NZ Oil & Gas (NZO)

[Enjay]

I understood the Barque permit holders face a "drill or drop" pivot point in April 2019. Am I wrong?

No, quite right. Haven't seen the permit document, but for each stage of the work programme, there is a commit or surrender point. However, given the new deep-pocketed shareholder (Ofer) and optimism of the company about Barque, I'd be surprised if they surrendered the permit. Once surrendered, they would be unable to apply for a new permit - only able to progress existing permits and buy participating interests in other existing permits.

[Vaygor1]

Hi Vaygor1

Picking up on regulatory / coalition government point this thread, the policy currently only applies to new grants of permits, rather than the progression from a PPP to PEP, or PEP to PMP - as I understand it.

So, for the Clipper / Barque prospect under PEP52717, NZOG and Beach have existing rights to carry out exploration activities until 2027 (including drilling wells as required under the permit). Then, in 2027 or earlier, they'll have the choice to progress to a PMP (if commercially viable plays emerge). These are unaffected by the current government's policy.

One extra piece of red tape to consider is OIO. NZOG and partner Beach being foreign owned would probably need OIO consent to construct on-shore production facilities - those facilities sitting on regulated land. With a FPSO arrangement, a sub $100M transaction will fly under the OIO radar but a $100M+ transaction would be caught.

On my reading, possibly a little less gloomy but not without regulatory risk / uncertainty. Hope that's helpful!

When the serious dollars come into play, I believe the purse-string holders will revert to the following two facts:

The government has the ability to change the law.
The current government in its current form cannot be trusted.

[Enjay]

When the serious dollars come into play, I believe the purse-string holders will revert to the following two facts:

The government has the ability to change the law.
The current government in its current form cannot be trusted.

The first point is quite true. Except in this instance, no law has changed. Block Offer (the means by which petroleum permits are 'auctioned') was a policy initiative, and not mandated or required to happen by law. Hence it could be changed simply with a few key decision-makers.

I'd also add that the effects of the "ban" are markedly over-stated for the short to medium term. Reported numbers of permits have exceeded 1,000 in the past. In the last two years, 1 offshore permit was granted and 1 onshore permit was granted. In previous years, sometimes as many as 7 or 15 would be granted. While numbers of permits are poor comparisons (acreage, field prospectivity, etc all vary), even on a generous estimate, only around 1.5% of existing permits are granted annually. On a conservative estimate, 0.1%.

Serious money, then, is likely to be continuing as per usual - assessing prospectivity and economic viability as measured against the now steadily increasing oil price.

Resources:
You can see permits these here: http://data.nzpam.govt.nz/permitwebm...dity=petroleum

You can see Block Offer results here: https://www.nzpam.govt.nz/permits/pe...ffer/previous/

[blockhead]

After being an NZO shareholder for many years I eventually became disillusioned and sold my holding, I ended up with 48 shares left over. Back on 13th April NZO advised me any holdings of 500 or less would be sold by them and the proceeds paid out. I duly received a statement from Computershare dated 20th July telling me my shares had now been sold and "the proceeds will be paid as soon as practicable into my bank account" As yet I haven't received a cent.
Now the amount is peanuts but that is not important, I imagine many small holders are in the same position and collectively the amount may be substantial.

I phoned Computershare and was told "the shares have not actually been sold yet as NZO "doesn't want to drop them on the market and depress the price" For me this is not good enough, according to my Computershare statement my shares have been removed from the register and I no longer own them, either I get the money or they should still show as my shares on the register.

I have emailed NZO for an explanation and look forward to their reply.

Do others have a similar experience ?

[JohnPagani]

Thank you John Pagani for clarifying that. Yes, it is helpful. I do recall that study about the uses for a decent gas discovery at Barque. That's good, solid research. I sometimes let my enthusiasm run away, thinking of an LNG project.
Did the MartinJenkin study consider methanol production from Barque? Gas production from the Taranaki fields is approaching maturity and decline and Methanex just might be looking at another long-term source of gas supply.
I hope there's enough gas left over to cook the porridge in Otago.

Yes, the study authors worked with Methanex methanol production. In a gas development case, methanol production for export is the first likely commercial production to begin.

[JohnPagani]

On the consents for development issue - the government has provided us with a written assurance that existing rights will be preserved, and that any future application for development will be considered under existing law. The substance of the decision and the manner in which it was made were not helpful in any way, but we remain confident that a commercial discovery at Barque would be consented.

[JohnPagani]

After being an NZO shareholder for many years I eventually became disillusioned and sold my holding, I ended up with 48 shares left over. Back on 13th April NZO advised me any holdings of 500 or less would be sold by them and the proceeds paid out. I duly received a statement from Computershare dated 20th July telling me my shares had now been sold and "the proceeds will be paid as soon as practicable into my bank account" As yet I haven't received a cent.
Now the amount is peanuts but that is not important, I imagine many small holders are in the same position and collectively the amount may be substantial.

I phoned Computershare and was told "the shares have not actually been sold yet as NZO "doesn't want to drop them on the market and depress the price" For me this is not good enough, according to my Computershare statement my shares have been removed from the register and I no longer own them, either I get the money or they should still show as my shares on the register.

I have emailed NZO for an explanation and look forward to their reply.

Do others have a similar experience ?

When you say 'for me this is not good enough' - what would you prefer? That the broker dumps all the shares on market at once, achieving a lower price for you and providing the buyer with an opportunistic gain? Or that we didn't pick up the brokerage charges on your behalf to enable you to get your $30 back?
You shares were not sold on 20 July - you were notified that they were transferred off the register then so that the broker could begin the sales process. This began the next day. The process is being managed carefully so that the sale of an unusual volume doesn't unfairly push the price down, which would not only disadvantage holders of small parcels that are part of the the process, but would also disadvantage anyone else trading their shares during the period (just for the sake of a few weeks in respect of shares that were anyway stranded).

The company is bearing the full cost of the brokerage, and to make this economic and fair to remaining shareholders the shares are being parceled together. At the conclusion of the sales process, you will receive the average price achieved. Therefore it is not possible to distribute proceeds to anyone at this time.

[blockhead]

Thank you John for your response, I understand what you have just explained, what makes me feel is aggrieved is the statement from Computershare (on your behalf) telling me "your shares have now been sold" not as you now tell me, "transferred off the register"..one or the other, can't be both !

Turns out they haven't been sold at all.

[Grimy]

The original letter I got was along the lines of the sales process would start on or after the 20th July. I can't remember the exact wording, but for our approx. $150 worth of shares I'm not worried about a bit of a delay. As John says, we were effectively stuck with them anyway-and I know that wasn't our doing, but I'm glad they weren't dumped on market (although if they had been I probably would have bought some...

[Sideshow Bob]

After being an NZO shareholder for many years I eventually became disillusioned and sold my holding, I ended up with 48 shares left over. Back on 13th April NZO advised me any holdings of 500 or less would be sold by them and the proceeds paid out. I duly received a statement from Computershare dated 20th July telling me my shares had now been sold and "the proceeds will be paid as soon as practicable into my bank account" As yet I haven't received a cent.
Now the amount is peanuts but that is not important, I imagine many small holders are in the same position and collectively the amount may be substantial.

I phoned Computershare and was told "the shares have not actually been sold yet as NZO "doesn't want to drop them on the market and depress the price" For me this is not good enough, according to my Computershare statement my shares have been removed from the register and I no longer own them, either I get the money or they should still show as my shares on the register.

I have emailed NZO for an explanation and look forward to their reply.

Do others have a similar experience ?

I'm obviously a large shareholder with my 555 NZO shares...…