with all the long term holders hanging onto Ironbark hopes, most holders have probably been in NZO for so long their investment is written off in their minds and hanging on a bit longer won't really matter now anyway.
With that in mine mine are being slowly sold @ 62c.

Could be wrong of course !

[RTM]

……... most holders have probably been in NZO for so long their investment is written off in their minds and hanging on a bit longer won't really matter now anyway.
!

Yep...that's me. There's been so many transactions over the years I really wouldn't know whether I'm up or down or even on this one. Having owned some of them from the start.

[fish]

I tell you what I reckon might happen SSB, the appraisal will come out suggesting 62c is highway robbery, there won't be an increased offer from the Highway robbers and the sp will drift back towards where it was a month ago with all the long term holders hanging onto Ironbark hopes, most holders have probably been in NZO for so long their investment is written off in their minds and hanging on a bit longer won't really matter now anyway.
With that in mine mine are being slowly sold @ 62c.

Could be wrong of course !

Looking at the volume weighted average price this could be a very slow process.
I hope you are right.
I really dont want to be the victim of highway robbery.
Fortunately I am in a position where I dont want to sell at 62 cents and have a buy order in at 61 cents.
If the sp drops it will give me a cheaper buy in price
I am still working and will be able to buy a lot more-I did own a 7 figure number a long time ago and would like to get back to that position again.

[fish]

Oil and gas company Beach Energy has agreed to sell a 37.5 percent share in the PEP 38264 license offshore New Zealand to a subsidiary of O.G. Energy.

To me it makes nonsense of the assertion that NZ is no longer attractive to explorers.It also makes nonsense of my previous guess that OGOG wanted to take NZO out of NZ-they are clearly here to drill.
They look as if they will be committed to drill by 2021 and so I guess a drilling rig will be in the canterbury basin and will be able to drill for NZO.











\

[mistaTea]

Oil and gas company Beach Energy has agreed to sell a 37.5 percent share in the PEP 38264 license offshore New Zealand to a subsidiary of O.G. Energy.

To me it makes nonsense of the assertion that NZ is no longer attractive to explorers.It also makes nonsense of my previous guess that OGOG wanted to take NZO out of NZ-they are clearly here to drill.
They look as if they will be committed to drill by 2021 and so I guess a drilling rig will be in the canterbury basin and will be able to drill for NZO.
\

Certainly does make a mockery of the notion that OGOG thinks the NZ regulatory environment has become too damn tough - but lucky for the minority holders they are still willing to offer a pittance to buy us out, and save us from ourselves and the bleak prospects.

At the end of the day, if it came down to it, I’m reasonably confident that OGOG could purchase a significant % of Clipper.

So if they continue to be extremely confident about the 11Tcf prospect, but genuinely couldn’t get anyone else to farm in...they could still make the drill happen if they wanted to.

Not having to deal with pesky minority shareholders just makes the process easier for them (and obviously increases their upside).

[fish]

I tell you what I reckon might happen SSB, the appraisal will come out suggesting 62c is highway robbery, there won't be an increased offer from the Highway robbers and the sp will drift back towards where it was a month ago with all the long term holders hanging onto Ironbark hopes, most holders have probably been in NZO for so long their investment is written off in their minds and hanging on a bit longer won't really matter now anyway.
With that in mine mine are being slowly sold @ 62c.

Could be wrong of course !

Everyone can be wrong.
I am getting increasingly frustrated at not being able to buy more at 61 cents
If I increase my bid to 61.5 will you come down 1/2 cent-knowing that the SP could drop to where it was before the Ofer(?a pun and the whole post a joke-but it could be true!)

[freddagg]

Everyone can be wrong.
I am getting increasingly frustrated at not being able to buy more at 61 cents
If I increase my bid to 61.5 will you come down 1/2 cent-knowing that the SP could drop to where it was before the Ofer(?a pun and the whole post a joke-but it could be true!)

Just pay Blockhead the 62c - I did.
Mr Ofer knows he wont get any sellers at 62 cents, he is just trying to soften us up to accept a lowball 85 cents.

[fish]

Just pay Blockhead the 62c - I did.
Mr Ofer knows he wont get any sellers at 62 cents, he is just trying to soften us up to accept a lowball 85 cents.

I did wonder how blockhead managed to sell some at 62 cents on market as only a handful have gone through at that price.

Mr Ofer certainly is worth a lot of money-over 10 billion US -I am now wondering if he has solved the problem of what to do with the gas that we know is sitting in the canterbury basin-

From Wikipaedia-Ofer is also the principal of OMNI Offshore Terminals, the largest provider of floating production storage and offloading (FSO & FPSO) assets to the offshore oil and gas industry. Founded in 1990, the Singapore–headquartered company has delivered 23 conversion projects, 2 FPSO and 21 FSO.[40]
This gets over the greenpeace and resource consent problems of putting in infrastructure to bring and process gas onshore.Doesnt bring much benefit to NZ

[Wiremu]

This from NZOG in mid-2018:
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZO/317884/279073.pdf
and the decision to farm-in to PEP38264 in which the announcement includes "New Zealand offers attractive fiscal terms, in a stable regulatory environment and with a transparent government" all shows how duplicitous are the talking points that OGOG are using to justify their buyback proposal.

[mistaTea]

This from NZOG in mid-2018:
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZO/317884/279073.pdf
and the decision to farm-in to PEP38264 in which the announcement includes "New Zealand offers attractive fiscal terms, in a stable regulatory environment and with a transparent government" all shows how duplicitous are the talking points that OGOG are using to justify their buyback proposal.

Thanks for sharing Wiremu - it is great to review these documents (that are barely a year old) and contrast them to the current negative picture that OGOG are presenting.

Given that NZOG currently has significant equity stakes in prospects that potentially have over 30Tcf in gas alone...one will never be able to convince me that it is in my best interest to sell my NZOG shares for less than Book Value. Realistically, I would need to be offered a generous premium to the value of existing assets before I would even entertain the idea of grabbing some cash now and running.

And despite the notion that NZ has become 'too hard' now...on that matter I am calling bullsh1t. Existing permits will be honoured under the previous rules, and OGOG will make these drills happen - even if it means they need to farm-in themselves and take 50% of Clipper.

As they said when they were wrestling Zeta for control - the Barque prospect is just too damned interesting to ignore. I agreed with them then, and I agree with them now.

[fish]

Thanks for sharing Wiremu - it is great to review these documents (that are barely a year old) and contrast them to the current negative picture that OGOG are presenting.

Given that NZOG currently has significant equity stakes in prospects that potentially have over 30Tcf in gas alone...one will never be able to convince me that it is in my best interest to sell my NZOG shares for less than Book Value. Realistically, I would need to be offered a generous premium to the value of existing assets before I would even entertain the idea of grabbing some cash now and running.

And despite the notion that NZ has become 'too hard' now...on that matter I am calling bullsh1t. Existing permits will be honoured under the previous rules, and OGOG will make these drills happen - even if it means they need to farm-in themselves and take 50% of Clipper.

As they said when they were wrestling Zeta for control - the Barque prospect is just too damned interesting to ignore. I agreed with them then, and I agree with them now.

The minority shareholders are being deceived.
The true value of Barque and Ironbark are being ignored.
For instance Ironbark has a much higher chance of success that I used in my calculation to give an indication of its value.
Technology has advanced so much that the real value has increased tremendously over the last few years-Bp and OGOG are going for what are most likely going to be successful drills.

[blockhead]

Fish & Fred Dagg, there were only 150 or so a day going through each day, mostly bot trades I think, something in the wind this morning though as the last 30,000 or so have gone @ 62c.

[fish]

Fish & Fred Dagg, there were only 150 or so a day going through each day, mostly bot trades I think, something in the wind this morning though as the last 30,000 or so have gone @ 62c.
Probably just me
Fred said to pay 62 cents so I am
If you have anymore at 62 cents and want to sell I still am seeking more-and will do so for rest of day as flying out tomorrow for 2 weeks

[blockhead]

I would have kept them for a while yet but I needed $15k to get a wee pile of KTD, the NZ dairy factory on the ASX, milk or oil ???............ went for milk for the time being.

[mistaTea]

Probably just me
Fred said to pay 62 cents so I am


Someone stumping up 63c/share.

[fish]

Someone stumping up 63c/share.

Just one buyer at 62 cents-and thats me
I also have buys in at 61.5 cents
Flying out tomorrow for 2 weeks so will take off market before i go-if not traded!

[fish]

mistaTea, your comment "given the massive (many billions of dollars) upside potential" for Ironbank I thought I would try and find some measure of that upside.

On April 11 2019 Cue Energy included this in a press release: “This is an exciting time for Cue. Shareholders now have the opportunity to participate in a fully-funded well with a 21.5 percent participating interest. This is a 15tcf prospect, 50 kilometers from existing LNG infrastructure. “It will be company-changing if the well is successful.” Matthew Boyall said.

Presumably tcf means trillion cubic feet. So what is one trillion cubic feet of gas worth?

Steve Maley (Steve Maley, 40+ years of reservoir, operations, economics & management) through Quora replies as following, noting the dollars he uses are US$:

"It depends on a number of factors, including quality, location, contract delivery terms, etc.

In the U.S., the value at the wellhead is about $3.00 per million BTU, which for 1,000 BTU gas is the same as $3.00 per thousand cubic feet.
One trillion cubic feet would therefore be worth $3 billion at the wellhead (i.e., to the producer), which is kind of nonsensical because it will take a while to deliver that quantity.
If you’re contracting for delivery of LNG by tanker, you’re probably going to pay a higher price, probably one based on the energy content on a barrel of oil equivalent basis.
That would be a price closer to $9.00/mcf. The value of a 1 TCF contract delivered over a several year term would be $9 billion to the purchaser.
The cost of processing, transporting, and liquefying the gas is considerable."

Very interesting.

What is even more interesting is that BP is drilling it next year.I have been told by a very reliable source in the Industry(usa) that BP are the best at this kind of exploration and he doubted that bp would have bought in if the prospect of success was not at least 1 in 2.This astonished me but I was completely reassured that bp do not invest the kinds of sums involved in this deep drill unless this was the odds of success

[mistaTea]

What is even more interesting is that BP is drilling it next year.I have been told by a very reliable source in the Industry(usa) that BP are the best at this kind of exploration and he doubted that bp would have bought in if the prospect of success was not at least 1 in 2.This astonished me but I was completely reassured that bp do not invest the kinds of sums involved in this deep drill unless this was the odds of success

That is very interesting. I didn’t know about the 1:2 odds - but it has been very clear to me that BP think the odds of a large strike are much better than the statistical average of 20%. No way would they buy 42.5% equity and take the role as operator unless they thought there was a better than average chance of a large payoff.

I said as much in my letter to John Pagani - if Ironbark is good enough for BP, then it is good enough for me...and certainly not worthless!

[Sideshow Bob]

https://www.nzx.com/announcements/338343

Quarterly cashflow report (+ why 62 cents is such a good price)

[mistaTea]

So that infographic showing the $54.7M uncommitted NZOG funds made me snort into my coffee this morning. The information is completely true of course, but somewhat misleading in how it is represented.

They seem to be going to great pains to emphasise the fact that the financial statements are consolidated with Cue's this quarter (when they have not even mentioned that explicitly in the past...)

The fact that $35.5M of the available cash is earmarked for Ironbark (between Cue and NZOG) is somewhat irrelevant. That is still our money, which we choose to use for investment (in this case an exploration well in Australia).

So to present an infographic that suggests we only actually have $55M left is a nonsense.

The reality is, Cue hold $26M in cash. So we have to deduct approx half of that from the consolidated cash balance to get a better idea of how much cash NZOG holds.

By my math, $105M - $13M = $92M attributable to NZOG shareholders (56c/share in cash alone). Yes, we will spend millions drilling Ironbark in anticipation of the large upside - but let's not pretend the money doesn't exist and isn't ours.

The 62 cent offer is looking worse by the day imo.

[mistaTea]

Looks like this particular drill is estimated at costing a lot less than I originally thought too. Only about $30M likely for the exploration well (not $100M). Maybe allow up to $50M if costs blow out.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZO/321973/284201.pdf

So NZOG would need to pay $4.5M. Hell, let's double that and round up to $10M to allow for cost blow outs and the amount we need to carry CUE for...

A very small investment required, for a potentially huge (and I mean HUGE) upside. If we were a gospel choir I'd be demanding an AMEN right about now. Possible even a HALLELUJAH!

Oh, and don't forget my post from a week ago. The actual cost to drill a well in Ironbark is estimated by Cue to only be about $30M.

NZOG will, quite sensibly, include a reasonably large contingency as there will certainly be some unforeseen costs during the drill.

However, stressing that a worst-case-scenario amount of cash is tied up in Ironbark (and that we should pretend it doesn't exist, and isn't ours...and therefore should not really be included in a fair figure for how much the business is worth...) is madness.

NZOG effectively control just shy of 26% of Ironbark. So, in the best case scenario, we would be on the hook for only 0.26 x 30 = $8M. Add another couple of mil for sweeteners paid to Cue etc and call it $10M. In that scenario, if we drill a well and it turns out dry we would still have approx $80M cash left. Even if costs blow out, and we double that...we would still be left with $70M. Not ideal, but not a disaster either.

So the $35M shown includes a Hell of a lot of contingency. Which, as I say, is not necessarily wrong to do - probably quite sensible actually - but to pretend that the money does not exist today, and is probably all going to be written off anyway is just nuts.

Right now, we hold 56cents/share in cash alone. If OGOG want to induce us to sell out shares, then let's recognise that and come back with a purchase offer price that actually makes sense (I suggest their current offer needs to be tripled - and probably actually quadrupled - before we can sensibly begin to negotiate).

[digger]

This place is getting more interesting by the day. When I read the way OGOG is trying to fug the accounts of NZO I remembered the first farm I sold to buy the present one. The deal nearly fell over because my buyer,for some stupid reasoning, didn't want the money lenders [bank] to know he had just bought a new tractor. By keeping that fact hidden his equity ratio was too little.So I told the bank even though I had sort of agreed not to. Then the bank was happy and in fact gave us both a lecture on showing all your equity on the balance sheet.
Now I know OGOG know all about handing balance sheets but in this case they are going out of their way to cloud the issue and assuming enought of us will fall for the small sum of money left uncommited. All monies invested have to be accounted,just as my farm buyer found out. This invested money into Ironbank is only nil if the well should be dry.OGOG is saying by their actions that is the case now. It isn't. If they wanted to be positive about it they could have just as easily have added another 100 million or more.
I have been trying without success to put a value on Iron Bank.In the end the most positive thing I can see for keeping my investment in NZO is that OGOG wants me out and the lot for themselves. They have some new technology and know the chances of success is far higher than they are letting on.
The finanicals released today were the manipulated propaganda rubbish I expected. Notice no positive comments. Imagain if a cash issue was coming up. we would have been bombbarded with positives. Like the higher oil prices,etc ---but none of that. Just told that the money into IronBank is not ours,or so the accounts would suggest.
When is Mac Tse Tung little red book coming out.

[Sideshow Bob]

There is some little unknown company called BP - who are the operator and hold 42.5%.

From my perspective, the fact that they are involved must ascribe some value.....

[mistaTea]

I have been trying without success to put a value on Iron Bank.

I don't think it is possible to put a specific value on Ironbark. I do think you can come up with a range of values though by making some reasonable assumptions.

I am not going to detail my workings here, but by my reckoning, if a discovery is made, Ironbark is probably worth somewhere between $20-$30 Billion of revenue attributable to NZOG. Possibly more.

You can make your own assumptions in terms of what that might mean in terms of profits, but we are talking really big money here.

[fish]

I don't think it is possible to put a specific value on Ironbark. I do think you can come up with a range of values though by making some reasonable assumptions.

I am not going to detail my workings here, but by my reckoning, if a discovery is made, Ironbark is probably worth somewhere between $20-$30 Billion of revenue attributable to NZOG. Possibly more.

You can make your own assumptions in terms of what that might mean in terms of profits, but we are talking really big money here.

Fully agree
NZO have about a 1 in 2 chance of a billion or so US revenue for around 20 years from this one exploration.
Then we have the other permits in NZ-not quite as lucrative as this but we know Clipper has gas.
Gas is the cleanest of the fossil fuels and the technology is here to process and export it sea-OGOG has the platforms to do this

NZO is in a happy place.
I am still trying to buy more but not getting many shares at 62 cents-might have to increase my bid!

[mistaTea]

Not fraudulent at all.
It is duplicitous in my opinion and NZO management are involved in this duplicity.
They have certainly lost my trust (possibly never had it )
Ofer didnt get to be one of the richest men in the world by fraud and their will be no fraud in this attempted takeover.
If NZ loses NZO it will be a potential miss on maybe 10 to 50 billion US dollars for the country.
Barque hydrcarbons need not be piped to the shore.
Maybe the greens will not have to protest
NZ will be worst of for the takeover

Yes, no cause to accuse anyone at NZOG and OGOG of committing fraud.

They are trying to be clever in how they present the facts and figures to us to reinforce a narrative that NZOG isn’t really worth much and we should sell it to them for cheap...

Hopefully enough of us aren’t silly enough to fall for it.

[RTM]

Fully agree
NZO have about a 1 in 2 chance of a billion or so US revenue for around 20 years from this one exploration.
Then we have the other permits in NZ-not quite as lucrative as this but we know Clipper has gas.
Gas is the cleanest of the fossil fuels and the technology is here to process and export it sea-OGOG has the platforms to do this

NZO is in a happy place.
I am still trying to buy more but not getting many shares at 62 cents-might have to increase my bid!

You can have half mine at $5.00
:)

[Wiremu]

Interesting information from:http://www.sharechat.co.nz/article/82d944d9/cosl-prospector-ideal-rig-for-great-south-basin-omv.html

"The hydrocarbon potential of the deep sedimentary rock in the Great South Basin, and the Canterbury Basin to the north, has long been recognised. There are proven petroleum systems in the region but drilling has been sporadic since the 1970s and activity dried up after the plunge in oil prices late 2014.

Ten of the 14 wells drilled in the Canterbury-GSB basins have encountered hydrocarbons, with four delivering sub-commercial discoveries.

Vienna-based OMV has previously estimated the potential resource in just the key prospects in the permits held by it, New Zealand Oil & Gas and Beach Energy, at the equivalent of almost 3.7 billion barrels of oil and gas. The two basins cover roughly 160,000 square-kilometres – four-times larger than the producing and geologically related Taranaki basin.

[fish]

You can have half mine at $5.00
:)

I would be interested in an option to buy at that price in 2 to 3 years time
Cheers

[mistaTea]

I can’t wait for the doom and gloom annual report at the end of the month.

With The Group sitting on $105M cash, zero debt and 3 potentially game-changing exploration permits...who would have thought that life sucked so bad!

😂

[digger]

I can’t wait for the doom and gloom annual report at the end of the month.

With The Group sitting on $105M cash, zero debt and 3 potentially game-changing exploration permits...who would have thought that life sucked so bad!

��

But wait there is more.
The books shall be cooked. Yesterday we seen how 50 million disappeared into Ironbank never to be counted again as part of NZO equity.

Shortly the two GSB drills earmarked for 2001 will each need 50 million. So we will be broke.Nil free cash and no one from OGOG controlled managment of NZO allowed to considers equity. Better sale to OGOG while the offer to rob you is still open.

[mistaTea]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZO/338541/304593.pdf

Egads! More doom and gloom - we are running out of oil now and will be broke before I dared to think!

Genesis must be gutted at buying our 15% for a higher rate than we bought back in for 4%...

As digger has pointed out, I better grab the 62cents with both hands before OGOG realise what a worthless piece of crap NZOG is, rife with nothing but problems...before they rescind their perfectly generous and reasonable offer!

[mistaTea]

Here is the update from Genesis:

KUPE PRODUCTION UPDATE
Genesis, as the buyer of Kupe gas production, has been informed by the Kupe Joint Venture (with Beach Energy as the Operator) that production has come off plateau. This is in line with reservoir modelling and is the result of record production at Kupe over the last few years. Maximum production is expected to reduce at a rate of between 1.2% and 1.5% per month until the Inlet Compression Project is completed in mid-winter 2021. The actual rate of decline is likely to vary based on overall production and other factors and will be visible on OATIS as it occurs. There has been no change to field reserve estimates.
The Operator recently concluded the Development Study for the Inlet Compression Project, which is the first stage under Phase Two Development. The Joint Venture partners are expected to make a final investment decision in the near term.

Certainly a different tone to our update. :eek2:

[yabster]

definition of fraud: an act of deceiving or misrepresenting.......:mad ;:

[RTM]

definition of fraud: an act of deceiving or misrepresenting.......:mad ;:

Watching American politics....its surprising how the same event can be described so so differently by the different parties. And neither is necessarily wrong.

[fish]

definition of fraud: an act of deceiving or misrepresenting.......:mad ;:

Hi Yabster

I understand your feeling but the legal definition is a lot more than this-like it or not we all deceive at times-for good or fun-eg a birthday surprise-or for less good reasons and maybe some of us even hurt other peoples feelings or reputation by doing so.I have personally sued someone for $250,000 after defaming me but what made me sue was they hurt others and had been doing it repeatedly.
They settled out of court but I really wanted to take them to court and only settled to make my wife happy.
Once his employers and lawyer realised the truth they changed-he no longer works for them and I get on fine.

[mistaTea]

Cue doing well. Upbeat Media Release for Annual Report.

http://www.cuenrg.com.au/irm/PDF/2547_0/MediaReleaseFY19FullYearResults

[RTM]

https://www.nzx.com/announcements/339819

It seems interesting that the a loss has been made - $2.9m. However against this cash has increased by $7.6m. But I am not a bean counter.

[fish]

https://www.nzx.com/announcements/339819

It seems interesting that the a loss has been made - $2.9m. However against this cash has increased by $7.6m. But I am not a bean counter.

Revenue up 20% but best of all is Ironbark going ahead next year(as we know BP operating-high chance of a mind-blowing valuable successful drill from my sources)

[arjay]

Don’t get it. 10 yrs on, NZO CEO is still doing the ‘we have 100 mil in the bank and are looking for exciting opportunities” routine, and RNZ are still treating it as news.

[fish]

Don’t get it. 10 yrs on, NZO CEO is still doing the ‘we have 100 mil in the bank and are looking for exciting opportunities” routine, and RNZ are still treating it as news.

That is true.
They report what the company discloses without investigating deeper
They have one very important drill going ahead next year and possibly another one the following year which are likely to be successful and company transforming

[mistaTea]

Overall, not a bad result given the company remains in a holding pattern - awaiting the exciting Ironbark drill, and accumulating cash in the meantime.

Underlying 'Owner Earnings' attributable to NZOG are sitting at around $4M (same as last year, which is to be expected). I am not going to demonstrate a detailed formula of how I arrive at that figure, but it is a concept I have learnt from Buffett which allows you to look through the smoke and mirrors of GAAP to get a feel for how much a business is worth to the long-term owner, from an earnings perspective.

The impairment cost is totally legitimate and necessary. But it is a non-cash transaction. For those who may be less familiar with accounting shenanigans...Assets we previously thought had a reasonable chance of success were recorded on the Balance Sheet as an asset. Those assets are now no longer in play so you have to get them off the Balance Sheet. To do that, you have to apply it as a 'cost' to your Income Statement. But it is non- cash - $7.2M of cash did not physically fly out the door.

You will note that Exploration and evaluation expenditure is up at $8M this year. That is up on last year as we had to fully expense Kohatukai ($4.6M). That was cash flying out the door, unfortunately. By the end of the last year it was deemed gas levels were not commercially viable, and all the cash spent needed to be (quite rightly) expensed all in one hit. But it is a one-off cost to Operating Earnings, and will not be repeated next year. In that light, if everything stayed roughly the same by June 2020, Owner Earnings would likely double to damn near $8M.

Depreciation/Amortisation attributable to NZOG is around $6M. That is probably about 3 times the CAPEX it currently requires to actually 'stay in business' (given most of the assets it holds is cash, and has small minority interests in the assets it holds that do produce).

So by the time you make a few adjustments here and there, the reality about NZOG's underlying performance is not too bad. Certainly not great, and we would prefer to have the cash deployed to increase earnings...however it would be foolish for the long term owner to be worried about the GAAP loss to NZOG of -$7.5M.

Underlying earnings are modestly positive, and we are in a great financial position to explore Ironbark (the main reason most of us are still affiliated with this company).

Oh, and the statements about all of the cash assigned to exploring Ironbark and in escrow...that is just noise that can be disregarded for our purposes. The cash is still there today (it hasn't vanished!), we still own that cash...and any genuine SoA offer wouldn't try to pretend otherwise.

Ok that's it from me for now! Hopefully helpful to some!

[fish]

Thanks for that clear interpretation of the truth behind the report.
With the AGM coming up I wonder if it is possible to try and get a shareholder and true believer in the future of NZO as a NZ company on the Board.
I talked to Digger about this a decade or so ago and he strongly agreed and was prepared to stand

[mistaTea]

I talked to Digger about this a decade or so ago and he strongly agreed and was prepared to stand

He would get my vote.

The current leadership are true believers in NZOG. They are extremely bullish on the medium-long term prospects.

It’s just that our Board is full of OGOG employees now, so their interests are not fully aligned with ours now. And it is perhaps inevitable that the ‘independent’ directors are now compromised (even though I am sure they are decent enough people who would very much love to remain truly independent).

[fish]

He would get my vote.

The current leadership are true believers in NZOG. They are extremely bullish on the medium-long term prospects.

It’s just that our Board is full of OGOG employees now, so their interests are not fully aligned with ours now. And it is perhaps inevitable that the ‘independent’ directors are now compromised (even though I am sure they are decent enough people who would very much love to remain truly independent).

Have just read the annual report.
Opens with the Chairman/CEO report-my reading is that it is written by OGOG and since they want to raise money on the capital markets-which will be a reach for a small company in the current environment-they kindly will buy our shares from us.
Personally I dont go along with this.
If a drill at Ironbark or clipper is successful raising money would be easy peasy.
Going back a decade NZOG raised money by issuing options-I know because I bought a few million.
I have been in touch with some of the top twenty shareholders and am unaware that any have been approached about this option

We have the money to drill Clipper and Ironbark.One of them is likely to be successful.Raising money will then be easy

[fish]

I would say not a dog show as OGOG has 70% and they call all the shots.I would last about 5 minutes as I do not have the rubber stamp qualities OGOG is looking for.In all businees matters I would follow the rules but when it came to a takeover I would act as an independent director.In fact I would recommend the takeover when the offer price is quadrupled.
So there you have it --- Better back a snowball in hell.
What is up with this looooong awaited booklet which is suppose to explain very clearly why we should have our shares stolen by OGOG. WAS A FEW COMMENT IN THE ANNUAL REPORT IT??????

The Northbridge Partners valuation is due later this month. I can,t wait to see it and will be reading it carefully to see if it is fair and reasonable.
I plan to read every sentence and dissect and analyse asap.

[digger]

The Northbridge Partners valuation is due later this month. I can,t wait to see it and will be reading it carefully to see if it is fair and reasonable.
I plan to read every sentence and dissect and analyse asap.

What do you mean --later this month. I thought the special meeting as later this month.Wouldn't put it past OGOG to have the meeting on or just before the valuation comes out.They will certainly be looking for every loop hold to shorten the interval between the two.

[RTM]

What do you mean --later this month. I thought the special meeting as later this month.Wouldn't put it past OGOG to have the meeting on or just before the valuation comes out.They will certainly be looking for every loop hold to shorten the interval between the two.

Can't see any definite dates but I do see this....

"Shareholders will be given the opportunity to vote on the scheme at a special shareholders’ meeting. No date has yet been set for that meeting, but New Zealand Oil & Gas anticipates it will be held in October 2019. "

From "31/7/2019, 8:30 am MKTUPDTE "

Yes...I would like to see the valuation as well. Its been very quiet.

[blockhead]

I think some have already seen the hand written version of the report, appears to be upward pressure on the sp at the moment.

That's surprising for NZO isn't it ??

[mistaTea]

\appears to be upward pressure on the sp at the moment.



Probably just fish buying up large.

[fish]

I think some have already seen the hand written version of the report, appears to be upward pressure on the sp at the moment.

That's surprising for NZO isn't it ??

I doubt it .The report is not likely to have been written yet .They will have had to value Ironbark and Canterbury Basin and need outside experts in this field.It is no easy task to value NZO but clearly there will be a big range in the valuation-must be over 78 cents minimum but the top end is where I have the difficulty

[blackcap]

Well wouldn't you know it. The price range is 0.62 to 0.84. This kind of self serving BS is just endemic of what happens in the NZ equity markets.

[fish]

Well wouldn't you know it. The price range is 0.62 to 0.84. This kind of self serving BS is just endemic of what happens in the NZ equity markets.
Not a surprise.
Misrepresentation of the truth-e.g. SRK have valued the chance of commercial success at Ironbark at 5%.
This may be true(but not 5% chance)-I cannot find the methodology of the valuation.
I do know that BP only invest if 50% chance of success.
This report is so flawed OGOG will not be getting my vote.
You have to vote against the vote in order to get a chance later at disputing the valuation.
In effect you would have to be stupid to vote in favour of the OGOG scheme.
I will also not go to wellington to vote and hear a biased presentation

[digger]

He who pays the piper calls the tune.

[RTM]

From the report....

"While an investment in an oil and gas exploration business such as NZO is inherently risky, shareholders may wish to consider their risk appetite for the Ironbark Prospect and NZO’s current and possible future exploration activities in evaluating the merits of the Scheme. "

I wouldn't think that very many invested in NZO without realising that it was "inherently risky". And so they already have a reasonable risk appetite.

[blackcap]

Its a BS report and we all know it. They know it, everyone knows it. Its just up to enough of us Shareholders to vote NO at the meeting.

[fish]

Its a BS report and we all know it. They know it, everyone knows it. Its just up to enough of us Shareholders to vote NO at the meeting.

I think mista tea is working out the numbers-I have close to a 7 figure number and know many others with lots of shares voting against
As you say we just have to vote-I am not sure if a shareholder who doesnt vote can be counted as voting in favour

[blackcap]

I think mista tea is working out the numbers-I have close to a 7 figure number and know many others with lots of shares voting against
As you say we just have to vote-I am not sure if a shareholder who doesnt vote can be counted as voting in favour

Yeah I am rallying all I know with shares to get out there and vote. Not that I know many. It would be a farce if a non-voting shareholder is counted as in favour. There will be plenty of non-voting shareholders unfortunately.

[mistaTea]

I think mista tea is working out the numbers-I have close to a 7 figure number and know many others with lots of shares voting against
As you say we just have to vote-I am not sure if a shareholder who doesnt vote can be counted as voting in favour

Hey fish.

I will take some time to digest the report this evening and share my thoughts for those who are interested.

I can tell you that If a shareholder does not vote then their vote is not taken into consideration. Not voting does not count as a YES.

So for us, we want as many people to vote NO as possible. Second best is for those on the fence (and possibly apathetic) to not vote at all.

We just need 25.01% of minority shareholders who do vote to vote NO to block the scheme of arrangement. So the more people who might have voted YES but don’t bother voting, the less NO VOTE shares we require to reach the 25.01% blocking vote.

[Fabs37]

Its a BS report and we all know it. They know it, everyone knows it. Its just up to enough of us Shareholders to vote NO at the meeting.

As pointed out in a couple of postings over the last 2 years since they took their holding to where it is atm.

The present move was quite obviously the plan since then.
Give it enough time for the S/P to drift and have friendly party/s at 40 - 45 cents buying up,
to make a good return and Vote in favour of present offer.

Chance of No votes stopping it, sadly very slim IMHO.

[blackcap]

As pointed out in a couple of postings over the last 2 years since they took their holding to where it is atm.

The present move was quite obviously the plan since then.
Give it enough time for the S/P to drift and have friendly party/s at 40 - 45 cents buying up,
to make a good return and Vote in favour of present offer.

Chance of No votes stopping it, sadly very slim IMHO.

Not that many shares traded in the 40-45 range though. In fact none did. So not sure if there are going to be enough YES votes. 75% is quite a large threshold.

[trader_jackson]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12266098

Quite glad I sold out in November 2016 at 64 cents... although quite sad really as this takeover of another NZ firm looks to be basically a done deal with OGOG already having a 70% holding, and 75% required - meaning only 5% of the remaining 25% need to vote in favour for it to proceed (is that right)

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12266098

Quite glad I sold out in November 2016 at 64 cents... although quite sad really as this takeover of another NZ firm looks to be basically a done deal with OGOG already having a 70% holding, and 75% required - meaning only 5% of the remaining 25% need to vote in favour for it to proceed (is that right)

Wrong. 75% of Minority Shareholders have to vote in favour for this to pass. Given the low price offered, the chances of OGOG getting enough votes from minority holders are slim.

OGOG's 70% holding is irrelevant.

[trader_jackson]

Wrong. 75% of Minority Shareholders have to vote in favour for this to pass. Given the low price offered, the chances of OGOG getting enough votes from minority holders are slim.

OGOG's 70% holding is irrelevant.

Ah ok, and how much % does management hold? They look to be all voting in favour...

[blackcap]

Ah ok, and how much % does management hold? They look to be all voting in favour...

Will management even be allowed to vote? Or is it just the directors and O& G associates that are not allowed to vote?

[mistaTea]

Have had some time to read over the details and digest it all.

The valuation from Northington is the only thing of interest to me. Ultimately, their valuation method is flawed (imho). Trying to break all of the parts up in the way they have, and then attributing little or no value to the exploration assets (with a combined prospective discovery potentially being over 26 trillion cf of gas...) makes no sense to me.

A business owner would not view his company that way. A trader, looking for a quick win - maybe. But not the long term owner. To be fair to the SoA, they clarify that this is not financial advice, and does not consider individual investment objectives.
It is clear to me that OGOG have valued the company in the most pessimistic way in an effort to buy us out cheap. I think they will be unsuccessful, and will regret not being more generous (especially if a big discovery is made). An offer at the top of the range would have only cost them an extra $10M or so - chump change for OGOG given the enormous upside. That would have made it much easier to get YES votes, as they could have told a much better story to the market. As it stands, even Northington have said that the offer is "not compelling".
Not for me to say how they should make their investment decisions, but if Ironbark is successful...they will be gutted that they were so tight on the SoA, and now have to share the bounty with us.

Anyhow,

So let's point out a few of the issues, as I see them (for what it's worth):

1. They claim that NZOG only has $74M in cash after deducting funds owed to Cue as part of the Ironbark investment. That is misleading because NZOG also owns half of Cue's A$26M cash (today that would be approx NZ$14M attributable to NZOG). So when you add that back in, you have $88M in cash alone, with no debt. Roughly $4M was paid to Cue as part of the Ironbark deal...given we own half of Cue, we effectively paid ourselves half of that ($2M). So add that back in since we still own that cash... and now you have $90M of cash alone, attributable to NZOG.

In other words, the value of all production assets between NZOG and Cue, as well as their exploration permits (two of them are potential monsters) are effectively valued at $12M (based on the low range).

2. Their valuation for Cue as a whole is about $10M or so lower than the current market cap. The Australian market clearly disagrees with Northington in terms of what Cue is worth. Even using the lower Cue market cap at 21/08/19, Northington still think the Aussies are all wrong.

3. Zero dollars to very small dollars attributed to Clipper and Ironbark. Even if we forget about Clipper for now (as there is regulatory uncertainty at the moment) and just focus on Ironbark...a discovery of 15T cf of gas would immediately push NZOG's market cap well over $1 Billion dollars. Of course there is risk in exploration - that is part and parcel of owning an oil and gas exploration company. To suggest that we should give away an exploration permit of that magnitude - which has an enormous upside potential - for $3M is nuts. A rational business owner would not do that.
And BP has taken a huge % of the equity in Ironbark and agreed to be Operator. That does not guarantee success, but it is as positive a sign you are ever going to get that there is a better than average chance of a meaningful discovery.

To sum up, I think it is best to do a little thought experiment.

Imagine you are the only owner of NZOG, as a private company. All assets are exactly the same as now.

After taking into account a deal you have done with your subsidiary (Cue) for Ironbark, you still effectively have $90M of cash attributable to your business. No debt, you don't owe anyone a damn thing. You have existing production assets that keep enough money rolling in to pay all your bills and even have some extra cash at the end of each month.
You have just signed a massive deal with BP and Beach energy to participate in the drill of the century. BP and Beach are excited, and you are excited too having extensively studied the various surveys of Ironbark. Within a year you are going to drill...after all your hard work getting the deal in place, you can finally see light at the end of the tunnel...and this could make your business worth billions, depending on the size of a discovery...

If someone knocked on your door in that situation and offered you $102M to purchase your company, what would you do?

It is my view, that a rational business owner would say thanks but no thanks. Possibly something much less polite!

I will still be voting no.

[BigBob]

"All shareholders are strongly encouraged to vote on the scheme. To approve the scheme, 75% of the votes cast in each interest class must be voted in favour. All shareholders other than OGOG will comprise one interest class. OGOG will comprise a second interest class. This means that the scheme will only proceed if 75% or more of the votes cast by the minority shareholders support it. Shareholders may vote in person at the special meeting, by postal vote (including online), by proxy or by corporate representative."

According to my calculations:

Total shares on Issue: 164,430,718
OGOC (as per annual report): 114,876,016 (interest class 2)
All other shareholders: 49,554,702 (interest class 1)

25% of interest class 1: 12,388,676.

So we need at least 12,388,677 to vote against or not vote.

It would be interesting to know approximately where the no vote is at, but judging by comments here, that may be doable...

It would, of course, also be possible to buy a few extra shares prior to the meeting to vote against if it is close....

[Beagle]

Is this the same Northington that was engaged by Geneva Finance to give management the valuation they wanted ?
If so Northington for the record valued Geneva Finance at approx. 38 cents for the purposes of a restructure and the shares never traded above 13 cents per share post restructure. (Geneva finance subsequently have had a 10:1 share consolidation).

[mistaTea]

So we need at least 12,388,677 to vote against or not vote.

.

Yes, and that number assumes 100% of the minority class vote. The reality is well less than 100% will participate, so the number of NO votes required will be less than the 12.4M you have stated. Best to plan for the worst case scenario though.

I am not going to get into it on here as John Pagani follows this forum. Though I maintain a respectful relationship with John, at this junction the less he knows about what I am doing behind the scenes, the better.

But I have every reason to be cautiously optimistic right now.

[BigBob]

Yes, and that number assumes 100% of the minority class vote. The reality is well less than 100% will participate, so the number of NO votes required will be less than the 12.4M you have stated. Best to plan for the worst case scenario though.

I am not going to get into it on here as John Pagani follows this forum. Though I maintain a respectful relationship with John, at this junction the less he knows about what I am doing behind the scenes, the better.

But I have every reason to be cautiously optimistic right now.

Sounds good mistaTea - I don't have your insights and don't know what you're planning, but just looking at the numbers, it does look quite promising.

I no longer hold that many, but rest assured the ones I still do hold will be voted against...!

[fish]

Sounds good mistaTea - I don't have your insights and don't know what you're planning, but just looking at the numbers, it does look quite promising.
no longer hold that many, but rest assured the ones I still do hold will be voted against...!

Their derisory and misleading scheme will fail by a big margin


I

[Chippie]

This must be borderline criminal. I hope the directors remember what happened with the Mainzeal directors.
They must be more confident of succes at Ironbark than 5%. And to think shareholders are not aware of the risks is insulting.

[fish]

This must be borderline criminal. I hope the directors remember what happened with the Mainzeal directors.
They must be more confident of succes at Ironbark than 5%. And to think shareholders are not aware of the risks is insulting.

Agree that the independent directors recommending the takeover must know how flawed and misleading the report is .
They have a duty to all shareholders .
BP would not do an expensive deep water exploration drill if the chance of success was only one in twenty.They have a track record of greater than 1 in 2 success.Would NZO do this if the chance of success was only one in twenty so clearly they must know this report is very wrong

[tim23]

I had a quick read but to say the offer falls within the range is misleading - I would say 6c lies between 5c and 10c but I would say 5c does not so their logic that 62c lies between is insulting.

[rooster]

Small time holder here with circa 14000 shares. Definitely voting NO. I want in on ironbark and it is the main reason I hold. Can't trust our BOD after all of this. Insulting alright. Shame on them.

[Marilyn Munroe]

I am worried about Northington Partners.

If it becomes widely known they are the go-to people when you are shopping for a report which sees things your way they will be reduced to writing whitewash reports on ethical failures by cabinet ministers.

Boop boop de do
Marilyn

[Wiremu]

Interesting that Northingtons have dropped the Liquidation Valuation that they used in their 2017 Takeover offer valuation.

Don't overlook that we have the right to oppose the scheme by appearing at the final court hearing. Page 5 and later in the booklet.

[fish]

Interesting that Northingtons have dropped the Liquidation Valuation that they used in their 2017 Takeover offer valuation.

Don't overlook that we have the right to oppose the scheme by appearing at the final court hearing. Page 5 and later in the booklet.

Special meeting is 16/10/19
Final court hearing 31/10/19
papers opposing scheme have to be filed by 21/10/19

[fish]

Interesting that Northingtons have dropped the Liquidation Valuation that they used in their 2017 Takeover offer valuation.

Don't overlook that we have the right to oppose the scheme by appearing at the final court hearing. Page 5 and later in the booklet.

Dropping the liquidation valuation is yet another example that the report is not fair and reasonable

[fish]

Interesting that Northingtons have dropped the Liquidation Valuation that they used in their 2017 Takeover offer valuation.

Don't overlook that we have the right to oppose the scheme by appearing at the final court hearing. Page 5 and later in the booklet.

Dropping the liquidation valuation is yet another example that the report is not fair and reasonable.
There are so many discrepancies that I feel we should notify the takeovers panel at this stage in order to get a truly independent valuation

[blackcap]

Dropping the liquidation valuation is yet another example that the report is not fair and reasonable.
There are so many discrepancies that I feel we should notify the takeovers panel at this stage in order to get a truly independent valuation

Can I make another suggestion that someone with a bit of skin in the game contacts the NZSA and also requests media be apprised and present at the meeting.

[couta1]

Welcome back blackcap.:)

[mistaTea]

You should have received an email from NZOG with instructions on how to cast a postal vote via Computershare.

Get in there and VOTE.

If you agree with me, please vote AGAINST.

If you disagree with me - please ABSTAIN :t_up:

[blackcap]

Cheers Couta1.

Just voted AGAINST.

The meeting is going to be interesting that is for sure.

[RTM]

You should have received an email from NZOG with instructions on how to cast a postal vote via Computershare.

Get in there and VOTE.

If you agree with me, please vote AGAINST.

If you disagree with me - please ABSTAIN :t_up:

Done. Voted against. 17K shares only, I guess it all helps.
Thanks to all who have commented on the thread. Appreciate the perspectives.

[Lion]

Dirty deeds here, eh?
Independent (as in valuation and directors) has just acquired a new meaning.

50,000 shares just voted against.

[fish]

Dirty deeds here, eh?
Independent (as in valuation and directors) has just acquired a new meaning.

50,000 shares just voted against.

Its good to see long-term supporters and shareholders of NZO voting against this derisory and misleading offer.
I hope to look forward to the thrill and drill of Ironbark rather than being part of a high court case on the 31/10/2019
(every shareholder has a right to be heard so this could take sometime if it eventuated)

[Bart]

Only 20,000 shares, but just voted a definite NO against this highway robbery. Anyone knows how to reach other 'dormant' shareholders so they can be made aware of this?

[digger]

Only 20,000 shares, but just voted a definite NO against this highway robbery. Anyone knows how to reach other 'dormant' shareholders so they can be made aware of this?

When we get this long awaited booket and have considered it,then vote if you haven't already. Vote against or get ripped off.. At that point a few of us working quitely now will put into action just what you have mentioned.
Watch this space.

[digger]

Can I make another suggestion that someone with a bit of skin in the game contacts the NZSA and also requests media be apprised and present at the meeting.

I am a member of NZSA and have skin in the game. Next Tuesday we have a meeting of the Waikato branch of NZSA. Will put your points to them.

[fish]

I am a member of NZSA and have skin in the game. Next Tuesday we have a meeting of the Waikato branch of NZSA. Will put your points to them.

Thats good Digger.
When researching last night I found the NZSA had put in a submission about their concerns over the change to the takeovers code with schemes of arrangement.
I feel the takeovers panel need to be alerted sooner rather than later.

[mistaTea]

Was just perusing the 2017 Annual Report for Cue Energy (some guys like to read dirty magazines, I like reading Annual Reports. Don't judge me).

Found this little gem: "Cue’s estimate of the geological chance of success for this giant prospect is 25% and the value that a success would bring to the company is many times Cue’s current market value.BP shares our enthusiasm for WA-359-P and Cue has granted them an option over 42.5% equity, exercisable by the end of October 2017."

This was badk in 2017, before BP and other partners had signed on the dotted line. Even back then , they put the odds at 25%.

Given BP, Beach and NZOG all readily signed up in the end, one would not be ridiculous for speculating that the most recent geological surveys suggested a large find with odds greater than the 25% estimated in 2017.

Fish's friend (now retired, but used to be heavily involved in the industry) reckons BP don't piss around with Deep Water Exploration like this unless the odds are 50% or greater of success. Now, I have no way of confirming that one way or the other...but it certainly doesn't sound ridiculous.

Regardless, it highlights what an insult it is for Northington to base their calculations on 5%, and keep a straight face.

[Lion]

In page 9 of the recent report, in the Chair's letter, (right before that notorious 5% you mention above, mistaTea), it says "Ironbark has the cost and uncertainty associated with deepwater frontier exploration"

Is this frontier territory? I don't think so. It's in the prolific Carnarvon Basin (mis-spelt by Northington many times - sloppy work, guys) and close to proven, operating fields, not to mention close to LNG plants.

[mistaTea]

In page 9 of the recent report, in the Chair's letter, (right before that notorious 5% you mention above, mistaTea), it says "Ironbark has the cost and uncertainty associated with deepwater frontier exploration"

Is this frontier territory? I don't think so. It's in the prolific Carnarvon Basin (mis-spelt by Northington many times - sloppy work, guys) and close to proven, operating fields, not to mention close to LNG plants.

Certainly the first time I have ever heard of this particular permit being referred to as 'frontier'. It would appear, on the surface at least, to be creative use of language to try to make it sound like exploring Ironbark is riskier than it most likely is in reality (hence 5% being a perfectly reasonable probability of success to use!).

Deep water, certainly. But not sure I would describe it as 'frontier'. Though I stand to be corrected - if anyone can show me a definition of 'frontier' that shows that Ironbark fits the bill I will have learned something new today :t_up:

[rooster]

15000 shares here, have voted against.

[RTM]

When we get this long awaited booket and have considered it,then vote if you haven't already. Vote against or get ripped off.. At that point a few of us working quitely now will put into action just what you have mentioned.
Watch this space.

Does anyone know....
how many shares are eligible to vote ?
Is there anyway to see progress ?
Sadly....this is almost as interesting as the up coming exploration.

[mistaTea]

Does anyone know....
how many shares are eligible to vote ?
Is there anyway to see progress ?
Sadly....this is almost as interesting as the up coming exploration.

If everybody voted, there would be around 49 million or so eligible minority votes. That would mean that you would need around 12.3 million AGAINST votes to block the SoA if everyone voted.

Not everybody will vote though. Some who do vote (but are on the fence) may elect to ABSTAIN too. So in reality, less than 12.3 million votes are required (I hate to guess what % voter turnout there will be, and prefer to therefore plan for the worst case scenario).

As at the last Annual Report, there are 5,680,248 shares belonging to shareholders who hold parcels of 4,999 or less. I have no idea how many of these shareholders will vote...but I would speculate that the majority that do vote would vote against this deal.
Why? Because they have little to lose and everything to gain by seeing out the Ironbark drill. An offer of between 1 - 3 grand for most of these shareholders is unlikely to entice them to give up a prospect that could potentially be worth tens of thousands of dollars to them in a year or so. This is how I think a logical investor would behave (I make no predictions for speculators as that is outside my wheelhouse).

You have another 3,378,574 who hold baskets between 5,000 and 9,999. I would wager that a reasonable number of those who vote would be thinking the same way.

Then you have your larger investors, with much more skin in the game who view themselves as long-term business owners. Large holders with parcels greater than 500,000 shares (but excluding OGOG) total 15,881,683 shares outstanding. These holders will be highly likely to vote, and many have been shareholders for some years. They could have sold out beforehand if they viewed the company prospects as dire, and I have good reason to believe a significant portion of these holders are very bullish on Ironbark.

Share price means nothing to them other than a buying opportunity when it is ridiculously low, and a selling opportunity when it is unreasonably high. Beyond that, they just want to sit quietly and own the business. I know for a fact that a large chunk of these investors are underwhelmed (putting it mildly) by this offer, and will vote AGAINST.

It will all boil down to the investment philosophy that the majority of the minority shareholder base adheres to. There will be a number of shareholders who bought at the low point and, for one reason or another, are happy to grab a 25% gain and go on their merry way.

But I think OGOG making comments about this being the last Annual Report (as though they are extremely confident of getting their low offer through...) is incredibly premature.

I can't say too much more at this junction, but as I have said before - I remain very much cautiously optimistic.

[Not too Flash]

If you wanted the cash why not just sell on the market @ 62 or 63 cents and pay a little brokerage rather than vote Yes and wait

160,000 and NO NO NO for me

[freddagg]

I just added up the ones I control, came to 82000, they will be voted NO.


https://www.youtube.com/watch?v=RDXTJa6TrKE

[BigBob]

My 55,000 have also just said No...

[Vaygor1]

..... But I think OGOG making comments about this being the last Annual Report (as though they are extremely confident of getting their low offer through...) is incredibly premature.
...

I would say incredibly arrogant.

Have voted NO as has my ol' mate

[CD_CHCH]

Our paltry holding has just voted NO to the scheme as well. Even if they came back with a much higher offer now (say $1.00+ per share for example) we would rather remain as shareholders and see Ironbark through to a hopefully successful conclusion.

[Joshuatree]

I havnt received voting forms atpit, can one do it online , any links ,thanks.

[RTM]

I havnt received voting forms atpit, can one do it online , any links ,thanks.

https://www.computershare.com/nz

If I recall right I went into messages and there were a few companies I voted for including NZO.
Top right.

[BWH]

I don't often vote, but our paltry 30k holding just voted against.

[Sideshow Bob]

I would against (with my embarrassingly small holding).

Every little helps, right??

[fish]

I would against (with my embarrassingly small holding).

Every little helps, right??

Absolutely.
To neutralise your vote ogog needs 3 times as many

[mistaTea]

Absolutely.
To neutralise your vote ogog needs 3 times as many

Great way of looking at it fish, and I agree - every single vote counts.

I wish I could share more - but we are closer than you guys probably realise. In fact, depending on voter turnout we may have already defeated this offer.

So if you know of any other friends and family with shares (regardless of how big or small) that usually don't vote - strongly encourage them to participate in this one.

[Lion]

Well that’s encouraging, mistaTea, although we mustn’t count chickens before they are hatched.
This is like a David & Goliath story, and I’m afraid the company have now made themselves into some kind of adversary of minority shareholders by their actions. Trust lost is difficult to regain.


So, what’s next? Does anyone here know the details of the takeover law in this situation? Can the Co make an increased offer? I had a feeling they had to wait before being allowed to do so. Time would be on our side there, as Ironbark drilling gets closer.


Our Independent Chair, Rosalind Archer, says in the recent report that exposure to Ironbark is available to investors by buying CUE. Fair enough. I did so, some time ago, and (not meaning to skite here) they have gone up by over 60% since I did. Then I thought what if OGOG want to take out CUE too? So the remaining partner in Ironbark (apart from BP) is Beach Energy and a month ago I made a modest investment in them too. They are too big to be bought out, even by OGOG, you’d think, although other big Aussie oilers are rumoured to be sniffing around. I wish now I had bought more, as they have gone up 32% in the month since I bought. (Still not meaning to skite – I’ve had my share of dogs in Aussie oilers, I can tell you!) But on the Hot Copper BPT chatsite, Ironbark is rarely mentioned. BPT has a market cap of around $4b, but a success at Ironbark would still be significant to them.


But retaining my NZO shares through to drilling is what I really want.

[mistaTea]

Well that’s encouraging, mistaTea, although we mustn’t count chickens before they are hatched.
This is like a David & Goliath story, and I’m afraid the company have now made themselves into some kind of adversary of minority shareholders by their actions. Trust lost is difficult to regain.

****


Our Independent Chair, Rosalind Archer, says in the recent report that exposure to Ironbark is available to investors by buying CUE.


But retaining my NZO shares through to drilling is what I really want.

Rosalind needs to refrain from giving financial advice. She is effectively saying - "Don't you worry about this disappointing offer that significantly undervalues NZOG...just take the money now anyway, and if you really want to still participate in Ironbark you can buy Cue's shares! I have no idea whether the share price of Cue is currently a discount to intrinsic value, but hey! You would probably still be just as well off! ".

That is insane. All that matters is whether or not 62 cents per share represents a fair value for NZOG. The fact one may be able to gain exposure to Ironbark through a different vehicle is completely irrelevant and just the executive clutching at straws to make the deal sound reasonable.

[Fabs37]

although we mustn’t count chickens before they are hatched.
AGREE
While certainly applaud the effort by a number of members to the enlightenment of particularly to small S/Holders.and good on you.
What should have been obvious to most astute investors, there are however aspects to this outfit apart from what i would call gall or chutzpah.
That the policies of this Forum could get one debarred if mentioned.
So lets just leave it at They are not NOVICES.
Possibly they are also targeted for a T/O
Time will tell.
.

[RTM]

although we mustn’t count chickens before they are hatched.
AGREE
While certainly applaud the effort by a number of members to the enlightenment of particularly to small S/Holders.and good on you.
What should have been obvious to most astute investors, there are however aspects to this outfit apart from what i would call gall or chutzpah.
That the policies of this Forum could get one debarred if mentioned.
So lets just leave it at They are not NOVICES.
Possibly they are also targeted for a T/O
Time will tell.
.

We are lucky to have this forum to communicate with. Be lost without it.

[Vaygor1]

Cue presentation out yesterday.
Ref https://www.asx.com.au/asxpdf/20190911/pdf/448fpw7t0jz6fv.pdf

NZO has one of their independent Directors also on the Cue Board. I'll leave the reader to draw their own conclusions from this.

Cue's Presentation and recent Annual report both headline Ironbark and provides further commentary. The light in which Ironbark is cast in Cue's literature is very much at odds to the near silence and gloominess of the prospect in NZO’s annual report and the SoA.


Example:

CUE's Annual Report for the year ending 30 June 2019, the CEO report and overview states:
"The prospect size and proximity to infrastructure of Ironbark means that, if successful, it has the potential to significantly change the value of Cue."

..... and now according to NZO’s SoA, it is a Frontier site. 'Frontier' is defined by the Oxford dictionary as "the extreme limit of understanding or achievement in a particular area".

[Vaygor1]

Another area of note where Cue and NZO have a different take from each other is the Wortel field.

The 2019 NZO Annual Report's headline graph under 'Production' shows the Wortel field fully depleted by 2029. No mention of any work being undertaken to extend the life of this field, or its current contribution that I can find anywhere in this report unless I've missed something.

Queue the Cue report (pun intended) for 2019. Right off the top under the CEO Report and Overview of Operation and Finances section:

"Planning is currently underway and development of the Paus Biru field will provide both a new revenue source and extend the life of the existing Oyong and Wortel field."

and

"Oyong and Wortel fields continued to be strong contributors to Cue’s cash flow in their first full year of production as gas only fields, with steady production and significantly reduced costs."


So what else are we missing from NZO?

[mistaTea]

So what else are we missing from NZO?

Yes. the recent NZOG reports have been scant on detail around Ironbark. Considering how effusive Andrew Jeffries was as recently as June about Ironbark (when announcing the farm-in agreement), I was hoping for a lot more colour around our largest exploration asset.

Not sure what else we are missing from NZOG....but I can tell you what we are missing from OGOG - a decent offer.

Here is a summary of how I would value the business for the purpose of a takeover (for what it is worth to anyone who might be vaguely interested in my thoughts on business value). My reasoning assumes the majority shareholder is acting in good faith, and understands that some premium must be paid to take 100% control.


NZOG cash balance at last Annual Report= approx $78 million (NZ$106M consolodated - NZ$28M Cue Energy share). Approx 47 cents per share.
Kupe = $24 million (low figure from Northington for this part is not unreasonable based on current reserves). Approx 15 cents per share.
Cue Energy: Current Market Cap = NZ$72 million. Price has increased somewhat after Ironbark farm in announcements, so this is probably a decent enough figure for what the market feels Cue is worth, given Ironbark is now fully funded and in play. NZOG share = NZ$36 million (22 cents per share).

So before we have even worked out what the exploration assets are worth we have 47c (cash) + 15c (Kupe) + 22c (Cue) = 84 cents per share. That is what I would consider a reasonable offer just for the existing assets that NZOG control.

Now let's talk about exploration.

Ironbark. It can be shown that a very conservative estimate of potential earnings attributable to NZOG for a 15Tcf find is NZ$1B. It would most likely be closer to double that. In 2017 Cue estimated the chance of success at 25%. We have strong reason to believe this probability of success has significantly increased due to BP, beach and NZOG farming in with large pieces of the equity each (especially BP).

But for our purposes, we can still use the 25% probability. 25% * conservative NZ1B = $250 million. But OGOG would be taking on all of the risk, so we can't expect them to pay all of that. Not even half actually.
A reasonable offer for Ironbark, given how advanced the exploration permit is and the encouraging signs so far, would then be about NZ$100M (61 cents per share).

Clipper. The Barque prospect is estimated to be about 75% of the size of Ironbark. However, there is more uncertainty given the current government policy. Also, the existing infrastructure near Ironbark does not exist near Clipper. So there would be additional costs to extraxct, store and ship the gas onshore.

For this reason we can't just say 75% of Ironbark. 50% would be more reasonable = $50M (30 cents per share).

Ok, so we have 84 cents (existing assets) + 61 cents (Ironbark) + 30 cents (Clipper) = $1.75 per share.

This is what I think a reasonable starting point would be for a majority shareholder to offer minority holders to take full control of this business.

Oh and, to whoever is reading this representing OGOG...now that you have learnt how to view the value of the assets through the eyes of a business owner - it's not too late to increase your offer appropriately :t_up:

[airedale]

I hope that someone from the NZ Shareholders Association is reading this thread.

[Wiremu]

Also interesting that Beach Energy refers to Ironbark as one of their low cost - high impact exploration activities.

Another is Werry which is close to NZOG's Clipper. OGOG farmed into Beach's New Zealand prospect containing Werry on 24 July 2019 despite all of their negativity in the Scheme of Arrangement documentation. In doing so they effectively contradict all of their own talking points.

[mistaTea]

With regards to the valuation - something else that appears in the workings that is completely alien to me as an investor... (as in, I have never ever even heard of this in everything I have studied around working out business value...)

After working out what everything is worth....apparently we need to deduct 17 cents per share (roughly $28 million) from all of our assets. "Corporate Overheads" projected until at least 2027.

In other words, they expect us to pay for NZOG staff's salaries + some one-off Ironbark costs (as part of the deal with Cue) up until 2027, even though we would no longer be owners from October 2019.

***

Like, if you owned a rare painting that I wanted to buy - and let's say we could objectively agree that your painting is worth $1 million. But hang on! Not so fast! I am an art dealer, and you need to pay towards my salary for the next 10 years! Your portion of that is 150,000! (Don't worry thought - I did a NPV calculation and discounted my earnings at 10%!)
There is also a one-off shipping and storage cost of $50,000!

Sorry matey, you need to sell me your $1 million painting for $800,000. It's only.... fair after all *Cheshire grin*

[Lion]

Thanks mistaTea and others for your excellent analysis here.
There hasn't been a single post in favour of the SoA (as far as I know) nor any comment from our General Manager Corporate Services, John Pagani, on the subject.

[digger]

I am a member of the NZSA and have just emailed them about getting some contact now that the Northington's report is out. I spoke to them two months ago but they felt it best to wait the report.
I will be going to the next meeting on Tuesday the 17th in Hamilton.
Lets see what we can do.

[digger]

I havnt received voting forms atpit, can one do it online , any links ,thanks.

Have many had this problem. I did not have mine by yesterday so got onto computershare and they gave me a special number,so I voted today against.
What I thought was strange was that computershare said it had only just arrived from NZO this morning. You would think all would come to computershare on the same day.
Now yesterday afternoon I was on the phone and asking outright was there some block on my shareholding as everyone else had received theirs.It is well known by nZO that I am anti this attempted theft by OGOG. Then presto it is suddenly all there this morning.

[fish]

I am a member of the NZSA and have just emailed them about getting some contact now that the Northington's report is out. I spoke to them two months ago but they felt it best to wait the report.
I will be going to the next meeting on Tuesday the 17th in Hamilton.
Lets see what we can do.

Good Luck with that.Its worth a go.
I didn,t renew my subscription after I got no practical support with the Sea/TTP case.We won the arbitration but then they appealed.Hiring a QC for the appeal-which we won with costs-isnt cheap but it was worth it.

[mistaTea]

Tried to rack my brains around this "Corporate Overheads" thing last night and this morning on the way to work. Sometimes it takes a while for things to sink into my thick skull.

So, getting back to the 17 cents per share we have to pay for Mr Jeffries and others to enjoy their salaries for 8 more years after we are no longer owners of the business... to further highlight how ridiculous this is in my view, we would need to pro-rata that 'cost' over all existing assets.

If you remember from a previous post of mine (https://www.sharetrader.co.nz/showthread.php?5112-NZ-Oil-amp-Gas-(NZO)&p=771228&viewfull=1#post771228) I demonstrated what I think a more reasonable value for the business is. The first part provided a value for existing assets only.

OGOG and their mates at Northington reckon the business is only worth 62 cents per share. We know that NZOG hold 47 cents per share in cash alone at the last report with no debt (this does not include the portion of Cue's cash that we own).

So 47/62 = 75%. Our cash asset alone is worth 75% of the total value of the business apparently.

So we are being told we need to apply 75% of the "Corporate Overheads" cost to our cash position then. 17 cents per share * 0.75 = 12.75 cents per share.

47 cents - 12.75 cents = 34.25 cents per share.

Still with me? Ok, then...

34.25 cents per share * 164.4 million shares outstanding = $56.3 million.

So you see, because you are a moron like me you probably thought the $78 million in the bank is worth $78 million. But it is only actually worth about $56 million! And that is all we should hope to get for it!

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZO/340892/307578.pdf

[blackcap]

Looks like some ppl might be compromised. Well i guess they want to keep their job but really this is a bunch of spin.
The meeting will be interesting.

[mistaTea]

Oh right, so they still expect everyone to believe BP are participating in such a big way based on a 95% probability that, even if hydrocarbons are discovered, it is 95% probable that it will not be commercially viable?

Honestly, we must look pretty stupid because we are definitely being treated like idiots.

Why the hell would NZOG want to to stump up $20M of our money plus carrying costs to Cue based on such miserable odds?

Absolutely absurd. The whole thing.

[digger]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZO/340892/307578.pdf

If the chance of success at Ironbank is really so low then it would be in OGOG best interest to drop the SOA and spread the expected loss over all the NZO shareholders. Prior to the Northington release I thought the report would down play the chance of success to say 30% from a realistic likelyhood of 60%,to make the 62 cent offer look good.Guess OGOG thinks we are just idots so any figure will do.

I also pretty well guessed that the independent directors and managment were buttering their own bread by backing this extremely low offer. But 8 years of free salary just shows the contempt that they hold for shareholders. Now why did none of they stand up and say no let give 8 years dividend to the shareholder even after they sell out. Same thing--just butters someone else bread.

[airedale]

Re this statement from the "independent" directors: Two thoughts spring to mind. "Speaking with forked tongue" or "Talking out of both sides of one's mouth".

[Joshuatree]

Managed to vote just now after many hurdles and time wasting, no emails or snail mail from computershare etc.Finally got hold of a real person and got given the access code.
NZO certainly isn't acting like its interested in exploring and discovering and producing oil anymore, something suss there imo.Its Risk off ehhh lol.

[RTM]

Managed to vote just now after many hurdles and time wasting, no emails or snail mail from computershare etc.Finally got hold of a real person and got given the access code.
NZO certainly isn't acting like its interested in exploring and discovering and producing oil anymore, something suss there imo.Its Risk off ehhh lol.

Is that because you don't have a signin with computer share ?
I didn't need a code....wondering if I did it properly ?

[digger]

Is that because you don't have a signin with computer share ?
I didn't need a code....wondering if I did it properly ?

Yes it will require a watch on how this voting goes. Anyone who can justify granting themselves 8 years free salary when they are no longer employed is prepared for any dirt work. I will ask NZSA to keep an eye on the vote counting. Also we should get everyone here to record there vote to see how it adds up. Might be very different from wha gets reported.
I no longer trust anyone at NZOG or OGOG anymore after this Northington release. And why would anyone.

[Joshuatree]

MY vote against.

[Beagle]

If the chance of success at Ironbank is really so low then it would be in OGOG best interest to drop the SOA and spread the expected loss over all the NZO shareholders. Prior to the Northington release I thought the report would down play the chance of success to say 30% from a realistic likelyhood of 60%,to make the 62 cent offer look good.Guess OGOG thinks we are just idots so any figure will do.

I also pretty well guessed that the independent directors and managment were buttering their own bread by backing this extremely low offer. But 8 years of free salary just shows the contempt that they hold for shareholders. Now why did none of they stand up and say no let give 8 years dividend to the shareholder even after they sell out. Same thing--just butters someone else bread.

Yea I don't follow any more mate, I was merely posting the link as a service to others.
This company has just been a vehicle for directors and management to further their own interests for a very long time. Remember the days of the old United resources and Mineral resources and all the cross shareholdings to protect the company from a takeover ? These were my first investment way back in 1982... I think it was at a $1 at that time. According to the Reserve bank $1 in 1982 in inflation adjusted terms is worth $3.85 today. With very few dividends over the last 37 years this just shows you what a shocking destruction of shareholder wealth various directors have been responsible for over the last few decades.
In some ways this thing just deserves to be pout out of its misery but I hope shareholders can extract a better deal.
Don't underestimate how passive many shareholders are though...many just accept what the so called independent directors say like placid school children listening to their teacher.

[Sideshow Bob]

Is that because you don't have a signin with computer share ?
I didn't need a code....wondering if I did it properly ?

You should have got an email confirmation of your vote.

I just had to enter my postcode and was in.

[Lion]

Beagle, for accuracy, the dividends have been not too bad since I've been a shareholder.
On the Co's website are listed the divs between 2008 and 2017 (inclusive) They total 48c per share.
I can't find any figures for before that period and of course there have been none in the last two years.

Can anyone answer my question about what OGOG can do if this SoA fails?

[RTM]

You should have got an email confirmation of your vote.

I just had to enter my postcode and was in.

Yes...just checked....I did. Recorded as against.
Surely this process, counting included, is automatic...at least for those who vote No on line.

[Beagle]

Beagle, for accuracy, the dividends have been not too bad since I've been a shareholder.
On the Co's website are listed the divs between 2008 and 2017 (inclusive) They total 48c per share.
I can't find any figures for before that period and of course there have been none in the last two years.

Can anyone answer my question about what OGOG can do if this SoA fails?

Probably because there were none before 2008. From memory and I am really stretching my grey matter to recall but I don't think dividends featured much if at all in the 1980's or 1990's with this one.

[etnom]

Really sad to see the so called independent directors being really dependent in ripping off the very same shareholders they are there to protect.


"What is the last day for registering our vote against."

[fish]

Beagle, for accuracy, the dividends have been not too bad since I've been a shareholder.
On the Co's website are listed the divs between 2008 and 2017 (inclusive) They total 48c per share.
I can't find any figures for before that period and of course there have been none in the last two years.

Can anyone answer my question about what OGOG can do if this SoA fails?

Its all in the takeovers code-eg they could do nothing,they could creep,they could make a full takeover bid and if they acquire 90% shares compulsively acquire the remainder.

If they did the latter and you vote against then arbitration and you get a fair and reasonable price with ogog paying costs and interest.


My reading of the code is yet again they have today on the nzx engaged in misleading information.There is always 2 side to any story and they deliberately have not stated the preferred value indicated by srk.

It is the directors duty not to engage in any activity that is misleading.If I was them I would be getting another legal opinion. With SEA holdings and TTP their lawyers got it completely wrong

[fish]

Thanks fish.
And Beagle, there have been two substantial buybacks in my time too, so it's very hard to know just where one stands with regards dividends and average cost price.

But we know how things stand with the company now, don't we?

I have a theory about the game they are playing but it would be inappropriate to share it on this forum.
The preferred value for nzo stake in Ironbark on the pkf report is A$53.55 million-and it states that is conservative taking
account of the geological and technical uncertainty.That report of course was well before the go ahead for the drill.Who knows how much greater it would be now.

[mistaTea]

"The independent directors also take this opportunity to comment on Cue’s previous statements indicating that Ironbark has a “25% chance of success”. It should be noted that this figure refers to Cue’s assessment of “geological success” – i.e., the chance that hydrocarbons will be found in the geological structure. It does not measure the chance of “commercial success” – i.e. that any such discovery will then be capable of economic commercial exploitation. SRK Consulting uses the same 25% geological chance of success in its independent assessment that then determines a 5% chance of commercial success."

Either Cue was lying by omission when they were highlighting the 25% geological success figure (and not clarifying anywhere in their reports that the real probability of true success is only 5%), or the current lot are trying to pump up a convenient valuation to get the sale through.

I would think that 5% success would be a very important statistic to put out in the various Cue and NZOG reports, given investors make buy and sell decisions based on this type of information.

What is further perplexing then, is that if the Ironbark project is almost certainly going to fail (95% certain), then:

1. Why the Hell have we farmed in 15% and gained significantly more exposure? We already had exposure via Cue. Seems reckless use of our money then with those odds.
2. Why is OGOG being so generous to us, offering to buy us out and further expose themselves to this almost-certainly doomed prospect?
3. Why have BP and Beach been so keen to collectively purchase 63.5% of the permit? Perhaps they are just casino gamblers like our lot apparently are, and 5% odds of success are just fine by them?

I mean, the Directors must know that their story is incredibly suspicious. Even now, I am trying to find a way to see the best in these people. But I have to say, it is becoming increasingly difficult.

[mistaTea]

I had an epiphany on my commute home today regarding the "Corporate Overheads" debacle. I do my best thinking in the car, you know.

Clearly, my assertion that they deducted roughly $21 million from our cash in the bank, to ensure we keep Mr Jeffries and company in the lifestyle they have become accustomed to for the next 8 years was preposterous. Nobody would actually do that!

So it got me thinking, there is only one other plausible way I could look at this. Of course! They must be deducting future rents and wages for the next 8 years from the only producing asset that NZOG owns! Yes, by God I've got it! Totally makes sense.

But hang on a second. Didn't their mates at Northington value Kupe at $24 million? Well, this is perplexing because we apparently owe $28 million in future wages, office rent and probably some Business Class flights to various conferences until 2027!

In which case, we are effectively paying OGOG $4 million to take Kupe off our hands! What a truly wonderful deal! - for them.

Who would have thought that 2 million barrels of oil equivalent in reserves had become so worthless in 2019! That we have essentially entered negative interest rate economics with this asset now!

Thank God for OGOG and their generosity.

[fish]

"The independent directors also take this opportunity to comment on Cue’s previous statements indicating that Ironbark has a “25% chance of success”. It should be noted that this figure refers to Cue’s assessment of “geological success” – i.e., the chance that hydrocarbons will be found in the geological structure. It does not measure the chance of “commercial success” – i.e. that any such discovery will then be capable of economic commercial exploitation. SRK Consulting uses the same 25% geological chance of success in its independent assessment that then determines a 5% chance of commercial success."

Either Cue was lying by omission when they were highlighting the 25% geological success figure (and not clarifying anywhere in their reports that the real probability of true success is only 5%), or the current lot are trying to pump up a convenient valuation to get the sale through.

I would think that 5% success would be a very important statistic to put out in the various Cue and NZOG reports, given investors make buy and sell decisions based on this type of information.

What is further perplexing then, is that if the Ironbark project is almost certainly going to fail (95% certain), then:

1. Why the Hell have we farmed in 15% and gained significantly more exposure? We already had exposure via Cue. Seems reckless use of our money then with those odds.
2. Why is OGOG being so generous to us, offering to buy us out and further expose themselves to this almost-certainly doomed prospect?
3. Why have BP and Beach been so keen to collectively purchase 63.5% of the permit? Perhaps they are just casino gamblers like our lot apparently are, and 5% odds of success are just fine by them?

I mean, the Directors must know that their story is incredibly suspicious. Even now, I am trying to find a way to see the best in these people. But I have to say, it is becoming increasingly difficult.

Maybe its best if we stop trying to judge these people and leave it to the takeovers panel-I understand a complaint about the valuation has already been made.
Yesterdays nzx-nzo announcement appears totally misleading.BP simply do not drill deepwater if there is only a 1 in twenty chance of success.
srk consulting gives a preferred value of 53.55 million au
Instead of stating this they state a 1 in twenty chance of success.
As I see it they have breached rule 64 of the takeovers code.
They are best coming clean now rather than facing such penalties
Breach of the takeover code can result in massive fines and years in jail

[Beagle]

Thanks fish.
And Beagle, there have been two substantial buybacks in my time too, so it's very hard to know just where one stands with regards dividends and average cost price.

But we know how things stand with the company now, don't we?

I can't wait to fin another company where you put $1 in and get 60 cents out 38 years later. What a deal, sign me up lol

[RTM]

I can't wait to fin another company where you put $1 in and get 60 cents out 38 years later. What a deal, sign me up lol

Wasn't there an issue at $1.50 as well ? And didn't we get some PanPacific ? Can't recall the total history.....but as per Lion, I really have no idea where I stand with cost...let alone dividends. Had a look at a few...they were reasonable for a while.I don't think it is as bad as Beagle makes it to be, but not ideal, that's for sure.
My very first share bought when they first listed, IPO, I think.

[Lion]

A couple of minor corrections about Beach Energy. Their market cap is A$5.7b and they describe Ironbark as part of their frontier exploration portfolio, so maybe that 'f' word is appropriate here.

They have a 37.5% interest in the Canterbury Basin, where Clipper is, incidentally. You'd think that shows some confidence there too, wouldn't you?

(Not trying to ramp Beach, but their shared assets with NZO have some relevance)

P.S. RTM, I actually do have an estimate of my average price. I've kept a record of my total spent and dividing by current holding gives me an average of $1.104 But that's not taking into account the two capital restructurings (or buybacks, whatever they were called). They probably make a substantial difference to my calculations. I exercised a lot of options at $1.50 - ouch! And there have been dividends which have returned me about 48c.

(Oh, that brings my net cost to 62.4c - almost exactly what OGOG are offering me! But they ain't getting them!)

[fish]

A couple of minor corrections about Beach Energy. Their market cap is A$5.7b and they describe Ironbark as part of their frontier exploration portfolio, so maybe that 'f' word is appropriate here.

They have a 37.5% interest in the Canterbury Basin, where Clipper is, incidentally. You'd think that shows some confidence there too, wouldn't you?

(Not trying to ramp Beach, but their shared assets with NZO have some relevance)

P.S. RTM, I actually do have an estimate of my average price. I've kept a record of my total spent and dividing by current holding gives me an average of $1.11 But that's not taking into account the two capital restructurings (or buybacks, whatever they were called). They probably make a substantial difference to my calculations. I exercised a lot of options at $1.50 - ouch! And there have been dividends which have returned me about 43c.

(Oh, that brings my net cost close to what OGOG are offering me! But they ain't getting them!)

I remember exercising a 7 figure number of options so I have taken a big hit.
Wherever I look I cannot find the figure of Ironbark only having a 5% chance of financial success.I discussed this again today with my brother in-law who yet again confirmed that nobody is going to drill 5000 metres with only that chance.He worked for BP and still has contacts but says chances of financial success is commercially sensitive and would never be disclosed.In the canorvan basin geological success is not likely to be a financial failure-gave a 1 in a hundred chance of a geological success being a financial failure
Still doing research just in case I go to court on 31/10/19.If I have said anything misleading or incorrect please let me know on this forum as I want all my facts to be correct and transparent(I do not want to end up in Jail and broke)

Cue estimates the Ironbark prospect contains 15Tcf of prospective recoverable gas(2) at a 25% chance of success. Retention of 21.5% equity provides a company changing opportunity for Cue if the well is successful.”

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Posted on October 26, 2018 with tags Austr

[mistaTea]

Reweti from NBR wrote an article today for NBR.

https://www.nbr.co.nz/story/nz-oil-gas-directors-sceptical-about-new-well

mistaTea even managed to make an appearance in his article.

[blackcap]

As an aside. Even if the scheme goes through, if you do vote ALL of your securities AGAINST, then I believe we have protections under Sec 110 and 111 of the companies Act and will get more than the 62 cents on offer. Can someone refute my argument?

Anyway voted all of mine Against a few days ago.

[mistaTea]

As an aside. Even if the scheme goes through, if you do vote ALL of your securities AGAINST, then I believe we have protections under Sec 110 and 111 of the companies Act and will get more than the 62 cents on offer. Can someone refute my argument?

Anyway voted all of mine Against a few days ago.

Hi blackcap,

No, that is incorrect when it comes to a Scheme of Arrangement. The rules for a SoA are very clear.

Under a SoA, if OGOG get 75% of the minority shares to vote in favour then they will acquire all of the shares (regardless of whether you personally voted AGAINST). Hence why it is so important to get as many AGAINST votes as possible - because this scheme really is 'all or nothing' for OGOG.

If they get the 75%, there is an opportunity to go to court at the end of October. I stand to be corrected, but it is my understanding that the courts are only interested in making sure that the SoA process has been carried out correctly, and that there is nothing obviously wrong with the offer. This is not an avenue that I think is likely to create much success for minority holders (though I admit I have no expertise in this area), hence my focus on making sure enough votes materialise to block the deal and avoid the whole situation.

Hope this helps.

[arjay]

Probably because there were none before 2008. From memory and I am really stretching my grey matter to recall but I don't think dividends featured much if at all in the 1980's or 1990's with this one.

Seem to recall dividends paid in the 90s when Ngatoro was producing - Digger might remember. 48c isn’t bad for a 50c float in 1982, compared to other Cos anyway. I remember Cue having a $1/share party in the early 80s. I reckon NZOG has done better in the interim. Just voted No.

[mistaTea]

Some readers were interested in a letter that I previously sent John Pagani (shortly after the SoA was announced). I have made contact with John again, asking for a 'please explain'. He has assured me that I will get a response covering off each point I raised.

For those who might be even mildly interested, I reproduce the text below.

********

Hi John,

You probably already appreciate the broad strokes around the concerns I have for the SoA and valuation, having read my comments on Sharetrader.


I did want to summarise, more formally, the issues I have. Please forward my comments on to Rosalind, Andrew and Alistair.


Ironbark - 95% probability of failure


This, in a way, was probably the biggest shock to minority holders. After reading incredible bullish statements since 2017 about Ironbark - to be told now that the realistic scenario for success is only actually 5% is incredibly difficult to understand. Were the shoe on the other foot, I think you would be just as incredulous.


Given you are now telling us that this project will almost certainly fail (95% certainty of not producing any hydrocarbons), and therefore the NZOG portion of the drill (approx $25M including carrying costs) will be flushed down the toilet, it begs some additional questions that I would appreciate your thoughts on:




Why have NZOG chosen to farm in (15%) with such terrible odds? We already had exposure to this ‘gamble’ via Cue - why would Andrew make such bullish comments as recently as June, and commit such a significant percentage of our money to this prospect if the odds are, in reality, so terrible? If Andrew had of told us he was planning to commit our funds to Ironbark, but that we were 95% certain to lose tens of millions of dollars we would have objected and asked for a special dividend instead.
Why are OGOG being so generous to us now, after all farm-in agreements have been signed? Since the money we are about to spend on Ironbark is almost certainly going down the toilet (according to the odds provided by Dr Archer and Northington Partners), it makes no logical sense that OGOG would want to further increase their exposure to this almost-certain significant loss?
Not a question, but a comment for point three - it also appears very strange to the minority shareholders that BP and Beach would collectively acquire 63.5% of the equity in Ironbark, given they are almost certainly going to waste more than US$60 million on this project.




Ironbark - Effectively offering $0.5 million dollars


I note that the value of Ironbark has been set at a meagre $4.4 million. Calling that a low ball offer for a resource that could be worth billions of dollars would be an understatement. However, what is even more perplexing is that $3.9 million is apparently to be deducted from our cash balance because OGOG expect us to contribute to the carrying costs owed to Cue for this project (funds yet to be paid).


So, in effect, we are going to be paid $500,000 for our share of a 15Tcf gas prospect that is in advanced stages of the planning.


You are making an offer to purchase our assets in order to gain 100% control of the company. Any ongoing cost related to a growth project must be borne by OGOG alone. Expecting departing shareholders to subsidise the project costs (when we would not reap any benefits from the project) is unreasonable and unacceptable.


By your logic, and given it has now been stated that Ironbark will almost certainly fail, you should go ahead and deduct the $20million drilling costs from our settlement too. That way, OGOG can well and truly get a free shot at this prospect.


Clipper - Worthless


I note that the value set for Clipper (holding the 11Tcf of gas Barque prospect) has been set at zero dollars. This is also difficult for minority shareholders to understand. Given Clipper is absolutely worthless, why have we bothered asking the government for repeat extensions? In reality, if Clipper held no value at all I would have expected OGOG (as 70% owner of NZOG) to force the abandonment of this permit. Our energy would be better off searching for other assets, rather that trying to convince would-be farm in partners to stump cash for an asset that is apparently not worth a dime.


Corporate Overheads


According to your reasoning, departing minority shareholders are expected to further subsidise staff wages, commercial rents and travel costs up until 2027 to the tune of $28 million dollars. This concept is not one that I can easily understand.


Why would we pay towards OGOG’s “corporate overheads” for the next eight years when we would no longer have any interest in the company?


To highlight how incredulous this is, I note that Northington Partners have valued Kupe (NZOG’s only directly held producing asset) at $24 million dollars. If we are to subsidise OGOG’s overheads for the next 8 years, totalling $28 million, then that means that, in effect, we have had to pay OGOG $4 million dollars to take Kupe off our hands.


This is the asset, by the way, that still has 2 million barrels oil equivalent in reserves. A project will be underway soon to further bolster those reserves.


Please provide me with an explanation as to why you think this makes sense. By this reasoning, when we purchased 4% of Kupe from Mitsui, we should have deducted at least $32million dollars in our corporate overheads. So we should only have actually paid them $3million maximum.


I reiterate, you are asking to buy our share of the assets. The only thing that should be on the table is a fair estimate of what each asset is worth. You do not get to deduct ongoing CAPEX and OPEX from the settlement, reaching out all the way to 2027.


I look forward to hearing from you soon John.

[digger]

mistaTea,

Do I have your premission to copy and then on Tuesday coming pass on to NZSA your letter as outlined on post 16223.


I have never before experienced Capex and Opex carried into the future as OGOG wants us to agree to.Totally lost as to how anyone can come up with this.I knew there must be some thing big in it for the independent directors and John as I was approached 4 times to see the CEO of OGOG. 4 times i said no.
We have refered to this offer as low ball.

[Wiremu]

This is from the BP announcement of contracting a rig to drill Ironbark:

"Ironbark, in the offshore Carnarvon basin, has the potential to hold up to 15 tcf of recoverable gas resource and is seen as a world-scale prospect in a proved gas-prone basin."

Now that hardly sounds like "frontier" exploration.

[Wiremu]

Digger,

And don't overlook the importance of the Liquidation Valuation section in Northington's valuation.

Oh, that's right it's conspicuous by its absence.

The Liquidation Valuation section was in the 2017 version they prepared for the partial takeover offer, but completely missing from the current version everyone is now focused on.

It can only be missing for one reason, and that is it would have made a nonsense of the huge increase in the 2019 valuation for corporate overheads which leads on to the range starting at 62 cents per share. Its absence is misleading, to say the least.

If the scheme gets before the Court for final approval this one factor will be telling.

[flyingmariner]

It will be interesting to see where oil goes in the WTI futures Sunday night (midday NZ time Monday) after the attack on Saudi Arabia. They estimate being up and running by Monday and production back to normal, that's a joke.

[Chippie]

My remaining 25K shares just voted against this joke.

For the me worst thing is that in 2008 I converted a lot of NZOOD options at $1.50 per share. Since then, incompetent NZO management has managed to do nothing material with all the capital they have been sitting on (except for pay for their salaries). Now they finally have some exciting prospects, then tell us they want to save us from a high risk investment. I have nothing to lose if I end up writing of my remaining shares especially after supporting NZO over all these years.

I cannot believe just how right Balance has been proved over all this time.

I really hope the NZSA grab this one and ensure these people are held to account.

Best of luck everyone,

[Marilyn Munroe]

Some drilling news including a possible change in the drilling timetable for a non NZOG permit in the Canterbury Bight

http://www.scoop.co.nz/stories/BU1909/S00358/update-tamarind-halts-tui-drilling-omv-assesses-options.htm

Boop boop de do
Marilyn

[Lion]

Its all in the takeovers code-eg they could do nothing,they could creep,they could make a full takeover bid and if they acquire 90% shares compulsively acquire the remainder.

If they did the latter and you vote against then arbitration and you get a fair and reasonable price with ogog paying costs and interest.


Thanks fish. I've been looking at the Takeovers Code this afternoon. I must say it's quite well written for a legal document - even I can understand most of it.
I've selected two quotes for discussion here: (1) "If the approval thresholds are not met, then the scheme will fail." So that's the end of that scheme, they can't just offer a higher price in the same scheme. Another new scheme is quite a big process, with another "independent adviser" (hah!) for shareholders and another sgm, just like the current process that has dragged on for some time now.

Then the creep, you mention - it has limitations (2) "A shareholder with more than 50% can buy more shares without having tocomply with the Code’s rules. But they must not buy more than 5% of the company’s shares over any 12-month period."
So if OGOG took that route, it would be more than three years to get to 90% where they can compulsorily acquire the remainder. The Ironbark drill is only twelve months away now.

They could do nothing (that would suit most of us here, I think)

Or, as you say, OGOG could make a full takeover bid and if they acquire 90% shares compulsorily acquire the remainder.

I rather suspect that if they did this, they would have to pay up large now, after all the publicity and discussion and the realisation that NZOG's assets are worth substantially more than they have mischievously tried to make us to believe.

[fish]

Thanks fish. I've been looking at the Takeovers Code this afternoon. I must say it's quite well written for a legal document - even I can understand most of it.
I've selected two quotes for discussion here: (1) "If the approval thresholds are not met, then the scheme will fail." So that's the end of that scheme, they can't just offer a higher price in the same scheme. Another new scheme is quite a big process, with another "independent adviser" (hah!) for shareholders and another sgm, just like the current process that has dragged on for some time now.

Then the creep, you mention - it has limitations (2) "A shareholder with more than 50% can buy more shares without having tocomply with the Code’s rules. But they must not buy more than 5% of the company’s shares over any 12-month period."
So if OGOG took that route, it would be more than three years to get to 90% where they can compulsorily acquire the remainder. The Ironbark drill is only twelve months away now.

They could do nothing (that would suit most of us here, I think)

Or, as you say, OGOG could make a full takeover bid and if they acquire 90% shares compulsorily acquire the remainder.

I rather suspect that if they did this, they would have to pay up large now, after all the publicity and discussion and the realisation that NZOG's assets are worth substantially more than they have mischievously tried to make us to believe.

I have a feeling that OGOG will soon be kicking themselves and the nzo directors for making such a dishonest offer .Northington partners stated that if the scheme fails the share price will drop.The market normally anticipates failure -and it is now pretty clear it will fail .Because we now know the true value of ironbark I dont think the sp will fall-but if it does it could be a good chance to buy

[mistaTea]

I have a feeling that OGOG will soon be kicking themselves and the nzo directors for making such a dishonest offer .Northington partners stated that if the scheme fails the share price will drop.The market normally anticipates failure -and it is now pretty clear it will fail .Because we now know the true value of ironbark I dont think the sp will fall-but if it does it could be a good chance to buy

Will definitely be interesting to see how the market reacts once it has been confirmed that the SoA has failed. I try not to speculate on market behaviours because I have no idea what other people will be prepared to sell their shares for in the future (nor do I care).

But shares are still being traded at 62 and 63 cents. Clearly the people who have been buying at these prices are not expecting the current SoA to go through.

I suppose there is a chance that the SoA from OGOG has made other investors take another look at the company. Value that was previous overlooked might be getting some more interest now.

I mean, the SP was ridiculous there for a time. At 47 cents/share it valued the whole company at $77M. NZOG's share of the cash alone is $78M (and the company has zero debt), so anyone buying at those prices was effectively getting Kupe, Cue and the exploration assets for free.

[Joshuatree]

i dont believe i have received any advice from NZOG re voting or anything else. I wonder how many other holders are being kept in the dark?

[mistaTea]

i dont believe i have received any advice from NZOG re voting or anything else. I wonder how many other holders are being kept in the dark?

Log into Computershare and select your NZOG holding. You can vote online and it should be very easy.

If you can't see an option to vote then contact Computershare to see what is going on.

[Joshuatree]

Ive voted , see above, but without sharetrader i would have been none the wiser ie computershare etc as far as i can tell have not notified me about all this. How many other shareholders are in the dark,is this a tactic?

[mistaTea]

Ive voted , see above, but without sharetrader i would have been none the wiser ie computershare etc as far as i can tell have not notified me about all this. How many other shareholders are in the dark,is this a tactic?

Oh I see what you mean.

No, I do not believe it is a tactic by NZOG or OGOG. The Scheme of Arrangement is a court-supervised process and they have a very strict set of rules that they have to adhere to closely. They would not risk getting the deal over the line (and getting in trouble with the courts) by not sharing voting information etc with some shareholders.

Also, it is in their interest to contact the widest possible audience. They are keenly aware that there will be a significant number of AGAINST votes. So, for them to have any hope of getting the deal done, they need the biggest possible voter turnout.

I took a look at the voter turnout for the $100 million capital return to shareholders in 2017. Even though that scheme of arrangement was designed to give shareholders what was effectively a large tax free dividend, even then they only had a 63% voter turnout.

I have no idea what the turnout will be for this one now that the shareholder base is different. But I can tell you that, if there is only a 63% turnout then this deal is definitely already blocked.

Not sure why you did not get the notice from them - perhaps they do not have your current contact details?

As much as I am bitterly disappointed with their offer price, I believe they are following the SoA process correctly. There are all sorts of issues I have with the valuation that has been supplied etc, but I have no reason to believe they are actively trying to stop shareholders from voting etc.

[Ripping]

Voted against today with a modest 34K.
I also have not received any communication from the company regarding this vote. My address has not changed since owning the stock and I have had all dividends, AR's etc delivered without incident over the past 20 odd years.

[etnom]

Ive voted , see above, but without sharetrader i would have been none the wiser ie computershare etc as far as i can tell have not notified me about all this. How many other shareholders are in the dark,is this a tactic?

Given the lack of integrity by OGOG and the NZOG directors ...... is it possible to have proxy people buying on market on their behalf to build a controlling stake to get the SoA through.

[blackcap]

Given the lack of integrity by OGOG and the NZOG directors ...... is it possible to have proxy people buying on market on their behalf to build a controlling stake to get the SoA through.

Anything is possible I guess, but that would be in the illegal category with penalties of jail time etc. I doubt they would be doing that kind of thing. As MistaTea has pointed out, OGOG are playing to the letter of the law.

[Wiremu]

It could be that shareholders who have supplied an email address to Computershare have received the emailed notification, but everyone else has to wait for theirs in the mail.

[etnom]

Log into Computershare and select your NZOG holding. You can vote online and it should be very easy.

If you can't see an option to vote then contact Computershare to see what is going on.

Thank You for the updates and the link. Voted against..... holding 51,000.

[etnom]

It could be that shareholders who have supplied an email address to Computershare have received the emailed notification, but everyone else has to wait for theirs in the mail.

Have not received any update from either Computershare or NZOG, receive regular other correspondence on my registered email from Computershare ... being associated with the industry currently overseas on a assignment. Thanks to MistaTea for the updates.

[Beagle]

Former poster Crackity, (very likeable and affable bloke he is and really missed on here), told me yesterday he has heaps of these and is naturally voting against this scheme which he sees as being grossly unreasonable to shareholders.

[Joshuatree]

So is it the number of shares you hold or your actual yes or no vote that counts?

[Lion]

So is it the number of shares you hold or your actual yes or no vote that counts?
Each share counts as one vote, I believe.

[fish]

LONDON – In the first half of 2019, 51 high-impact exploration wells were completed, compared to 36 in the same period in 2018, according to Westwood Global Energy.

Senior analyst Jamie Collard said gas discoveries are up and oil down on 2018. The commercial success rate has also improved, running at 37% so far compared to ~27% recorded in 2017 and 2018.

[fish]

LONDON – In the first half of 2019, 51 high-impact exploration wells were completed, compared to 36 in the same period in 2018, according to Westwood Global Energy.

Senior analyst Jamie Collard said gas discoveries are up and oil down on 2018. The commercial success rate has also improved, running at 37% so far compared to ~27% recorded in 2017 and 2018.

So why are bp drilling Ironbark if only 5% chance commercial success according to the independent directors .
Last Friday the Independent directors confirmed this was an accurate assessment.
The 25% chance of success quoted by CUE was clearly their odds of being a commercial success .
As digger has previously said northbridge partners had to get a range with a lowest value equaling 62 cents for the Independent directors to approve the scheme so in my opinion they have made the figures to fit.
Does anyone disagree apart from the Independent directors and OGOG?.
This is now the 3rd independent report I can find that Northbridge partners have completed for ogog or companies they have majority shareholding.

[rooster]

Meanwhile the CUE share price keeps rising...

[Joshuatree]

Each share counts as one vote, I believe.

cheers, thats what i thought.

[fish]

Meanwhile the CUE share price keeps rising...
Cue have not come out and said that when they announced a 25% chance of success at Ironbark they really meant 25% chance of geological success which translates to 5% financial success.
I have been told by a recently retired expert who worked on these kinds of drills in a senior position that BP have a success rate of 50%.They are probably the most successful explorer.
The project has been substantially progressed and de-risked in the past year.
OGOG and the Independent directors should know this.Northington partners should have clarified the issue in their report.

[mistaTea]

Cue have not come out and said that when they announced a 25% chance of success at Ironbark they really meant 25% chance of geological success which translates to 5% financial success.


Agreed. Now that NZOG and OGOG are at pains to push the message that Ironbark is a foolish gamble with 95% certainty of failing...if there was any merit in what they were saying I would expect Cue to have published a similar statement to the ASX.

The shares in Cue continue to rise since the farm-in agreements were locked down, so one would think Cue has a duty to the market to come clean. Of course what they meant all along by "25% chance of success" was that there was only a 25% chance of getting a whiff of of gas down there. It's only actually 5% that any gas found can actually be extracted! Perfectly (un)reasonable.

One thing is for sure - someone is being incredibly dishonest here. And it ain't Cue.

[digger]

Agreed. Now that NZOG and OGOG are at pains so push the message that Ironbark is a foolish gamble with 95% certainty of failing...if there was any merit in what they were saying I would expect Cue to have published a similar statement to the ASX.

The shares in Cue continue to rise since the farm-in agreements were locked down, so one would think Cue has a duty to the market to come clean. Of course what they means all along by "25% chance of success" was that there was only a 25% chance of getting a whiff of of gas down there. It's only actually 5% that any gas found can actually be extracted! Perfectly (un)reasonable.

One thing is for sure - someone is being incredibly dishonest here. And it ain't Cue.

Given the other drills in this basin the chances of getting a whiff of carbohydrates at Ironbank must be as close to 100% as you can get. Even one molecule is detection so there is no way Cue would say the chances are only 25% . Cue was clearly stating the chances of commerical success. Northington are fudging the results to fit there story..

[Sideshow Bob]

And of course every 1 cent Cue increases in value, basically this is worth 2c per share towards the value of NZO. Hit 11c again yesterday - so 4c per NZO share better than when the scheme was announced.

[Lion]

There are so many innaccuracies revealed in the report now, that I wonder if the courts might consider it to be dishonest, and so declare the whole SoA invalid.

[RTM]

Already covered. Link no good.

[mistaTea]

https://www.nzx.com/announcements/341035

John Pagani just resigned.

[Sideshow Bob]

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=5134260

Hmmmm…..

I certainly appreciated his participation on this forum from time-to-time - and the difficult line to tread in doing this. Certainly other companies could do well to take a leaf from this book.

[mistaTea]

I certainly appreciated his participation on this forum from time-to-time - and the difficult line to tread in doing this. Certainly other companies could do well to take a leaf from this book.

Yes, my dealings with John were always professional and he would make an effort to respond to my queries in a timely manner.

We will never know John's full reasoning for resigning - however it does appear to be an odd thing to do in the middle of a SoA. One would have thought that, if John just wanted to move on, he would have waited until after the special meeting in October to do so.

Certainly not a good look for NZOG right now, given the serious criticisms they are taking.

I do wish John well in his future endeavours. We disagreed on some key elements recently, but it was never personal.

[arjay]

Yes, my dealings with John were always professional and he would make an effort to respond to my queries in a timely manner.

We will never know John's full reasoning for resigning - however it does appear to be an odd thing to do in the middle of a SoA. One would have thought that, if John just wanted to move on, he would have waited until after the special meeting in October to do so.

Certainly not a good look for NZOG right now, given the serious criticisms they are taking.

I do wish John well in his future endeavours. We disagreed on some key elements recently, but it was never personal.

John follows this thread, so perhaps not so surprising?

[fish]

John follows this thread, so perhaps not so surprising?

I am not surprised at all.
A possible scenario is -
John is instructed to make the 13/9/19 nzx announcement.He is assured all the facts are correct and not misleading by the Independent directors.
The announcement is made.
He reads the feedback and it dawns on him he has been misled.In a worse case scenario the takeovers panel can start criminal proceedings-massive fines and years in Jail can ensue.He meets his lawyers.
They all meet management.He is advised to resign