NZ Oil & Gas (NZO)

[fish]

Thanks fish.
And Beagle, there have been two substantial buybacks in my time too, so it's very hard to know just where one stands with regards dividends and average cost price.

But we know how things stand with the company now, don't we?

I have a theory about the game they are playing but it would be inappropriate to share it on this forum.
The preferred value for nzo stake in Ironbark on the pkf report is A$53.55 million-and it states that is conservative taking
account of the geological and technical uncertainty.That report of course was well before the go ahead for the drill.Who knows how much greater it would be now.

[mistaTea]

"The independent directors also take this opportunity to comment on Cue’s previous statements indicating that Ironbark has a “25% chance of success”. It should be noted that this figure refers to Cue’s assessment of “geological success” – i.e., the chance that hydrocarbons will be found in the geological structure. It does not measure the chance of “commercial success” – i.e. that any such discovery will then be capable of economic commercial exploitation. SRK Consulting uses the same 25% geological chance of success in its independent assessment that then determines a 5% chance of commercial success."

Either Cue was lying by omission when they were highlighting the 25% geological success figure (and not clarifying anywhere in their reports that the real probability of true success is only 5%), or the current lot are trying to pump up a convenient valuation to get the sale through.

I would think that 5% success would be a very important statistic to put out in the various Cue and NZOG reports, given investors make buy and sell decisions based on this type of information.

What is further perplexing then, is that if the Ironbark project is almost certainly going to fail (95% certain), then:

1. Why the Hell have we farmed in 15% and gained significantly more exposure? We already had exposure via Cue. Seems reckless use of our money then with those odds.
2. Why is OGOG being so generous to us, offering to buy us out and further expose themselves to this almost-certainly doomed prospect?
3. Why have BP and Beach been so keen to collectively purchase 63.5% of the permit? Perhaps they are just casino gamblers like our lot apparently are, and 5% odds of success are just fine by them?

I mean, the Directors must know that their story is incredibly suspicious. Even now, I am trying to find a way to see the best in these people. But I have to say, it is becoming increasingly difficult.

[mistaTea]

I had an epiphany on my commute home today regarding the "Corporate Overheads" debacle. I do my best thinking in the car, you know.

Clearly, my assertion that they deducted roughly $21 million from our cash in the bank, to ensure we keep Mr Jeffries and company in the lifestyle they have become accustomed to for the next 8 years was preposterous. Nobody would actually do that!

So it got me thinking, there is only one other plausible way I could look at this. Of course! They must be deducting future rents and wages for the next 8 years from the only producing asset that NZOG owns! Yes, by God I've got it! Totally makes sense.

But hang on a second. Didn't their mates at Northington value Kupe at $24 million? Well, this is perplexing because we apparently owe $28 million in future wages, office rent and probably some Business Class flights to various conferences until 2027!

In which case, we are effectively paying OGOG $4 million to take Kupe off our hands! What a truly wonderful deal! - for them.

Who would have thought that 2 million barrels of oil equivalent in reserves had become so worthless in 2019! That we have essentially entered negative interest rate economics with this asset now!

Thank God for OGOG and their generosity.

[fish]

"The independent directors also take this opportunity to comment on Cue’s previous statements indicating that Ironbark has a “25% chance of success”. It should be noted that this figure refers to Cue’s assessment of “geological success” – i.e., the chance that hydrocarbons will be found in the geological structure. It does not measure the chance of “commercial success” – i.e. that any such discovery will then be capable of economic commercial exploitation. SRK Consulting uses the same 25% geological chance of success in its independent assessment that then determines a 5% chance of commercial success."

Either Cue was lying by omission when they were highlighting the 25% geological success figure (and not clarifying anywhere in their reports that the real probability of true success is only 5%), or the current lot are trying to pump up a convenient valuation to get the sale through.

I would think that 5% success would be a very important statistic to put out in the various Cue and NZOG reports, given investors make buy and sell decisions based on this type of information.

What is further perplexing then, is that if the Ironbark project is almost certainly going to fail (95% certain), then:

1. Why the Hell have we farmed in 15% and gained significantly more exposure? We already had exposure via Cue. Seems reckless use of our money then with those odds.
2. Why is OGOG being so generous to us, offering to buy us out and further expose themselves to this almost-certainly doomed prospect?
3. Why have BP and Beach been so keen to collectively purchase 63.5% of the permit? Perhaps they are just casino gamblers like our lot apparently are, and 5% odds of success are just fine by them?

I mean, the Directors must know that their story is incredibly suspicious. Even now, I am trying to find a way to see the best in these people. But I have to say, it is becoming increasingly difficult.

Maybe its best if we stop trying to judge these people and leave it to the takeovers panel-I understand a complaint about the valuation has already been made.
Yesterdays nzx-nzo announcement appears totally misleading.BP simply do not drill deepwater if there is only a 1 in twenty chance of success.
srk consulting gives a preferred value of 53.55 million au
Instead of stating this they state a 1 in twenty chance of success.
As I see it they have breached rule 64 of the takeovers code.
They are best coming clean now rather than facing such penalties
Breach of the takeover code can result in massive fines and years in jail

[Beagle]

Thanks fish.
And Beagle, there have been two substantial buybacks in my time too, so it's very hard to know just where one stands with regards dividends and average cost price.

But we know how things stand with the company now, don't we?

I can't wait to fin another company where you put $1 in and get 60 cents out 38 years later. What a deal, sign me up lol

[RTM]

I can't wait to fin another company where you put $1 in and get 60 cents out 38 years later. What a deal, sign me up lol

Wasn't there an issue at $1.50 as well ? And didn't we get some PanPacific ? Can't recall the total history.....but as per Lion, I really have no idea where I stand with cost...let alone dividends. Had a look at a few...they were reasonable for a while.I don't think it is as bad as Beagle makes it to be, but not ideal, that's for sure.
My very first share bought when they first listed, IPO, I think.

[Lion]

A couple of minor corrections about Beach Energy. Their market cap is A$5.7b and they describe Ironbark as part of their frontier exploration portfolio, so maybe that 'f' word is appropriate here.

They have a 37.5% interest in the Canterbury Basin, where Clipper is, incidentally. You'd think that shows some confidence there too, wouldn't you?

(Not trying to ramp Beach, but their shared assets with NZO have some relevance)

P.S. RTM, I actually do have an estimate of my average price. I've kept a record of my total spent and dividing by current holding gives me an average of $1.104 But that's not taking into account the two capital restructurings (or buybacks, whatever they were called). They probably make a substantial difference to my calculations. I exercised a lot of options at $1.50 - ouch! And there have been dividends which have returned me about 48c.

(Oh, that brings my net cost to 62.4c - almost exactly what OGOG are offering me! But they ain't getting them!)

[fish]

A couple of minor corrections about Beach Energy. Their market cap is A$5.7b and they describe Ironbark as part of their frontier exploration portfolio, so maybe that 'f' word is appropriate here.

They have a 37.5% interest in the Canterbury Basin, where Clipper is, incidentally. You'd think that shows some confidence there too, wouldn't you?

(Not trying to ramp Beach, but their shared assets with NZO have some relevance)

P.S. RTM, I actually do have an estimate of my average price. I've kept a record of my total spent and dividing by current holding gives me an average of $1.11 But that's not taking into account the two capital restructurings (or buybacks, whatever they were called). They probably make a substantial difference to my calculations. I exercised a lot of options at $1.50 - ouch! And there have been dividends which have returned me about 43c.

(Oh, that brings my net cost close to what OGOG are offering me! But they ain't getting them!)

I remember exercising a 7 figure number of options so I have taken a big hit.
Wherever I look I cannot find the figure of Ironbark only having a 5% chance of financial success.I discussed this again today with my brother in-law who yet again confirmed that nobody is going to drill 5000 metres with only that chance.He worked for BP and still has contacts but says chances of financial success is commercially sensitive and would never be disclosed.In the canorvan basin geological success is not likely to be a financial failure-gave a 1 in a hundred chance of a geological success being a financial failure
Still doing research just in case I go to court on 31/10/19.If I have said anything misleading or incorrect please let me know on this forum as I want all my facts to be correct and transparent(I do not want to end up in Jail and broke)

Cue estimates the Ironbark prospect contains 15Tcf of prospective recoverable gas(2) at a 25% chance of success. Retention of 21.5% equity provides a company changing opportunity for Cue if the well is successful.”

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Posted on October 26, 2018 with tags Austr

[mistaTea]

Reweti from NBR wrote an article today for NBR.

https://www.nbr.co.nz/story/nz-oil-g...about-new-well

mistaTea even managed to make an appearance in his article.

[blackcap]

As an aside. Even if the scheme goes through, if you do vote ALL of your securities AGAINST, then I believe we have protections under Sec 110 and 111 of the companies Act and will get more than the 62 cents on offer. Can someone refute my argument?

Anyway voted all of mine Against a few days ago.