NZ Oil & Gas (NZO)

[Lion]

I don't know much detail about Chapter 11 (probably less than you, mistatea) but I do believe a company in Chapter 11 can keep on trading.

Here's a bit from Wikipedia on the subject:

When a business is unable to service its debt or pay its creditors, the business or its creditors can file with a federal bankruptcy court for protection under either Chapter 7 or Chapter 11.


In Chapter 7, the business ceases operations, a trustee sells all of its assets, and then distributes the proceeds to its creditors. Any residual amount is returned to the owners of the company.[2]


In Chapter 11, in most instances the debtor remains in control of its business operations as a "debtor in possession", and is subject to the oversight and jurisdiction of the court.


Note the word "protection".

By the way, you have said recently the Ironbark drill is set for early 2021. My latest information was still September this year. Any comment?

Here's a cheeky thought - maybe the Ocean Onyx is looking for work now?

But nothing is certain these days.

Aus. gas prices have held up quite well.

[Arthur]

Beach are good operators. They have a glut of cash and a diverse portfolio. In the unlikely event they are on the wrong side of this they will just shrug it off.

[mistaTea]

By the way, you have said recently the Ironbark drill is set for early 2021. My latest information was still September this year. Any comment?

This was from the last NZX update (on 20 March)

"Smooth progress is being made on our exciting Ironbark gas prospect in Western Australia. The well remains on budget and is targeted to drill end 2020/early 2021. The contracted rig, the Ocean Apex, is currently working on a multi-well campaign and its availability will determine when we can start drilling."

With COVID etc, I reckon you can be safe to assume early 2021.

[digger]

I have often put my support in to drilling Ironbark. Remember we all fought the SOA to keep our access to Ironbark intact.

Well Covid-19 has in so many ways flipped just about everything on its head---probably the oil industry the most. Well maybe it is the airline business. I am sure all readers must have been in the same shock as I was to read about WTI being settled at -37.

So to sum up maybe NZO should reconsider any type of drilling in this upside down changed world we find ourselves in. Many oil firms are going broke or on there last legs. Buying up distressed assets under these very changed times with an associated certainty of 100% of getting a return is now probably better than the longer shot of a larger asset with smaller certainty of success.
How the world has changed in the last few months.Back three months ago I would have given nil chance I would have said what I have outlined above. But for sure the world has changed and now NZO needs a very close look at which way is up in this new environment.

[blackcap]

Quarterly reads well.
https://www.nzx.com/announcements/352338

I like this bit: "We see opportunities coming to market as peers with weaker balance sheets exit. The board is reviewing our acquisition strategy and we are currently looking for producing assets that fit the cash avaialable on our balance sheet."

Also they have cash now of $115m so well above market capitalisation. Time to buy some more.

[mistaTea]

Quarterly reads well.
https://www.nzx.com/announcements/352338

I like this bit: "We see opportunities coming to market as peers with weaker balance sheets exit. The board is reviewing our acquisition strategy and we are currently looking for producing assets that fit the cash avaialable on our balance sheet."

Also they have cash now of $115m so well above market capitalisation. Time to buy some more.

Agreed, good quarterly update. Hopefully there are attractive opportunities they can exploit and our patience sitting in cash pays off. Would be happy to borrow too since money is so cheap if it meant we could grab a meaningful share of the equity of a producing asset at the right price.

With regards to the $115M cash - don’t forget that is on a consolidated basis. NZOG does not have $115M. Need to deduct the 49.96% of cues cash that does not belong to us.

Hopefully no big delays to Ironbark. As it is a gas target I don’t think the current oil price volatility affects the ‘to drill or not to drill’ business case.

[Fabs37]

[QUOTE=blackcap;811907]

REVIEWING THE BOARDS AQUISITIONS STRATEGY.

A bit cute coming from what must be the highest renumerated management reviewing board around.
Like a stuck record, exept this - hard work - has been going on for well over 10 years.

Glad for them, they can do it from home now

Hoping to be wrong, about a 5 % chance.[ Damn her is that 5% chance again ]

[k14]

Quarterly reads well.
https://www.nzx.com/announcements/352338

I like this bit: "We see opportunities coming to market as peers with weaker balance sheets exit. The board is reviewing our acquisition strategy and we are currently looking for producing assets that fit the cash avaialable on our balance sheet."

Also they have cash now of $115m so well above market capitalisation. Time to buy some more.

That's all well and good, but how do they add value if they acquire anything? Do they have in house expertise at turning around money loosing assets that alternative companies don't have?

[blackcap]

That's all well and good, but how do they add value if they acquire anything? Do they have in house expertise at turning around money loosing assets that alternative companies don't have?

I'm thinking more along the lines of companies that are going to the wall because of the low oil prices, but would otherwise be profitable. But what would I know, I am no expert in these matters. They have the cash to sit this period out while other operators may not and be a distressed seller thus giving NZO the ability to acquire the asset at less than fair value?

[mistaTea]

https://www.energynewsbulletin.net/i...-by-oil-crisis

Let's hope Ironbark is not included in the savage CAPEX cuts BP are forced to make at the moment.

In theory, because this is a huge gas prospect (and not impacted by the oil price fiasco)...it should be one of the last projects BP would cut.

Still not sure if Covid will cause delays to when we spud though. Last commentary from NZOG were positive, but we shall have to wait and see.

On a positive note we find out what Level 2 will look like in about half an hour. Things would have to go horribly wrong from where we are now for them to keep us in L3...so I am 99.9% sure we will be in Level 2 by next weds.

I can't wait to visit my local cafe for a hearty breakfast that's for sure! I'm going to push the boat out - Big Breakfast and a large flat white! Go on, spoil me!