NZ Oil & Gas (NZO)

[mistaTea]

With the NZ govt exploration ban, no new foreign company is going to bother coming here, so these permits will run up to the drill and drop, and then be surrendered.

Yes, from an outside observer perspective it certainly does look grim.

However, I think an extension will be granted. The government needs some big gas discoveries if they have any chance of a 'just' and 'smooth' transition (to whatever it is we are transitioning to - they are yet to figure that out )

It may well be that an extension only delays the inevitable surrender due to lack of farm-in partners. But it does provide some chance for OGOG, NZOG and Beach to leverage their relationships and secure additional investors.

Though it isn't looking particularly hopeful right now, I don't think we can conclude that it is hopeless...

[blackcap]

However, I think an extension will be granted. The government needs some big gas discoveries if they have any chance of a 'just' and 'smooth' transition (to whatever it is we are transitioning to - they are yet to figure that out )

.

I am not sure Megan and Jacinta are smart enough to realise that. Because 12 years to go before the world ends you know...

[mistaTea]

I am not sure Megan and Jacinta are smart enough to realise that. Because 12 years to go before the world ends you know...

Oh yes, I keep forgetting about that.

If anyone truly believed the worst case scenario doom and gloom then they (govt and AKL Council...) wouldn't be spending billions on Auckand's CRL...I mean, it'll all be under water soon right!

[mistaTea]

http://nzx-prod-s7fsd7f98s.s3-websit...151/298183.pdf

Predictably, an extension has been granted. 3 years more, which is longer than I expected.

Certainly won't hurt company prospects. In the near to medium term, I am more interested in what the company is going to do with the $100M cash (beyond Ironbark obligations).

[fabs]

What the company is going to do with the $100M cash ?????

Countless S/Hs have been wondering about that for more than 10 years.
Has been however a good Cash Cow for a number of Under performing and Over enumerated Individuals.

[Sideshow Bob]

ODT Article today:

https://www.odt.co.nz/business/gas-a...ve-otago-coast

[blackcap]

What the company is going to do with the $100M cash ?????

Countless S/Hs have been wondering about that for more than 10 years.
Has been however a good Cash Cow for a number of Under performing and Over enumerated Individuals.

Till now maybe. I do not think the Israeli's paid $.74 for 3/4 of the company for them to go and waste it. At these prices, I think its a no brainer if you are patient and willing to accept some drilling risk in your portfolio.

[Mickey]

ODT Article today:

https://www.odt.co.nz/business/gas-a...ve-otago-coast

I worked on an American oil rig for 3-years in the 70's that drilled in the GSB, (several wells south of Invercargill & 1 off Dunedin) off Nelson and off Taranaki. The biggest conundrum the oil company faced if it discovered an oil field in the GSB was how to get the crude oil from a deep water well ashore. The water in the GSB is mostly very deep and the weather conditions are some of the most atrocious you'll find anywhere in the world and so using floating storage tanks and mooring tankers is likely to be very challenging if not impossible. Building, running and maintaining an underwater pipeline 100-150km to the nearest port is also unlikely because of the water depths and the harsh conditions as well as the environmental hurdles that any company would face. It would have to be one hell of an oil field for the economics to stack up.

[JohnPagani]

Hi Mickey

Technology has changed a bit since the 1970s, and so has the potential market for product. In those days, gas was not much sought after in the GSB. The issue of how to commercialise a discovery is part of the business case for drilling a well in the first place. That's why the joint venture commissioned an independent economic impact study. You can read it here: https://www.nzog.com/dmsdocument/download/333 [pdf]. That report was commissioned to demonstrate that, if we are successful with a discovery, there will be a market for the product - and indeed there would be. Oil or condensate could be commercially produced directly to an FPSO and exported. Gas could be commercially piped ashore, around 60km. You can see a diagram of how it would work in that report.

On the weather conditions, the two New Zealand Oil & Gas prospects, Toroa and Barque, have met ocean conditions that are better than Taranaki. The prevailing wind is offshore and they are sheltered behind the island. Oil and gas is commercially produced in less hospitable places.

So, in summary, the questions you mention are fair, but the issues are well understood around the world, and the engineering and economics required are thoroughly investigated before we make drill commitments.

Kind regards

John Pagani
General Manager Corporate Services, New Zealand Oil & Gas

[mistaTea]

Hi Mickey

So, in summary, the questions you mention are fair, but the issues are well understood around the world, and the engineering and economics required are thoroughly investigated before we make drill commitments.

Kind regards

John Pagani
General Manager Corporate Services, New Zealand Oil & Gas

Indeed John the well documented potential of both Barque/Toroa and Ironbark are very interesting indeed. A major discovery in any of them could turn a number of shareholders into instant millionaires. And technology is now such that, should discoveries be made in any of these areas, getting the resource to shore is absolutely doable. The long term investor may well be rewarded handsomely, time will tell.

I suppose many investors will be more worried about the near-medium prospects though. Appreciate you won't be able to say much right now, however the share price has taken an absolute hiding (down from mid 70's to 48 cents per share). The only thing that will turn that around over the next year or so is the effective deployment if the $100M cash pile (that seems to grow most quarters).