NZ Oil & Gas (NZO)

[mistaTea]

Thanks mistaTea. i have been buying on the ASX, such a good price, but when do i say enough..........!....?

Unfortunately, volumes on the ASX are pretty much non-existent. This has surprised me as I really did think there would be significant interest in this drill by Aussie investors.

Given the enormous potential upside, I would have thought the stock would have started trading at AU75c and then kept increasing from there as the drill progressed. But, no.

Now we have this weird situation whereby CUE is valued as being worth $8M more than NZO?! Considering we own half of Cue, this seems very odd to me.

CUE Market CAP = AU$118M.
NZO share = AU$59M.
NZO Market Cap = AU$110M.
NZO Market Cap MINUS Cue share = AU$110M - AU$59M = AU$51M.

After taking into account the funds escrowed for Ironbark, remaining cash held in the bank that is attributable to NZO = $50M.

So even though Ironbark has the potential to transform NZO into a company worth more than $2B, and even though we are within 1km of reaching the Primary Target...according to Mr Market, NZO is effectively only worth the cash held in the bank?


If people want to buy cheap Cue shares to gain exposure, they should really be buying NZO at current prices.

[Davexl]

Thinking hard about the risks of Ironbark not succeeding and the impact on the share price. Your options on disposal possibilities are somewhat encouraging to stay in the game. Have read the SRK report also and think that at the end of the day, there are only so many chances to take the risk to win something this large in life, but sizing the level of risk to accept in a portfolio is no easy question. Risk / Reward are both High and Petro-Geology knowledge at depths being considered remain speculative, with many other farm-in players turning down the opportunity earlier, not that we know the reasons behind that (after confidential due diligence).

Still - I'm in!

That's the bit that still bugs me, I keep wondering what the Aussi punters might know that we mostly don't...

[mike2020]

I think its pretty simple. I invested in NZO pre the soa offer and it was actively traded around that time but last I looked you can barely buy or sell a parcel to buy lunch. CUE I invested in on the day they put the soa out there and I have no regrets. The info I gained around that time from here was invaluable and I appreciate that, if I wanted more or less NZO I could ALMOST be accused of manipulation (tongue in cheek).

[mistaTea]

That's the bit that still bugs me, I keep wondering what the Aussi punters might know that we mostly don't...

Yes, but at the current quoted value of the shares (effectively just cash in the bank as per my previous post), the market is essentially saying that Ironbark is worth $0.

That is very mysterious indeed. And I do not think that BP would be forking out $40M - $50M for their share of the drill for a prospect that was certainly worth $0!

Even if Ironbark only had a 5% chance (as per the number touted in the SOA)...and best reserve estimate is worth $9.2B. In theory the value of NZO's total share of the prospect today should be $115M (70c/share). That is in addition to the value of the existing business ($50M cash, 4% Kupe, 50.04% of Cue) which the market reckoned was worth ~$70 - 80M before NZO farmed into Ironbark.

So in theory, even at a low 5% success probability, the value of NZO should be $115M Ironbark + $70 to $80M Core Business value = $185M to $195M ($1.12 to $1.18 per share).

And of course, though we know that ultimate success is far from certain...the odds of Ironbark coming through are much higher than 5%.

[Fabs37]

Just curious, Success or Failure.

WHAT'S stopping the Companie from moving out of NZ and list elsewhere???

Also not much planned for the future it seems, so idling along like in the past??

[mistaTea]

Crackity, a former ST poster, shared this timely article with me.

Oh how things can go expensively wrong! And, on a probability point of view, remember we are more likely to read a article like this about Ironbark instead of a success story!

I am still optimistic though!

https://thewest.com.au/business/fina...-ya-354896.amp

[mistaTea]

Just curious, Success or Failure.

WHAT'S stopping the Companie from moving out of NZ and list elsewhere???

Also not much planned for the future it seems, so idling along like in the past??

If Ironbark does not succeed, I vote we liquidate. Absolutely nothing else going for the company imo.

[mistaTea]

https://www.energyvoice.com/oilandga...oration-spend/

References Ironbark:

"Ironbark-1, in permit WA-359-P in the Carnarvon basin and about 50 kms from the existing North West Shelf LNG complex, is expected to hit its target depth of 5,668 metres in second half January. If the probe confirms the 15 trillion cubic feet gas target it would be big news for BP and transformational for the other partners, which include Cue Energy, Beach Energy and New Zealand Oil and Gas."

[mistaTea]

Here is the full article which included the $9.2B Citi valuation...

https://hotcopper.com.au/attachments...2020145602.pdf

[fish]

Here is the full article which included the $9.2B Citi valuation...

https://hotcopper.com.au/attachments...2020145602.pdf

Which would make nzog (including its share of CUE ) valued at 2.4 billion in the event of success!
There is no logic that I can see why the NZO sp has not doubled as has the CUE sp in the past 8 months .
I wish it had as I keep being tempted to buy more .