NZ Oil & Gas (NZO)

[mistaTea]

I decided to do the arithmetic on that question, blackcap. (I mean if there is no amalgamation, which, I agree, seems like a good idea)

An Australian ShareAnalysis article from June this year says a successful strike at Ironbark would have a ‘discovery value’ for NZO of $6.51 a share, for CUE of $1.31 and Beach (BPT) of 40c.

It’s not clear to me whether this discovery value is what the share price might become, or if it is on top of the existing SP.
Taking the lower option, the % increase on yesterday’s prices are 1042% for NZO, a remarkably similar 1048% for CUE and just 15% for Beach.

CUE does have less to lose though if Ironbark is not successful, as they have substantial other producing assets (and a drill result due any day now!)

NZO currently hold half of CUE, too, of course.

I think it is much simpler than that.

NZOG Market cap = approx $102M. If Cue thinks that $102M represents a fair value for NZOG and will generate a more attractive spread of costs over a combined asset base then they should be keen to do a merger (but in reverse whereby we end up with one entity listed on the Aussie stock exchange. A much better place for an Oil & Gas company to live given the current NZ political environment).

If Cue don't think NZOG is worth $102M then no point trying to go any further. Clearly, given I rejected both 62c and 74c I think NZOG is still on sale at 62c. But I don't speak for Cue.

We end up with a larger Cue listed on the ASX, with current NZO shareholders holding the majority of the shares in the 'Larger Cue'.

[blackcap]

I decided to do the arithmetic on that question, blackcap. (I mean if there is no amalgamation, which, I agree, seems like a good idea)

An Australian ShareAnalysis article from June this year says a successful strike at Ironbark would have a ‘discovery value’ for NZO of $6.51 a share, for CUE of $1.31 and Beach (BPT) of 40c.

It’s not clear to me whether this discovery value is what the share price might become, or if it is on top of the existing SP.
Taking the lower option, the % increase on yesterday’s prices are 1042% for NZO, a remarkably similar 1048% for CUE and just 15% for Beach.

CUE does have less to lose though if Ironbark is not successful, as they have substantial other producing assets (and a drill result due any day now!)

NZO currently hold half of CUE, too, of course.

My question is purely SP driven. If Ironbark were to fail what would the CUE SP be? If Ironbark were to fail what would the NZO SP be? I am guessing the NZO sp would go to about 45 cents (bottom) so that is a loss of 25%. I would think the Cue SP would go to 7? cents which represents a loss of 40%. But I could be wrong and on first glances you are right it does look very similar (the risk/reward trade off) so the merging of the two entities might be easier than at first thought.

[mistaTea]

To further clarify my thinking...

NZO MC = NZ$102M. That market value in theory takes into account the 50.04% of Cue shares held.

Cue MC = NZ$90M. Cue minority holders have ~50% of that, so their MC = NZ$45M.

The combined entity of NZO + minority Cue holders would theoretically have a Day 1 MC of NZ$147M then.

Cue ownership of 'Larger Cue' = $45M/$147M = 30.6% of the new entity. So the total value of their shares would be unchanged, however they own a smaller piece of a larger organisation that is much more efficient so far as costs go.

The combined entity will have a 36.5% stake in Ironbark. Current Cue minority holders would have 30.6% equity * 36.5% Ironbark = ~11% ownership. Right now they have ~50% equity of 21.5% Ironbark = ~10.75% effective ownership.

So at current market cap they would likely benefit slightly in terms of their Ironbark exposure. But the 0.25% is negligble in the scheme of things, and I reckon NZO shareholders would still go for it because the cost savings long term are so large.

[onlinesid]

Bought some at 0.625 coz hoping for change of government direction on the next election, fingers crossed

[mistaTea]

http://nzx-prod-s7fsd7f98s.s3-websit...739/313697.pdf

Looks like the Operator for Mahato is playing silly buggers.

Does not bode particularly well for the ongoing JV relationship.

[JBmurc]

http://nzx-prod-s7fsd7f98s.s3-websit...739/313697.pdf

Looks like the Operator for Mahato is playing silly buggers.

Does not bode particularly well for the ongoing JV relationship.

Yes not happy CUE is my largest holding and was very much looking to a positive drilling ann. too now see the major JV partner now wants CUE out !!! I just don't get it did CUE not front with the correct J/V agreed funds ??? for their 12.5% what are they in breach of ???

[Wiremu]

Progress on Ironbark: https://info.nopsema.gov.au/environm...82/show_public

Ironbark-1 will be the first well BP has drilled as operator for more than a decade.

[JBmurc]

Cue Energy Resources Limited (CUE or
Company) advises that the claimed cash call from the Operator of the Mahato PSC, Texcal
Mahato EP Ltd, which was the subject of the disputed default notice referred to in the ASX
announcement of 10th Dec 2019, has been paid by Cue.
Cue is not receiving information from the Operator as required under the Joint Operating
Agreement and is evaluating all available options to address this and other breaches under
this agreement.
The Company will keep the market informed of any material developments on this matter.

[mistaTea]

https://www.nzherald.co.nz/business/...ectid=12294692

Some pressure for the Climate Change Commission to review the offshore ban.

Meanwhile Megan Woods thinks everything is A-OK because we will have 11 years of proven gas left...and a bunch of existing exploration permits of which we have no idea how many will actually be drilled now due to the government's policy...and of those that are drilled...how many will actually strike.

The current lot are unlikely to listen to reason (they haven't so far!). Only a change in government will lead to a policy change in my view.

[fish]

https://www.nzherald.co.nz/business/...ectid=12294692

Some pressure for the Climate Change Commission to review the offshore ban.

Meanwhile Megan Woods thinks everything is A-OK because we will have 11 years of proven gas left...and a bunch of existing exploration permits of which we have no idea how many will actually be drilled now due to the government's policy...and of those that are drilled...how many will actually strike.

The current lot are unlikely to listen to reason (they haven't so far!). Only a change in government will lead to a policy change in my view.

We can only speculate about changes in government.
The truth needs to be known so people not governments force changes.
Your link is good and worth reading-Huntly is burning more coal than it has for a decade.
This is a very dirty deed and needs to be stopped.
The only way it can be stopped is more natural gas supply(technology can make natural gas carbon neutral and pollution free)