NZ Oil & Gas (NZO)

[mistaTea]

But at some point OGOG are going to want to realise some value from their controlling 70% NZO stake ..esp. if O&G prices continue higher .. what was their plan ? BUY and hold forever ...isn't ICE coming to an end ... surely they will want to T/O CUE via scrip deal merge all interests projects ..drop the NZX listing(whats the point ?) ..and see new ASX listing .. transform into a 150-200m Energy player thats goal is to grow production and to return some of the profits to S/Hs

The quoted value of NZO is of little consequence for them.

What other small investors pay to trade their shares on the open market is irrelevant.

All they will be interested in is how NZOG can be used as a strategic asset to eventually generate a high ROIC for them.

Whether the SP ever reflects full value is not important. What is important is NZO becoming a good earner for them so that they can get hold of the majority of the distributable FCF in the future so that they (OGOG) can use it to make other investments, possibly in other parts of the world.

They will view NZO as a private business with a few extra hoops they have to jump through to satisfy NZX/ASX listing rules.

I say again, If you invest in NZO you have to be comfortable with all of the above. And don’t be shocked if the SP does not move much even when there is positive news. The lack of liquidity will put most investors off.

[Sideshow Bob]

The quoted value of NZO is of little consequence for them.

What other small investors pay to trade their shares on the open market is irrelevant.

All they will be interested in is how NZOG can be used as a strategic asset to eventually generate a high ROIC for them.

Whether the SP ever reflects full value is not important. What is important is NZO becoming a good earner for them so that they can get hold of the majority of the distributable FCF in the future so that they (OGOG) can use it to make other investments, possibly in other parts of the world.

They will view NZO as a private business with a few extra hoops they have to jump through to satisfy NZX/ASX listing rules.

I say again, If you invest in NZO you have to be comfortable with all of the above. And don’t be shocked if the SP does not move much even when there is positive news. The lack of liquidity will put most investors off.

Bit like MCK - completely different sector, but wealthy majority shareholder that has no interest in the quoted share price, with no chance of any corporate action. The share price is trading well, well below NTA, relatively illiquid - but no way for minorities to realise the full value. Almost a token divvy and no capital returns.

Bit like NZO, almost forgotten about on the NZX.

[JBmurc]

The quoted value of NZO is of little consequence for them.

What other small investors pay to trade their shares on the open market is irrelevant.

All they will be interested in is how NZOG can be used as a strategic asset to eventually generate a high ROIC for them.

Whether the SP ever reflects full value is not important. What is important is NZO becoming a good earner for them so that they can get hold of the majority of the distributable FCF in the future so that they (OGOG) can use it to make other investments, possibly in other parts of the world.

They will view NZO as a private business with a few extra hoops they have to jump through to satisfy NZX/ASX listing rules.

I say again, If you invest in NZO you have to be comfortable with all of the above. And don’t be shocked if the SP does not move much even when there is positive news. The lack of liquidity will put most investors off.

.. but unless OG take full control of NZO they will share this forward FCF distribution with the rest of S/Hs ... and unless they take full control of CUE ...its only a blocking stake to other interests ..

It only makes sense to merge and streamline operations if OG want the most ROI ...

disc -Holding & buying more CUE ..

I could be wrong and OG don't give a rats ass about their 55mill investment and present status continues for years

Meantime ... I'm forward planning to BUY more CUE ...maybe even double my holding to 5mill shares... esp if our Aussie Deeper Gas drills come in>>

[fish]

[QUOTE=mistaTea;950715]Yep, and the SP will never reflect 'intrinsic value' even if they lift earnings, oil and gas prices increase etc because the stock is not liquid. Investors are only prepared to pay fair value (or even a premium) for liquidity. If you bought a meaningful amount of NZO shares you might not be able to sell them in the future for a fair price - or it would take you ages anyway!

Thanks for your input mistatea .
Agree the sp will never reflect the intrinsic value we both know exists .
My view is that there has been a massive increase in the value of this company since you understandably sold out following Ironbark.
there are no more high risk/high risk drills.
Amadeus was bought into at the right time and is a great investment .
Australia has lots of coal seam gas ,pipelines and lpg plants plus favourable politics.
NZo is in a good place now .
Free Cash Flow is much increased.
Natural gas price was 250 12 months ago and today is 609 so I expect fcf flow will more than double this year .
The negatives you point out where present when you may have bought in .
they remain but I feel are mitigated by recent developments.
If ogog want to be able to use the fcf to best help their group then clearly they need to buy out the minority shareholders-this has to be at a fair and reasonable price so the sooner they do this the cheaper it will be.
If they do not takeover then both ogog and minority shareholders will get good dividends .
Hence I will be holding for as long as this takes

[mistaTea]

NZo is in a good place now .
Free Cash Flow is much increased.
Natural gas price was 250 12 months ago and today is 609 so I expect fcf flow will more than double this year .
The negatives you point out where present when you may have bought in .
they remain but I feel are mitigated by recent developments.
If ogog want to be able to use the fcf to best help their group then clearly they need to buy out the minority shareholders-this has to be at a fair and reasonable price so the sooner they do this the cheaper it will be.
If they do not takeover then both ogog and minority shareholders will get good dividends .
Hence I will be holding for as long as this takes

All good points - and if you are happy with how the business is developing, the earnings/FCF profile etc then you can hold your shares feeling very Zen! As the company starts paying dividends you will begin to generate a return and the SP should increase somewhat.

My point was exclusively about observable 'price action' (or lacktherof) despite positive developments. You cannot expect the NZO SP to behave like a normal listed company because of all the reasons I point out.

If you are happy with that (as you are given you are in this for the long term) then fantastic and it may turn out to be a good little earner for you down the line.

If anyone is more concerned with price action then I would say you might want to think long and hard before buying NZO regardless of how good the Balance Sheet might look!

[Joshuatree]

[QUOTE=fish;950993]

Yep, and the SP will never reflect 'intrinsic value' even if they lift earnings, oil and gas prices increase etc because the stock is not liquid. Investors are only prepared to pay fair value (or even a premium) for liquidity. If you bought a meaningful amount of NZO shares you might not be able to sell them in the future for a fair price - or it would take you ages anyway!

Thanks for your input mistatea .
Agree the sp will never reflect the intrinsic value we both know exists .
My view is that there has been a massive increase in the value of this company since you understandably sold out following Ironbark.
there are no more high risk/high risk drills.
Amadeus was bought into at the right time and is a great investment .
Australia has lots of coal seam gas ,pipelines and lpg plants plus favourable politics.
NZo is in a good place now .
Free Cash Flow is much increased.
Natural gas price was 250 12 months ago and today is 609 so I expect fcf flow will more than double this year .
The negatives you point out where present when you may have bought in .
they remain but I feel are mitigated by recent developments.
If ogog want to be able to use the fcf to best help their group then clearly they need to buy out the minority shareholders-this has to be at a fair and reasonable price so the sooner they do this the cheaper it will be.
If they do not takeover then both ogog and minority shareholders will get good dividends .
Hence I will be holding for as long as this takes

Agree ,and if what I believe is happening and what others are not picking up on,oil,gas coal are in long-term deficit and it's going to take a long time(I really hope not but being pragmatic) before green energy displaces them.Im more than happy to park some dough here.It will be a very low risk safe park imo with volatility ahead for global equities,and lucrative I believe as well.DYOR

[Sideshow Bob]

Investor Preso......

2022-03 NZO New Investor presentation v17f (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com)

[Onthemoney]

Investor Preso......

2022-03 NZO New Investor presentation v17f (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com)

There must be one hell of a countdown for this rocket. Or has it failed to launch?

[Waiuta]

I think management have hidden the matches. Graphs tell a good story but I'm convinced this is run for the execs with very little consideration for the rank and file shareholders.

[Beagle]

I think management have hidden the matches. Graphs tell a good story but I'm convinced this is run for the execs with very little consideration for the rank and file shareholders.

That sums up my assessment of the company and to me its seems things never change even when management do and its been that way since I first invested in it 40 years ago. Thankfully I woke up and smelled the coffee a very, very long time ago.