NZ Oil & Gas (NZO)

[digger]

those people who are suggesting forward sales may be interestad to know the futures prices for crude as of today:
dec 07 $88.00
april 08 $84.00
dec 08 $80.00
dec 09 $76.80
dec 10 $76.00

IMO. if any forward sales were to be made they should be very short term - like for the next 6 months at the furtherest out

Probably not worth it at all with the market in backwardation as it is at the moment. Markets are expecting lower oil prices in the future - I doubt whether this will eventuate. More likely to be higher in the future.
.

Thanks Mike100 for setting this out. If you or anyone else can find the forward contracts for two years ago and for last year ,you will see that what you have pointed out for now going forward has always been the case. Why this is so is beyond me. The forward contracts get it wrong with oil about 90% of the time.Nearly always the actual price is greater than what the contracts would have them.This is probably because they are treating it as a commotity instead of a vanishing resource.
I would also like to ask anyone wanting a forward contract to refer to my question of where we would be now if we had taken one out two years ago at 40 dollars. Last year it was 55 dollars. In both case we would have lost a lot of needed money. This has been ignored and posters are still saying well do 50% then. So what is so good about being half wrong.
The forward contracts do not reflect reality and are a good way to lose money.


Nothing would make me exit this company more than finding out that the company were to do some of the future profit give away some of you posters are suggesting.
A big NO to forward contracts. Keep all future profits for the NZO.

[digger]

Oil price can hit $150 before 2010 - Investec
Dominic Lau, Reuters
The price of oil, which hit a new record high above $88 a barrel on Tuesday, can rally further and may reach $150 before 2010, the fund manager for Investec's Global Energy Fund said.

"The reason why it has potential is the underlying supply and demand fundamentals are causing a serious crunch in oil markets," said Tim Guinness, chairman of Guinness Asset Management, who runs the Investec Global Energy Fund.

Guinness, who was chairman of Investec Asset Management for four years before he retired in 2002, said strong demand from developing countries was emulating that of the developed world from 1950 to 1970.
(17 October 2007


Two years ago some wanted to sell our holding for 40 dollars. Now give well at least half away for 90 dollars. In both cases both this forward contracts look foolish given just two years.
I have said my piece on this subject and hope the 40 dollars man from two years ago will step forward to enlighten others on how foolish 90 will look in two years.

[bermuda]

Atta boy Digger! I am right with you on this one.
The sooner the company can pay off the term loans the better.As you know they come with hedging restrictions.

As soon as that's done I would be happy to take a hedge at say $US60 for protection but leave NZO to enjoy market price above that. Could go to $US150-300 if that texan idiot gets his way. He has just about stuffed America. Actually he has.

[sideline]

Thanks Bermuda for getting all those infos to us.

One question which is not answered yet and not covered in the quarterly is the oil hedging,
i.e. the calls capping the oil price. Can somebody at the AGM please ask whether they have
now expired, and if not what their expiry dates are.

[shasta]

Atta boy Digger! I am right with you on this one.
The sooner the company can pay off the term loans the better.As you know they come with hedging restrictions.

As soon as that's done I would be happy to take a hedge at say $US60 for protection but leave NZO to enjoy market price above that. Could go to $US150-300 if that texan idiot gets his way. He has just about stuffed America. Actually he has.

Just remember Uranium went from $US10/lb - $US136/lb & back to $US75lb in a relatively short space of time, & theres a massive shortage of the stuff (unlike Oil where there plenty of it, just whether its economic to extract etc)

Oil prices will rise on the threat of war etc, but in reality could slip back a few dollars (back into the 70's anyway), or could jump to $US100bbl in a heartbeat.

Either or, i'm not too fussed, we face a massive energy crisis in the next few years & NZ will end up paying through the nose for oil & gas, as a result of non existent O&G exploration in NZ waters over the last decade or so.

I want NZO to get the best possible price for its oil, & for as long as it can, & i dont care how they do it...

[neopole]

since my last post there has been some very informative and educational posts, and answers from posters and transcribed replies from management regarding dividends and expendature of revenue and profits. this is a very good thing, but, as an average investor...... like most of the 12000 investors in NZO who want to see a return of their investment capital, its beginning to look like an acountants spider web.
what i mean by this is..... here is a company promising riches though exploration, discovery and production of oil, gas and coal, and..... the company is forefilling that promise, which is what most laymen investors looked for and recieved, but now that the riches are coming in, we are told that the revenue and profits are allocated here and there, and tax right offs etc, which is fair and true, and for those that understand business finance and taxes, fully understandable. but for the layman investor like myself and maybe thousands more, this is something new to think about, as most mums and dads invest in tax paying top 50 companies and recieve a dividend or such.
my investment in this company was based on the premise that this company struck oil, gas and coal several years ago, and was going to develop and share the rewards with its investors........ which is why i invested, now that the wealth is coming in, the non technical investors like me and others are learning about the financial reasons why there is no financial reward for the investor at this stage..... having learnt this i do understand now........ but, this makes me think about the reason why i invested in the first place, maybe many of the 12000 investors also.
which brings me to the simple point.
is this a company for the average investor, or a share only for the speculator or investor who is educated in financial matters and risk/reward.
im sure alot of people 2 years ago who know what they know now about NZO might have different thoughts about investing in a pot of oil...........
which might explain the current share price.
having said all this, i have learnt a great deal about investing in high risk high reward companies........ NZO was high risk 2 years ago(when i started to invest), yet the reward hasnt been worth the risk to date, and a $1.50 option conversion is less than a year away.
i guess the jist of what im trying to say is........ most NZ investors dont have a handle on the oil game in this country, and i suspect alot of NZ investors in NZO have become disallutioned in the promise of oil wealth which relates to the lack of informative information from the CEO.
at this point in time i am struggling to decide what to do with my investment in this company, it seems to me...... that to be an astute investor in NZO you also need to be very aptitude in company finance as well as a risk taker,.
risk taking is easy..... swallow the hype and take your bet, but for this company to go forwards it also has to educate the average investor in the new New Zealand game of public energy investment.
i read this thread avidly, and learn from the many points of views posted here, but the more i learn, the more i realise that the oil game is a game for the big boys, and unfortunately NZO is being ingnored by the big boys and propped up by the un-informed little guy..... and yes i admit im a little guy......... and probably the best thing i have ever learnt.
if a company educates its investors in its core fundamentals up front, then its investors are more likely to make educated decisions about their investment in that company, especially in the new field of public energy exploration, as it stands, most kiwis have an aversion to share investment as it is.
(not that the company hasnt been upfront........ it has..... just not in a way that mums and dads fully understand)

thats my humble opinion of the week.
good fortune to you.
ps...
PPP is doing well.

[Hoop]

Thxs Bermuda
very informative

[bermuda]

Neopole,
The sell off on Wall St could be the start of a major recession in America as forecast by Julian Robertson.Hopefully the emerging Chinese and Indian economies can still maintain a growth in world GDP.

The strong run up in oil prices has been fuelled by geopolitical concerns lately but deep down there are supply demand issues that will continue to surface over the next few years that will underpin the oil price.

NZO have only start started to produce and after their tax credits have been sensibly used I am sure the strong longterm revenues will produce dividends to shareholders.

A little more patience is required but I am confident the Kupe project and further adjacent drilling will lift the company into an even stronger position.The Kupe pipeline has been built to cover 3 times the current forecast output . They wouldnt do that for nothing.

Could be a volatile week next week that's for sure.

[shane_m]

bermuda cheers for asking those q.

[rotweiller]

NEOPOLE - my thoughts exactly and many thanks for your succinct appraisal. I wonder how long I will remain a holder but will certainly keep PPP.
BERMUDA - Again many thanks for asking the questions that needed to be asked and getting the answers. Can you or anyone else surmise when we might get our first dividend.
Cheers