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  1. #41
    Legend Balance's Avatar
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    NZO's share price will drift lower as the excitment factor is dissipating by the day?

    The IPO of PRC has proven to be a disappointment after a lot of hype and promise. There were investors piling into NZO to get a slice of PRC. As it turned out, they need not have bothered. It is still a risky project with uncertain payoffs and its share price reflects that.

    Hector is stone cold dead as a prospect - forget about the billions of dollars to be found.

    Taranui has just come in stone cold dead.

    So cold reality will now start setting in. And on that score, it's a lot easier playing around with a stock which is well covered like AWE or BHP than it is with a stock like NZO where valuations done to date are so out of synch with the market's view.

  2. #42
    Legend shasta's Avatar
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    Quote Originally Posted by Balance View Post
    NZO's share price will drift lower as the excitment factor is dissipating by the day?

    The IPO of PRC has proven to be a disappointment after a lot of hype and promise. There were investors piling into NZO to get a slice of PRC. As it turned out, they need not have bothered. It is still a risky project with uncertain payoffs and its share price reflects that.

    Hector is stone cold dead as a prospect - forget about the billions of dollars to be found.

    Taranui has just come in stone cold dead.

    So cold reality will now start setting in. And on that score, it's a lot easier playing around with a stock which is well covered like AWE or BHP than it is with a stock like NZO where valuations done to date are so out of synch with the market's view.
    6250 bopd for NZO, makes for exciting times you mean Balance?

    Agree, AWE (& other ASX mid tier oilers) are better covered by analysts, & NZO being in the NZX50 doesn't seem to mean a damn thing...

    However, no hype, blue sky valuations, & even NZO's long time knockers can' t argue against it, we have $$$$ people!

    NZO has cash & lots of it, nothing boring about that, it's what we've all been waiting for, NZO starting to PRODUCE the blackgold...

    Every week we will get another > $3.5m revenue into the pot...

    We get too much of it & someone else will want to take it off us

    The SP should incrementally climb, & ultimately be at the mercy of oil prices whilst we are running at 50,000bopd flow rates.

    No longer a trading stock IMO, but more of a yield play for investors.

  3. #43
    Legend Balance's Avatar
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    Plenty of companies out there producing the blackgold, shasta - plenty. The one thing worth noticing is that posters here keep talking revenues from the production but how much of that is already priced into the stock? Paying $1.00 for $1.00 makes no sense.

    Hector and Taranui were priced into NZO and when they came out dry, down went the share price despite the belief by some that they were free options. Sorry but they were not free, were they?

  4. #44
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    Quote Originally Posted by Closed Loop View Post
    Now that all the drills in this series are completed [sadly all failures] the SP will now move on existing fundamentals and not on speculation.In fact the drills have had a negative effect on the SP as there was always a chance that they would be unsuccesful.That negative effect was greater than it should have been and now that the drills are out of the way the SP can now move forward on fundamentals.Or put it another way the SP will now be decided by investers and not speculators. Or again another way the SP would be higher today if NZO had never taken part in a drilling series.It seems to me that the only negative effect of drilling a dud well should be limited to your % cost of the unsuccessful drill. With NZO the negative effect is much greater that just thoses costs.
    Well said!

  5. #45
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    just state the facts hector and taranui were duds but TUI isnt ,with potential for regrade ect but based on the facts the SP of $1 will be short lived if crude prices remain high and our x change falls either one of which is likely,and possibly both .
    Time is a great teacher, but unfortunately it kills all its pupils

  6. #46
    Legend Balance's Avatar
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    Quote Originally Posted by boysy View Post
    just state the facts hector and taranui were duds but TUI isnt ,with potential for regrade ect but based on the facts the SP of $1 will be short lived if crude prices remain high and our x change falls either one of which is likely,and possibly both .

    Profit = Revenues less costs less interest.

    So what is Tui worth to NZO NPV? I do not know but you all seem to but don't want to post it ?

  7. #47
    Legend shasta's Avatar
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    Quote Originally Posted by Balance View Post
    Plenty of companies out there producing the blackgold, shasta - plenty. The one thing worth noticing is that posters here keep talking revenues from the production but how much of that is already priced into the stock? Paying $1.00 for $1.00 makes no sense.

    Hector and Taranui were priced into NZO and when they came out dry, down went the share price despite the belief by some that they were free options. Sorry but they were not free, were they?
    Fair call others oilers i like are AED/NWE/AWE/BPT/COE, but NZO undilluted @ say 260m @ $1 = $260m MC (very simplistic terms)

    We get 9 months revenue to balance date (6250 X 365 x 9/12 = 1.7mmbo)

    for 1 July - 31 March (take off a month or so to be conservative, say 1.5mmbo & for the ultra conservative reduce to 1.0m).

    Using $US70 @ NZ/USD 0.70 (again very simplistic thinking) = $100 per barrel or $100m revenue

    Is a $260m MC reasonable for a company generating that sort of revenue?

    It won't last at those levels for much more than a year, but with Pike & Kupe to come online 2008/09, as a yield type play we can now start to apply a forward P/E ratio to value NZO.

    Now, lets estimate the numbers, say EBITDA of $80m?, & NPAT of $52m?(no tax due to continuity of losses carried forward).

    I used NPAT of $52m to illustrate EPS @ 20c, & as of today the market says a P/E of 5 @ $1?

    Naw, to cheap for my mind, givien the POO & FX rates allow for more upside & these figures exclude other projects...

    Conclusion: $1 today is buying more than $1, real question is how much more are you getting?

    NB, Figures are all illustrative only, please DYOR.

  8. #48
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    Quote Originally Posted by Balance View Post
    Paying $1.00 for $1.00 makes no sense.
    were they?
    are you comparing $250m market cap and max revenue of $250m?

  9. #49
    Senior Member upside_umop's Avatar
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    Default NPV TAP cps

    Quote Originally Posted by Balance View Post
    Profit = Revenues less costs less interest.

    So what is Tui worth to NZO NPV? I do not know but you all seem to but don't want to post it ?
    I have quickly updated waihokke's (spelt along those lines) spreadsheet by applying current market rates:

    -oil from $55 to $75
    -exchange rate from 0.67 to 0.70
    -NPV starting from now rather than 3 years
    -updated the recoverable amount of oil from 25mmboe to 32mmboe
    -updated number of shares to 262.5 million

    All other factors left constant. The factors above have potential for upside, but also for downside.

    Given this, it gives NZO a NPV of $177 million = 67.5 cps
    All in all, this is a high case scenario.

    A couple of things i noticed in the spreadsheet that i didnt fix were:

    1) The oil flows were for 7 years, rather than 18 expected this will adversly affect the NPV of the project.

    2) Tax benefits were not included, this will positively affect the NPV.

    For the above two, I havent calculated net effect, as it was relatively quick fix of the current spreadsheet, but you get the overall jist of things.
    By the way - it's upside_down, not upside_umop

  10. #50
    Legend shasta's Avatar
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    Quote Originally Posted by upside_umop View Post
    I have quickly updated waihokke's (spelt along those lines) spreadsheet by applying current market rates:

    -oil from $55 to $75
    -exchange rate from 0.67 to 0.70
    -NPV starting from now rather than 3 years
    -updated the recoverable amount of oil from 25mmboe to 32mmboe
    -updated number of shares to 262.5 million

    All other factors left constant. The factors above have potential for upside, but also for downside.

    Given this, it gives NZO a NPV of $177 million = 67.5 cps
    All in all, this is a high case scenario.

    A couple of things i noticed in the spreadsheet that i didnt fix were:

    1) The oil flows were for 7 years, rather than 18 expected this will adversly affect the NPV of the project.

    2) Tax benefits were not included, this will positively affect the NPV.

    For the above two, I havent calculated net effect, as it was relatively quick fix of the current spreadsheet, but you get the overall jist of things.
    What on earth discount were you using, NPV of $177m = one full year of revenue @ 50k BOPD & this project will go for around 10 years!

    Remember the oil is flowing NOW, so the discount applied should be low - mid single digits.

    The Tax benefit is around $40m or around 14cps itself.

    I would also argue the POO will be higher & the FX rate lower...

    Look at my earlier post with extremely conservative figures!

    PS Its Waaihoek

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