NZ Oil & Gas (NZO)

[mistaTea]

So that infographic showing the $54.7M uncommitted NZOG funds made me snort into my coffee this morning. The information is completely true of course, but somewhat misleading in how it is represented.

They seem to be going to great pains to emphasise the fact that the financial statements are consolidated with Cue's this quarter (when they have not even mentioned that explicitly in the past...)

The fact that $35.5M of the available cash is earmarked for Ironbark (between Cue and NZOG) is somewhat irrelevant. That is still our money, which we choose to use for investment (in this case an exploration well in Australia).

So to present an infographic that suggests we only actually have $55M left is a nonsense.

The reality is, Cue hold $26M in cash. So we have to deduct approx half of that from the consolidated cash balance to get a better idea of how much cash NZOG holds.

By my math, $105M - $13M = $92M attributable to NZOG shareholders (56c/share in cash alone). Yes, we will spend millions drilling Ironbark in anticipation of the large upside - but let's not pretend the money doesn't exist and isn't ours.

The 62 cent offer is looking worse by the day imo.

[mistaTea]

Looks like this particular drill is estimated at costing a lot less than I originally thought too. Only about $30M likely for the exploration well (not $100M). Maybe allow up to $50M if costs blow out.

http://nzx-prod-s7fsd7f98s.s3-websit...973/284201.pdf

So NZOG would need to pay $4.5M. Hell, let's double that and round up to $10M to allow for cost blow outs and the amount we need to carry CUE for...

A very small investment required, for a potentially huge (and I mean HUGE) upside. If we were a gospel choir I'd be demanding an AMEN right about now. Possible even a HALLELUJAH!

Oh, and don't forget my post from a week ago. The actual cost to drill a well in Ironbark is estimated by Cue to only be about $30M.

NZOG will, quite sensibly, include a reasonably large contingency as there will certainly be some unforeseen costs during the drill.

However, stressing that a worst-case-scenario amount of cash is tied up in Ironbark (and that we should pretend it doesn't exist, and isn't ours...and therefore should not really be included in a fair figure for how much the business is worth...) is madness.

NZOG effectively control just shy of 26% of Ironbark. So, in the best case scenario, we would be on the hook for only 0.26 x 30 = $8M. Add another couple of mil for sweeteners paid to Cue etc and call it $10M. In that scenario, if we drill a well and it turns out dry we would still have approx $80M cash left. Even if costs blow out, and we double that...we would still be left with $70M. Not ideal, but not a disaster either.

So the $35M shown includes a Hell of a lot of contingency. Which, as I say, is not necessarily wrong to do - probably quite sensible actually - but to pretend that the money does not exist today, and is probably all going to be written off anyway is just nuts.

Right now, we hold 56cents/share in cash alone. If OGOG want to induce us to sell out shares, then let's recognise that and come back with a purchase offer price that actually makes sense (I suggest their current offer needs to be tripled - and probably actually quadrupled - before we can sensibly begin to negotiate).

[digger]

This place is getting more interesting by the day. When I read the way OGOG is trying to fug the accounts of NZO I remembered the first farm I sold to buy the present one. The deal nearly fell over because my buyer,for some stupid reasoning, didn't want the money lenders [bank] to know he had just bought a new tractor. By keeping that fact hidden his equity ratio was too little.So I told the bank even though I had sort of agreed not to. Then the bank was happy and in fact gave us both a lecture on showing all your equity on the balance sheet.
Now I know OGOG know all about handing balance sheets but in this case they are going out of their way to cloud the issue and assuming enought of us will fall for the small sum of money left uncommited. All monies invested have to be accounted,just as my farm buyer found out. This invested money into Ironbank is only nil if the well should be dry.OGOG is saying by their actions that is the case now. It isn't. If they wanted to be positive about it they could have just as easily have added another 100 million or more.
I have been trying without success to put a value on Iron Bank.In the end the most positive thing I can see for keeping my investment in NZO is that OGOG wants me out and the lot for themselves. They have some new technology and know the chances of success is far higher than they are letting on.
The finanicals released today were the manipulated propaganda rubbish I expected. Notice no positive comments. Imagain if a cash issue was coming up. we would have been bombbarded with positives. Like the higher oil prices,etc ---but none of that. Just told that the money into IronBank is not ours,or so the accounts would suggest.
When is Mac Tse Tung little red book coming out.

[Sideshow Bob]

There is some little unknown company called BP - who are the operator and hold 42.5%.

From my perspective, the fact that they are involved must ascribe some value.....

[mistaTea]

I have been trying without success to put a value on Iron Bank.

I don't think it is possible to put a specific value on Ironbark. I do think you can come up with a range of values though by making some reasonable assumptions.

I am not going to detail my workings here, but by my reckoning, if a discovery is made, Ironbark is probably worth somewhere between $20-$30 Billion of revenue attributable to NZOG. Possibly more.

You can make your own assumptions in terms of what that might mean in terms of profits, but we are talking really big money here.

[fish]

I don't think it is possible to put a specific value on Ironbark. I do think you can come up with a range of values though by making some reasonable assumptions.

I am not going to detail my workings here, but by my reckoning, if a discovery is made, Ironbark is probably worth somewhere between $20-$30 Billion of revenue attributable to NZOG. Possibly more.

You can make your own assumptions in terms of what that might mean in terms of profits, but we are talking really big money here.

Fully agree
NZO have about a 1 in 2 chance of a billion or so US revenue for around 20 years from this one exploration.
Then we have the other permits in NZ-not quite as lucrative as this but we know Clipper has gas.
Gas is the cleanest of the fossil fuels and the technology is here to process and export it sea-OGOG has the platforms to do this

NZO is in a happy place.
I am still trying to buy more but not getting many shares at 62 cents-might have to increase my bid!

[mistaTea]

Not fraudulent at all.
It is duplicitous in my opinion and NZO management are involved in this duplicity.
They have certainly lost my trust (possibly never had it )
Ofer didnt get to be one of the richest men in the world by fraud and their will be no fraud in this attempted takeover.
If NZ loses NZO it will be a potential miss on maybe 10 to 50 billion US dollars for the country.
Barque hydrcarbons need not be piped to the shore.
Maybe the greens will not have to protest
NZ will be worst of for the takeover

Yes, no cause to accuse anyone at NZOG and OGOG of committing fraud.

They are trying to be clever in how they present the facts and figures to us to reinforce a narrative that NZOG isn’t really worth much and we should sell it to them for cheap...

Hopefully enough of us aren’t silly enough to fall for it.

[RTM]

Fully agree
NZO have about a 1 in 2 chance of a billion or so US revenue for around 20 years from this one exploration.
Then we have the other permits in NZ-not quite as lucrative as this but we know Clipper has gas.
Gas is the cleanest of the fossil fuels and the technology is here to process and export it sea-OGOG has the platforms to do this

NZO is in a happy place.
I am still trying to buy more but not getting many shares at 62 cents-might have to increase my bid!

You can have half mine at $5.00

[Wiremu]

Interesting information from:http://www.sharechat.co.nz/article/8...basin-omv.html

"The hydrocarbon potential of the deep sedimentary rock in the Great South Basin, and the Canterbury Basin to the north, has long been recognised. There are proven petroleum systems in the region but drilling has been sporadic since the 1970s and activity dried up after the plunge in oil prices late 2014.

Ten of the 14 wells drilled in the Canterbury-GSB basins have encountered hydrocarbons, with four delivering sub-commercial discoveries.

Vienna-based OMV has previously estimated the potential resource in just the key prospects in the permits held by it, New Zealand Oil & Gas and Beach Energy, at the equivalent of almost 3.7 billion barrels of oil and gas. The two basins cover roughly 160,000 square-kilometres – four-times larger than the producing and geologically related Taranaki basin.

[fish]

You can have half mine at $5.00

I would be interested in an option to buy at that price in 2 to 3 years time
Cheers