NZ Oil & Gas (NZO)

[barleeni]

In fairness you probably have much more knowledge of past management performance as I have only been following for circa 12 months, so your opinion is likely far more informed than mine. I do feel for them a touch though, as they would seem to be stuck between a rock and a hard place at present. And yes I agree, NZR management seems to be doing everything right at present. My only suggestion for NZO is that I would have been very happy if they had brought back ALL of my shares for $0.75, my holding was small enough beforehand..... now its so small Its not worth selling at the current deflated value... sigh. Fortunately I do hold NZR which offsets the oil price fluctuation issues!

Hi barleeni
Fair point . However NZR (see my posts NZR) upswing is not only related to oil, exchange rates etc but many other factors of which management , and governance has been a good part. NZO on the other part is stuck with poor decision making at management and governance level in my opinion eg lack of sensible expansion plans - think Tripoli, poor investments - think Pike River or PPP to date , and now on a downward spiral into the sunset with desperate measures to secure further assets - including buying back shares at well over asset/ market value.
Hence my inability to endorse NZO's future after having an interest for over 20 years and watching it all unfold. Financially I wish it was otherwise, just as I think NZR is headed for, or over, $3 by next March (about 10%) . As a generalization I am not to keen on most management/governance in NZ as it is too closely linked,and treats minority owner/shareholders as a yearly inconvenience whom you caress, feed, water and put away quietly out of sight and mind. In the meantime I have to question the motivation of many decisions based on who will be the ultimate beneficiary.
-dodgy (owner/shareholder)

[BlackPeter]

Hi team,
I noticed that NZO was always good for controverse opinions circling around each other ... and at some stage it felt like the predecessor of the (now somewhat silenced) PEB thread. However - despite a number of quite strong and quite negative views it seems there are lots of shareholders left. I guess somebody must hold these 337 million odd shares?

I plan to look a bit closer into NZO since it just for some funny reason appeared on my short list of investment candidates (based on long term P/E, analyst recommendations, income potential).

First impressions (next to a quite busy thread):
Great long term PE (well, at current SP)
Stock analysts seem to have a quite high opinion of NZO: Consensus opinion just upgraded from a straight "outperform" and now hovering between "Outperform" and "Buy".
Share price forecast are between 74 cents and 116 cents (with a median of 75 cents).
Looking into the balance sheet: 210 Million of oil & gas assets and roughly 52 Million of cash (after the capital return) - and this at a market cap of 188.6 Million (at 56 cents)?

Not so good are obviously a board and management team with a long track record of "bad luck", significant mistakes and oversights (I guess, there are not that many good boards around in NZ, but NZO made e.g. at PRC times some outstanding mistakes. Judging from that (just read the PRC book - sad story in anybodys account): hard to explain the observed board performance unless we assume they all have been intoxicated and fully asleep during the job (which I obviously don't imply - I am sure there is a very innocent explanation for the unfortunate chain of oversights). Be it as it may - it appears they have been in the past pretty useless in doing a good boards job, but they still require the usual maintenance.

Question: Any indications that they learned since PRC from their mistakes?

And yes - the oil price trend is obviously an unknown - but at this stage I am rather confident that over time it will recover ... and hey, they have significant gas reserves as well.

So I guess the question is - is this (at 56 cents) the "Buy of the century" ... or are management and board that effective in destroying shareholder value that the capital will disappear before the shareholders can benefit from it?

Any recommendations which wheels to kick before I commit to this share (or otherwise)?

[fabs]

Hi team,
I noticed that NZO was always good for controverse opinions circling around each other ... and at some stage it felt like the predecessor of the (now somewhat silenced) PEB thread. However - despite a number of quite strong and quite negative views it seems there are lots of shareholders left. I guess somebody must hold these 337 million odd shares?

I plan to look a bit closer into NZO since it just for some funny reason appeared on my short list of investment candidates (based on long term P/E, analyst recommendations, income potential).

First impressions (next to a quite busy thread):
Great long term PE (well, at current SP)
Stock analysts seem to have a quite high opinion of NZO: Consensus opinion just upgraded from a straight "outperform" and now hovering between "Outperform" and "Buy".
Share price forecast are between 74 cents and 116 cents (with a median of 75 cents).
Looking into the balance sheet: 210 Million of oil & gas assets and roughly 52 Million of cash (after the capital return) - and this at a market cap of 188.6 Million (at 56 cents)?

Not so good are obviously a board and management team with a long track record of "bad luck", significant mistakes and oversights (I guess, there are not that many good boards around in NZ, but NZO made e.g. at PRC times some outstanding mistakes. Judging from that (just read the PRC book - sad story in anybodys account): hard to explain the observed board performance unless we assume they all have been intoxicated and fully asleep during the job (which I obviously don't imply - I am sure there is a very innocent explanation for the unfortunate chain of oversights). Be it as it may - it appears they have been in the past pretty useless in doing a good boards job, but they still require the usual maintenance.

Question: Any indications that they learned since PRC from their mistakes?

And yes - the oil price trend is obviously an unknown - but at this stage I am rather confident that over time it will recover ... and hey, they have significant gas reserves as well.

So I guess the question is - is this (at 56 cents) the "Buy of the century" ... or are management and board that effective in destroying shareholder value that the capital will disappear before the shareholders can benefit from it?

Any recommendations which wheels to kick before I commit to this share (or otherwise)?

SEEMS THE ONLY WINNER SO FAR ARE TODD ENERGY.
Being able to get rid of there holding for 10 cents plus, at what NZOs management assessed at 25% above NZOs stated value.
Yes hard to tell the future for a co. who has not won the investors trust or confidence for the last 7-9years.
As for the large no. of S/H most of which would have sold out long ago, but sitting trapped in this moribund co.
Yes if you are a risk taking gambler and get in for 56 cents or less maybe worth a punt, but i would guess the majority would have paid a great deal more and short or medium term outlook not looking flash.
But hey this is just my take on the Co. best to do your own post-research over along period, been in and out of this lot also over last 20 years,
Its just sad to see a co. that had so much going for it 7 years ago has not added any value over the same period, irregardless of some setbacks after all what is management for.
Most if not all of the present lot where not instrumental in discovery and development of Kupe & Tui so had it virtually handed to them on a platter and are also not even the operators, charming run and well paid too as there was always and still is plenty to feed on in the kitty.
Wish i was all wrong on this but that is where it is at now ---STILLLL

[dodgy]

Hi Fabs
Well written - 100% on the money. All I ask right now is hack through the back room hangers on starting with Public Relations to lower overheads and preserve something while Tui is wound down and Kupe still has 14 or so years before extinction. Run it like an investment co (Knight should be better at that) whilst coat tailing on successful operators efforts by farming in if warranted. Resume divs to stabilize the share price at first opportunity. Don't expand PPP or Cue investments.
If only!! Otherwise a slow walk to the sunset and zip value for all.
Regards
-d (OWNER / SHAREHOLDER )

[Bella52]

Hi team,
I noticed that NZO was always good for controverse opinions circling around each other ... and at some stage it felt like the predecessor of the (now somewhat silenced) PEB thread. However - despite a number of quite strong and quite negative views it seems there are lots of shareholders left. I guess somebody must hold these 337 million odd shares?

I plan to look a bit closer into NZO since it just for some funny reason appeared on my short list of investment candidates (based on long term P/E, analyst recommendations, income potential).

First impressions (next to a quite busy thread):
Great long term PE (well, at current SP)
Stock analysts seem to have a quite high opinion of NZO: Consensus opinion just upgraded from a straight "outperform" and now hovering between "Outperform" and "Buy".
Share price forecast are between 74 cents and 116 cents (with a median of 75 cents).
Looking into the balance sheet: 210 Million of oil & gas assets and roughly 52 Million of cash (after the capital return) - and this at a market cap of 188.6 Million (at 56 cents)?

Not so good are obviously a board and management team with a long track record of "bad luck", significant mistakes and oversights (I guess, there are not that many good boards around in NZ, but NZO made e.g. at PRC times some outstanding mistakes. Judging from that (just read the PRC book - sad story in anybodys account): hard to explain the observed board performance unless we assume they all have been intoxicated and fully asleep during the job (which I obviously don't imply - I am sure there is a very innocent explanation for the unfortunate chain of oversights). Be it as it may - it appears they have been in the past pretty useless in doing a good boards job, but they still require the usual maintenance.

Question: Any indications that they learned since PRC from their mistakes?

And yes - the oil price trend is obviously an unknown - but at this stage I am rather confident that over time it will recover ... and hey, they have significant gas reserves as well.

So I guess the question is - is this (at 56 cents) the "Buy of the century" ... or are management and board that effective in destroying shareholder value that the capital will disappear before the shareholders can benefit from it?

Any recommendations which wheels to kick before I commit to this share (or otherwise)?

BP - you should note that no one currently in the Board or management was with the company when they controlled Pike, ie pre IPO.

[Beagle]

SEEMS THE ONLY WINNER SO FAR ARE TODD ENERGY.
Being able to get rid of there holding for 10 cents plus, at what NZOs management assessed at 25% above NZOs stated value.
Yes hard to tell the future for a co. who has not won the investors trust or confidence for the last 7-9years.
As for the large no. of S/H most of which would have sold out long ago, but sitting trapped in this moribund co.
Yes if you are a risk taking gambler and get in for 56 cents or less maybe worth a punt, but i would guess the majority would have paid a great deal more and short or medium term outlook not looking flash.
But hey this is just my take on the Co. best to do your own post-research over along period, been in and out of this lot also over last 20 years,
Its just sad to see a co. that had so much going for it 7 years ago has not added any value over the same period, irregardless of some setbacks after all what is management for.
Most if not all of the present lot where not instrumental in discovery and development of Kupe & Tui so had it virtually handed to them on a platter and are also not even the operators, charming run and well paid too as there was always and still is plenty to feed on in the kitty.
Wish i was all wrong on this but that is where it is at now ---STILLLL

Excellent summary and is, I agree, bang on the money. I've just been reading a brokers report that values the company at 74 cents and rates the company a buy. There's one very, very important factor they overlook. If you discount their DCF model for the net present value of all future corporate overhead the company has very little value at all.

[BlackPeter]

BP - you should note that no one currently in the Board or management was with the company when they controlled Pike, ie pre IPO.

True, but at least two of them started with NZO board / management well prior to the catastrophe. What did they do to prevent NZO throwing good money after bad (remember the consistent demand of PRC for additional cash injections and credit - given their continuous history of delays)?

They could have saved not just significant shareholder funds, but even the lives of the 29 ... (even if NZO was at that stage just a "cornerstone shareholder" of PRC.

Recommend to read "Tragedy at Pike River Mine" by Rebecca MacFie, though very sobering reading if you believe in the value of NZO's and PRC's boards (admittedly - at the time) ....

[barleeni]

NZO now owns 41.55% of Cue?? Is that correct? (referring to the 4th supplementary bidders statement)

I just had a look, seems it is correct.. almost 100,000,000 shares were picked up this morning by NZO. NZO's bank balance must be getting a bit dry!

[pietrade]

The CUE site news shows NZO now holding 41.95% of the shares.

[dodgy]

The CUE site news shows NZO now holding 41.95% of the shares.

Hi pietrade
Is this good? I was always of the understanding when one dog ate another dog you very rarely end up with a better dog, better fed maybe (fees) but not a better performer.

-d (owner/shareholder of both - don't ask why)