NZ Oil & Gas (NZO)

[macduffy]

Options, of course, have a cost.
Does anyone know how they are priced and what the cost of say, an option to sell at USD95 in 3 or 6 months would be?

[Anubis]

AWE have just posted their quarterly report on ASX. Here are their forward-looking comments on Tui:

The Tui Area Oil Project started production on
July 30, 2007. This was a major milestone for
AWE and the Tui joint venture with production
commencing only 19 months after the investment
decision. The project delivery represented only
a minor delay on the schedule defined at the
timing of the Final Investment Decision. Final
capital expenditure on the project is estimated
at US$269 million.

The offi cial opening of the Tui Area Oil Project was
celebrated on August 16, 2007. The Prime Minister
of New Zealand, the Right Honourable Helen
Clark, was present for the opening ceremony in
New Plymouth, which was coincidental with the
first oil lifting from the project.

The final development well in the project was
completed at the start of the quarter. The Pateke-
3H ST1 well was completed as a producer with
an 819 metre horizontal section drilled in the
Kapuni oil reservoir, as planned. Pateke-3H
was successfully brought into production in early
August.

Oil production for the quarter was approximately
2.4 million barrels (AWE share approximately
1.0 million barrels) or an approximate average
rate of 38,500 bopd for the 62 days since the
commissioning phase began. To the end of
October, the project has produced approximately
3.5 million barrels of oil, and based on this strong
performance, AWE confi rms its production target
to produce 10 million barrels for the project in the
fi nancial year ended June 30, 2008.

The four producing wells currently have substantial
surplus deliverability in excess of the processing
capacity of the Umuroa. The vessel has a
current oil processing capacity of approximately
48,000 bopd, which is slightly below the nominal
nameplate capacity of the vessel. Further
commissioning of the production system is
ongoing.

AWE’s net oil sales for the quarter was
approximately 0.5 million barrels. The difference
between production and sales was due to the
initial build-up of oil inventory, which is not
recognised as revenue until title and risk pass to
the buyer. This is a common situation with new
offshore projects. Accordingly, this production will
be recognised as revenue in the next quarter.
In August 2007, AWE announced the preliminary
review of the proved and probable oil reserves,
which increased from 27.9 million barrels to 32
million barrels. The 15% increase in the 2P
reserves is based on the preliminary post-drill
mapping of the Tui, Amokura and Pateke oil
fields. A more comprehensive reserve study
incorporating production trends from the wells
and the re-processed 3D seismic data has also
commenced and is expected to be completed by
the end of December, 2007.

AWE and Shell Todd Oil Services recently
executed a second “shared services agreement”
involving the use of helicopters by both operators
in the offshore Taranaki Basin. Following the
success of the agreement on offshore support
vessels, the new helicopter agreement is
expected to offer additional cost savings to both
joint ventures.

During the quarter, the Taranui-1 exploration well
was drilled to a total measured depth of 3,915
metres. Taranui-1 was located approximately 15
kilometres north east of the Tui Area Oil Project.
The well intersected oil shows in both the Kapuni
D and F sand sections, with an oil sample being
recovered from the D Sand. Initial interpretation
of these zones indicates that the oil zones are not
commercially significant. The well was plugged
and abandoned.

Subsequent to the end of the quarter, AWE, as
operator of the Tui Area Oil Project, was informed
by New Zealand authorities that degraded oil, in
the form of tar balls, has washed up on a stretch
of beach on the country’s Taranaki coast. AWE
has also identified an incident that occurred on
the Floating Production Storage and Offloading
vessel Umuroa on October 21, 2007, which
could be related to the oil which has been found
on the Taranaki coast. AWE is working closely
with New Zealand authorities, including Maritime
New Zealand and the Taranaki Regional Council,
to identify the nature and source of the oil and
continues to work closely with the authorities
to assist in the clean-up process. AWE is also
undertaking its own investigations, which are
continuing.

[Nitaa]

This post may have answered a previous poster on NZO's expected revenue from Tui. At current rate of about 37k bopd and an expected 10m barrels for the year then NZO's share is 1.2m. Based on $US63 for the price of oil (currently about $US90) NZO will easily reach their $NZ100m revenue for 12 months

[sideline]

Options, of course, have a cost.
Does anyone know how they are priced and what the cost of say, an option to sell at USD95 in 3 or 6 months would be?

Sorry, US$95 wasn't traded but some put options for Feb 08 that did trade on the NYMEX were:
92$ cost 6.52/barrel
100$ cost 12.67/barrel

Don't know whether you can click on this without 'agreeing' to all sorts of disclaimers
http://www.nymex.com/lsco_opt_csputs...=8&prefix=lsco
otherwise go to www.nymex.com the symbol for crude is CL and check american style options.

[the machine]

awe have also booked a rig for next round of drilling in nz

M

[Bixbite]

Vince (Admin),

How can I delete this post?

Cheers,
Bixbite

[Dr_Who]

Holy Shiat! Oil hit over $94! Looks like going to $100 soon!!!!

I am of to get myself a scooter ..LOL

[duncan macgregor]

Holy Shiat! Oil hit over $94! Looks like going to $100 soon!!!!

I am of to get myself a scooter ..LOL

HEY DOC, That has nothing to do with anything. Its not how much you earn, or likely to earn, its what you do with it once you have got it. Some people end up with nothing on high salaries, others end up with a fortune starting on low wages, its what you do with it that counts. NZO have a great record of not telling you what they intend doing with it so dont get to excited, it might only be more perks for the boys. Macdunk

[sideline]

Holy Shiat! Oil hit over $94! Looks like going to $100 soon!!!!

I am of to get myself a scooter ..LOL

Yeah, $100 could be there by Friday US time?

[boysy]

well from ppp quaterly released yesterday aparently some 3.5 mmbo have been recovered from TUI so far up to end of october so NZO share of that is about 435,000 bo so far not bad