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  1. #16096
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    Quote Originally Posted by fish View Post
    However the Independent directors are misleading shareholders by their NZX announcement that the stk report says that Ironbark has only a 5% chance of financial success.
    I have now read the stk report several times and it certainly does not say this.
    The PKF report, which references SRK analysis does not explicitly say anywhere that "Ironbark only has a 5% probability of commercial success".

    It does provide a table (4-4) on page 27, which multiplies out the various probabilities to end up with a Low, Preferred and High Value for a discovery. The way the factors are multiplied out, you could infer that the net factor applied is 5% to come up with a valuation range for a discovery.
    Nobody actually believes that, in reality, anybody stumping up the large amount of cash required for exploration wells is anticipating a 95% chance of a dry well though.

    However, PKF then further reduce the low estimate based on the amount paid in earlier farm-in deals with BP and Beach. This gave an incredibly wide value range of A$3.8M - A$536M (with a preferred value of A$357M) for the total value of the prospect. In my view, that range is so wide that it has very little practical use.
    It did mean that NZOG was able to farm-in to Ironbark for more than BP paid, but the same as Beach. NZOG will end up paying, in total, approx $4.4 million to Cue to farm in for 15%.

    The Northington report then states that minority shareholders should therefore sell their interest in Ironbark to OGOG on the same terms as Cue (i.e. $4.4M).

    Well, sorry but that isn't going to fly. Cue was in a different situation - they were trying to attract financial backing for an exciting drill. They were not in a position to negotiate a larger carrying cost from BP, Beach and NZOG - but they have retained 21% equity and will stand to gain a lot, given around half their drill cost will be funded by the other JV partners. If they did not accept NZOG as a JV partner, they would not have fulfilled a key obligation in their option agreement with BP and risked blowing up the whole deal. So Cue shareholders had to take the deal on the table, rightly or wrongly.

    Now, we are in a different situation altogether. Minority Shareholders are not trying to attract any interest to secure finance. OGOG want to buy out our equity, and to do that they will need to offer considerably more (even if they doubled their current offer, I doubt it would be enough). To suggest that because NZOG, BP and Beach got a sweet farm-in deal for Ironbark, and on the strength of that NZOG minority holders should drop their pants too is ludicrous.
    Last edited by mistaTea; 20-09-2019 at 12:05 PM.

  2. #16097
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    Thank you Mista tea
    No wonder I cannot find a 5% chance of success in the srk report-I have spent hours trying to find out how anyone could infer only a 5% chance of success in the report.
    Table 4-4 is the estimated value of discovered hydrocarbons .It has nothing that a reasonable person could infer a 5% chance of successful drill.Indeed it uses a 2/7 chance of a wildcat drill being successful based on 7 previous drills in the last 20 years .It gives a preferred value of $357 a$mm so the value to nzo(including cue) is over $100million.
    As I have said before with bp involved the chances of a successful drill with the technology and experience they have is at least 1 in 3 and probably more than 1 in 2.

  3. #16098
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    Quote Originally Posted by fish View Post
    Thank you Mista tea
    No wonder I cannot find a 5% chance of success in the srk report-I have spent hours trying to find out how anyone could infer only a 5% chance of success in the report.
    Table 4-4 is the estimated value of discovered hydrocarbons .It has nothing that a reasonable person could infer a 5% chance of successful drill.Indeed it uses a 2/7 chance of a wildcat drill being successful based on 7 previous drills in the last 20 years .It gives a preferred value of $357 a$mm so the value to nzo(including cue) is over $100million.
    As I have said before with bp involved the chances of a successful drill with the technology and experience they have is at least 1 in 3 and probably more than 1 in 2.
    Correct, the inferred 5% used to end up with the value range is a framework used to derive some kind of estimate in terms of the value of a discovery in Ironbark.

    Whether you can take that percentage and say therefore the chance of a drill discovering commercially viable levels of extractable hydrocarbons is still unclear to me (and appears dubious).
    Certainly not believable in practice.

  4. #16099
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    A concern is that the majority of small shareholders don’t follow this thread. They will likely have been unaware of what’s happening when they receive a kind offer for their shares. The offer will explain that the alternative is that they will most likely lose their equity in the upcoming bound-to-fail drills. Is it unreasonable to expect that the offer might therefore be successful? Is there any way an alternative message can be sent to all shareholders?

  5. #16100
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    Quote Originally Posted by fish View Post
    Thank you Mista tea
    No wonder I cannot find a 5% chance of success in the srk report-I have spent hours trying to find out how anyone could infer only a 5% chance of success in the report.
    Table 4-4 is the estimated value of discovered hydrocarbons .It has nothing that a reasonable person could infer a 5% chance of successful drill.Indeed it uses a 2/7 chance of a wildcat drill being successful based on 7 previous drills in the last 20 years .It gives a preferred value of $357 a$mm so the value to nzo(including cue) is over $100million.
    As I have said before with bp involved the chances of a successful drill with the technology and experience they have is at least 1 in 3 and probably more than 1 in 2.
    Fish, you are absolutely correct on this point. Nowhere in the SRK report does it refer to a 5% chance of success, and as experts neither would they. The 5% chance of success is a Northington's construct which is an erroneous use of SRK's information, and entirely misleading.

  6. #16101
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    Quote Originally Posted by arjay View Post
    A concern is that the majority of small shareholders don’t follow this thread. They will likely have been unaware of what’s happening when they receive a kind offer for their shares. The offer will explain that the alternative is that they will most likely lose their equity in the upcoming bound-to-fail drills. Is it unreasonable to expect that the offer might therefore be successful? Is there any way an alternative message can be sent to all shareholders?
    The message could be sent by the takeovers panel or the nzx.
    For instance if you make them aware of your concerns which shows the nzo independent directors are misleading voting shareholders they have tremendous powers to rectify the situation.
    If a statement is made that clearly is not honest opinion and is misleading then it is a breach of the code
    The get out card the directors may use is it is honest opinion.However honest opinion must be
    a)honestly held and
    b)reasonably based and
    c)Not demonstrably wrong

    It is difficult to prove a) but I feel b) and c) could be very difficult for them to dispute.

    Good Luck
    Last edited by fish; 20-09-2019 at 04:10 PM.

  7. #16102
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    Quote Originally Posted by Wiremu View Post
    Fish, you are absolutely correct on this point. Nowhere in the SRK report does it refer to a 5% chance of success, and as experts neither would they. The 5% chance of success is a Northington's construct which is an erroneous use of SRK's information, and entirely misleading.
    Thank you wiremu.
    Would you consider making a complaint to both the nzx and the takeovers panel as I feel they need to know from people that have read both the Northington and srk report

  8. #16103
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    https://www.nzherald.co.nz/business/...ectid=12269453

    Brian Gaynor using the NZOG SoA as an example, questioning why so many Kiwi Directors are gutless.

  9. #16104
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    Quote Originally Posted by mistaTea View Post
    https://www.nzherald.co.nz/business/...ectid=12269453

    Brian Gaynor using the NZOG SoA as an example, questioning why so many Kiwi Directors are gutless.
    Gutless is assuming the NZO Independent directors have our best interests at heart.They would know the NZX announcement 13/9/19 was misleading and actually false.
    My personal opinion is that Rod Ritchie,with his extensive experience in the petroleum Industry and diverse interests(including OMV -Austrian petrochemical group I think) would certainly Know the Northbridge report was false

  10. #16105
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    Quote Originally Posted by fish View Post
    Gutless is assuming the NZO Independent directors have our best interests at heart.They would know the NZX announcement 13/9/19 was misleading and actually false.
    My personal opinion is that Rod Ritchie,with his extensive experience in the petroleum Industry and diverse interests(including OMV -Austrian petrochemical group I think) would certainly Know the Northbridge report was false
    Old Roddie boy hasn’t had ahelluva lot to say at all during this whole scam.

    It’s been left up to the academic to convince us.

    She probably subscribes to the whole ‘Modern Portfolio Theory’ and therefore a 25% premium on SP is a damn good deal. Look no further!
    Last edited by mistaTea; 21-09-2019 at 10:30 AM.

  11. #16106
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    Quote Originally Posted by mistaTea View Post
    Old Roddie boy hasn’t had ahelluva lot to say at all during this whole scam.

    It’s been left up to the academic to convince us.

    She probably subscribes to the whole ‘Modern Portfolio Theory’ and therefore a 25% premium on SP is a damn good deal. Look no further!
    Well it,s like this, average S/H should not been surprised it has come to this offer.
    When the CO. bought out a percentage of shares at what under 75 cents, to get their holding to 70%
    Then let the S/Price drift until all the Ducks lined up and then make this ridiculous offer.
    All the while repeating the Mantra, managements aim is to create value to S/Hs

    Hinted at that in several posts last 2 years.

  12. #16107
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    Quote Originally Posted by Fabs37 View Post
    Well it,s like this, average S/H should not been surprised it has come to this offer.
    When the CO. bought out a percentage of shares at what under 75 cents, to get their holding to 70%
    Then let the S/Price drift until all the Ducks lined up and then make this ridiculous offer.
    All the while repeating the Mantra, managements aim is to create value to S/Hs

    Hinted at that in several posts last 2 years.
    Yes, and it does occur to me too that the whole process they did to ‘clean up’ the shareholder base by purchasing back any holdings under 500 was all part of this ultimate aim.

    Those shareholders were almost certainly not going to bother voting, so a quick ‘tidy up’ would benefit OGOG when it was time to kick the remaining minority holders in the guts with a low ball SOA.

  13. #16108
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    All part of the ploi.
    Strategy and Focus, they play for keeps.
    Time will tell.

  14. #16109
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    Very interesting times, here and now. I wonder if the "independent' directors and whole board are getting anxious about the legality of their report of 13/9.

    I wish I could have seen Brian Gaynor's piece in the Herald, but it's behind their paywall. He's always been honest and perceptive, IMO.
    Last edited by Lion; 22-09-2019 at 11:59 AM.

  15. #16110
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    Brian Gaynor asks the question
    Wheres the fight in Kiwi Company Directors?
    He asks why are they not fighting such a low ball offer?
    He states NZOG endorsed the 78 cent per share partial offer because the singaporean company had global expertise that would benefit the NZX listed company.
    Apart from that he covers the history of the company which you ,like many of us ,have been part off.
    He has not mentioned Ironbark and this could be for many reasons eg ignorance(which I doubt) or because of legal advice about defamation ( court cases can cost millions even if you win).
    Stating as fact something that is untrue about a person and publishing it can be very expensive-and that could apply to posts on sharetrader.
    Last edited by fish; 22-09-2019 at 06:10 AM.

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