NZ Oil & Gas (NZO)

[shasta]

Realistically, it is more likely receiver's fees will bleed PRC dry before the mine and assets are sold off. Even if NZO was interested they couldn't out bid a cashed up overseas miner if the mine was put up for sale.
At best they might recover their secured debt, while PRC shareholders won't get back a red cent.
A right royal gravy train for the receivers and probably a cheap coal mine for an overseas investor.

The strongman mine reopened 1 month after that disaster but this ones covered in so much 21st century regulatory red tape it's not funny. Why the hell should they wait until the Royal Commission is over to approve Pike for open open cast mining. What possible difference would it make but then it can't be sold until it can reopen and it can't reopen until after the Royal Commission of Inquiry.
Meanwhile the receivers will be charging $500+ an hour for services rendered and the $500 is a low ball park figure.

The Pike Receivers only have access to the $10.9m - not too bill away the insurance money!

NZO also have some "coal rights" which will be worth something to them, should someone buy Pike River as a going concern.

Yes, NZO will get the secured debt & if theres anything left they will receive a propotion of "x" cents in the dollar, same as the bank, ird & other secured creditors.

I doubt any unsecured creditors will see anything

[Balance]

If the government allows open-cast, watch for a bidding war on access to potentially US$10 billion worth of coal.

[fish]

If the government allows open-cast, watch for a bidding war on access to potentially US$10 billion worth of coal.

I doubt if nzo will be part of that war-although they might put in a low offer.
They have stated they only want to be in oil .
personally if it became open cast I would like them to bid.
With Tapis at $114 this equates to $152 nz a barrel .With over 4months to go to the end of the financial year their why would they announce at this stage no dividend ?
?as suggested maybe to have a treasure chest in case of a bidding war for pike .
But possible because its good pr to show that nzo is suffering because of pike and has no more funds to make available to assist in the retrieval .
I dont know but I suspect games are being played at the expense of the nzo shareholder to make such a premature announcement.
Maybe they might announce a special dividend at the end of the year if the poo stays up !

[digger]

I doubt if nzo will be part of that war-although they might put in a low offer.
They have stated they only want to be in oil .
personally if it became open cast I would like them to bid.
With Tapis at $114 this equates to $152 nz a barrel .With over 4months to go to the end of the financial year their why would they announce at this stage no dividend ?
?as suggested maybe to have a treasure chest in case of a bidding war for pike .
But possible because its good pr to show that nzo is suffering because of pike and has no more funds to make available to assist in the retrieval .
I dont know but I suspect games are being played at the expense of the nzo shareholder to make such a premature announcement.
Maybe they might announce a special dividend at the end of the year if the poo stays up !

Fish you and i read the end of year report slightly differently. Perhaps it where we are coming from. About 15 years ago when i was still an active dairy farmer we farmers had become conditioned to getting extra money every October.This particular year things were not looking to good coming up to October and the dairy managment knew they could not meet expectations so played the farmers along a bit.It was announced that we had already been overpayed on realisations and would have money deducted from our Payout come Octomber.There was an uproar and when Octomber did come around and the Dairy industry left our monthly income with nil deductions and nil increase they went from zero to hero.And just imagine how it would have been if nothing was ever for said and we just got a nil increase.Then they would have gone from hero to zero.It all comes down to expectations. And by the way i did say to others dairy farmers at the first mention of monies coming out of our accounts that i thought it was just a play to cover a nil increase,but at the time to not much effect.
Now to NZO.The end Dec report shows 99 million loss most being unrealised but a particulary bad one by any account.The directors have merely stated that they do not intend to pay a dividend which is not the same as there will be no dividend.To me it reads that for sure under the track of the last 6 months the intension will be clearly no dividend,but the door is still open if things do change radically the intension could also change.The pike affair is still wide open and could change as could extra income from oil sales neither of which is under the control of the board.
So what i read out of the report is let go of any automatic right you might have that a divident will take place.

[winner69]

Shasta and Corporate are touted as accounting gurus and might be able to elaborate on this

Because of the writedowns NZO now has negative retained earnings ... several companies (large ones at that) over the years have ceased dividends while in this state. In theory there are no retained earnings left at the moment to pay a dividend

Is this an accounting requirement or just a prudent practice?

Accountant (Shasta? / finance directors (Corporate?) view to clarify the situation could help the discussion

[fish]

Fish you and i read the end of year report slightly differently. Perhaps it where we are coming from. About 15 years ago when i was still an active dairy farmer we farmers had become conditioned to getting extra money every October.This particular year things were not looking to good coming up to October and the dairy managment knew they could not meet expectations so played the farmers along a bit.It was announced that we had already been overpayed on realisations and would have money deducted from our Payout come Octomber.There was an uproar and when Octomber did come around and the Dairy industry left our monthly income with nil deductions and nil increase they went from zero to hero.And just imagine how it would have been if nothing was ever for said and we just got a nil increase.Then they would have gone from hero to zero.It all comes down to expectations. And by the way i did say to others dairy farmers at the first mention of monies coming out of our accounts that i thought it was just a play to cover a nil increase,but at the time to not much effect.
Now to NZO.The end Dec report shows 99 million loss most being unrealised but a particulary bad one by any account.The directors have merely stated that they do not intend to pay a dividend which is not the same as there will be no dividend.To me it reads that for sure under the track of the last 6 months the intension will be clearly no dividend,but the door is still open if things do change radically the intension could also change.The pike affair is still wide open and could change as could extra income from oil sales neither of which is under the control of the board.
So what i read out of the report is let go of any automatic right you might have that a divident will take place.

Thanks for that assesment digger . It certainly makes the premature announcement explicable and leaves a bit of hope for a dividend-particularly if oil prices stay high .

[winner69]

Been fascinated with this thread for the last 10 years and really amazed at the passion and loyalty you guys display .... but to me NZO has just been a line on a chart and at times a lucrative line on a chart

However your (collective) disgust at missing out on a dividend this year and then finding out that NZO retained earnings have gone into negative made me have a look at their cash flows over the years

I don't really need to say much because the chart below says it all. Useing a variant of a methodology used by accounting guru Alan Robb the red line represents the cumulative free cash flow plus dividends paid since 2002.

Attachment 3227
Since 2002 a net $300m has flowed out of the company (including $60m to you guys in dividends and somewhere along the line i think I got one as well) - in spite of selling heaps of oil since 2008 (I do note that cash flows from these seem to be steadily diminishing). Over this period (since 2002) shareholders have pumped in an additional $400m.

I can see where you guys are coming from now with your sentiments many of you are going on about this being a plaything for a few highly paid execs (at the expense of shareholders).

Whatever an interesting exercise but now the lawns do beckon but maybe there is more than meets the eye as to why they are reluctant to pay divies this year ... and would still like to hear from Shasta and Corporate as to whether they can or if it is prudent to pay divies when retained earnings are negative

[shasta]

Shasta and Corporate are touted as accounting gurus and might be able to elaborate on this

Because of the writedowns NZO now has negative retained earnings ... several companies (large ones at that) over the years have ceased dividends while in this state. In theory there are no retained earnings left at the moment to pay a dividend

Is this an accounting requirement or just a prudent practice?

Accountant (Shasta? / finance directors (Corporate?) view to clarify the situation could help the discussion

Well technically if they have negative retained earnings they may not pass the "solvency test" for paying out a dividend, even if they have the cash to do so.

As they also have debt ($63.0m re Kupe), there may be some banking convenants imposed on them as well, i'm not sure about this issue.

Am looking at a possible return to the CA environment, so i should brush up on these matters!

[BigBob]

Shasta and Corporate are touted as accounting gurus and might be able to elaborate on this

Because of the writedowns NZO now has negative retained earnings ... several companies (large ones at that) over the years have ceased dividends while in this state. In theory there are no retained earnings left at the moment to pay a dividend

Is this an accounting requirement or just a prudent practice?

Accountant (Shasta? / finance directors (Corporate?) view to clarify the situation could help the discussion

Wouldn't a dividend also come without imputation credits if the company has not had any taxable profit...?

[shasta]

Wouldn't a dividend also come without imputation credits if the company has not had any taxable profit...?

Depends what tax they paid during the year & what imputation credits were available, if there were any it would have to be partly imputed.