NZ Oil & Gas (NZO)

[shasta]

With 20/20 hind sight you are possibly right Shasta but they would be stupid to return US funds to NZ at the current levels. Locking in the loss would not be that smart.

But by leaving it there to potentially diminish further, would be worst than speculating!

At least they would get a decent return on the cash in $NZ

But given all that's transpired, they may as well leave it now & hope the FX rate drops in there favour.

As a now ex-shareholder i'm astounded that current shareholders seem either content with or oblivious to this issue?

[Nitaa]

Shasta. You still havent answered my 2 questions. What would you do now with the benefit of hindsight and what would you have done without the benefit of hindsight?

[shasta]

Shasta. You still havent answered my 2 questions. What would you do now with the benefit of hindsight and what would you have done without the benefit of hindsight?

I would have crystalized the gains approx 9 months ago, NZO had far too much cash in $US that they didn't require at the time, which could have been earning a decent interest rate in $NZ.

What would i do now, well i'd start by implementing a risk/cash management strategy so the situation is monitored more closely.

As it sits, i do think the FX rate is likely to drop (in NZO's favour), but by good luck rather than management, they may slowly be able to turn around the losses.

There's two options as i see it:

1. Continue to do nothing & hope FX rate drops

2. Reduce the $US exposure to cover just the necessary "budgeted" costs, by slowly converting small chunks at a time, when the $US drops.

No point converting it all now & taking a hit

I'd be putting the converted funds into $NZ & getting some interest on it, to help offset the past FX losses.

But this is reactive management not proactive, i'd like to see a cash management strategy devised to monitor the FX currency risks.

As for hedging, now might be a good time to take out some forward contracts on the Tapis price (lock it in around at $US80/bbl).

That would provide a floor price & more comfort knowing a falling $US will further benefit NZO, yet still retain exposure to higher oil prices.

Hedging for the Tapis price & FX issues should form part of a risk/cash management strategy, and at least be monitored & reviewed periodically.

To me it's not speculating but just good business sense!

PS, Page 545 my post #8161 - check my post

[friedegg]

i quite liked finding out a guideline as to what they expect from kupe($50-$60m per year,nzd i think?)..
i quite liked that personally tr and ds thought albacore had a better chance than hoki...
funny they reckoned the global crisis was too short and most companies over that period were just trying to offload thier crap assets...
funny the lady who got up and thanked them for her $123 dividend check
they didnt like questions about ppp
and i didnt like the fact probably 85% of the audience were 65years and over,where are the younger generation investors?i am 43 and was probably around the youngest there
i didnt like the sausage rolls or the mince pastries they were dry and cheap ingredients....
id never been to an agm for anything before so was interesting for me...

[Nitaa]

i quite liked finding out a guideline as to what they expect from kupe($50-$60m per year,nzd i think?)..
i quite liked that personally tr and ds thought albacore had a better chance than hoki...
funny they reckoned the global crisis was too short and most companies over that period were just trying to offload thier crap assets...
funny the lady who got up and thanked them for her $123 dividend check
they didnt like questions about ppp
and i didnt like the fact probably 85% of the audience were 65years and over,where are the younger generation investors?i am 43 and was probably around the youngest there
i didnt like the sausage rolls or the mince pastries they were dry and cheap ingredients....
id never been to an agm for anything before so was interesting for me...

Interesting post.

What was their response with regards to PPP?

The issue about NZO shareholders were largely 65 and over is interesting. Since the 87 crash, the index has largely done nothing for 25 odd years. Therefore kiwis leaving soon since that period have very little reason to jump into the sharemarket. Perhaps from their perspective (the under 45's) they will see the local sharemarket as providing very little for high perceived high risk. That could or more to the point will change during the next sharemarket boom whenever that is.

[Nitaa]

Shasta. I checked your post on the page you mentioned. I do have to give you some kudos for forseeing the short term future and you were right at that time. I would like to put up a challenge about forseeing with some accuracy what the currency markets will do. However its bit too much of a hassle and their seem very little interest at the time.

I am willing to pay 100 to 1 odds if anyone could accurately predict what happens to the nzd v usd for each of the next 12 months. To put it simply. at the begining of each month you only have to predict whether the nzd goes up or down against the usd. Take what i just said back as it would be illegal as i am effectively operating like a bookie. My point is, its highly unlikely that anyone would get it right let alone predict where the actual currency will end up rather than just a simple up or down.

How many times you have you heard this year, John Key being one of them that the NZD could fall to 40 US cents. How wrong has he and others been short term. Now just so called experts are tipping the NZD to reach 1 for 1. Go figure. Maybe they will be right but you get my point. However, i wouldnt want these so called clowns playing with my money. Maybe thats what Grogen wanted to do.

Back to your previous post where you say you would take out some forward contracts and lock in Oil at $US80. Lucky nzo didnt take that appraoch when tui was going full tit and oil jumped up to $147. Therefore nzo team are stuffed if they do and stuffed if they dont.

Remember, oil has largely been unchanged and has hovered around the $NZ100 once you take in the currency at the time into consideration.

As i pointed out earlier, this debate could go on for ages and maybe we should revisit this in 6 months time, 12 months time and 2 years time. Working out where the currency and oil prices will be at these 3 intervals will be harder to pick that a broken nose.

[Crypto Crude]

I woke up one day into the World of shares, and as I grew I realised that the likes of this stock were far too easy...
I mean, wow... we all knew it...
at vaious stages, we all held it...
all the wise guys said it...
NZOOD was fun when mackdunk said no...
he was a fanatic no!... but as these wise heads stood by, there was no doubt that we were in good care had we held in wait...
In the end I decided to chase something better...

Seriously mate...on another note,
The more I look at Matariki, the more I like about it...
This is an exploration target we can look highly at, mainly because of the things ive said...
but...

WOW...
...
..
.

there was something worth so much more in other asset classes...
go get this land...
buy some sweet spot I said to me man...
just hold and wait...

DO you think Tui is big?
Did you know Maari is twice the size of Tui...
that is what I said....
Oil $77US... all good...
whats the fuss about? when I look at oil now, and its currently up...
why are all oilers falling?...
its a market thing ,oohhh yeah its back....
hehe...


NZO... sweet dreams Jim, mad like mate who held and never sold and enjoyed a ride that looks set to boost Tui, and all else, Kupe jackpot Bonanza ripper...
Kicking it, gold bug...
later...
why so cheap?
not much longer id say...

.^sc

[Xerof]

Shasta, I'm with you all the way on risk management.....as I was back in March

I said at that time they should bring it on home, and also said for a couple of hundy pa, they could have a Treasurer to manage the cash and risks for them.

40m saving for 200k seems a pretty good deal now........

It is disgraceful that a Company of this size lacks a Treasury division

[manxman]

Beginning to sound a bit like Samuel Taylor Coleridge after a pint or so of laudanum.

Back on Planet Earth the Kan Tan IV is struggling with a stuck casing on Trefoil-2, which means at least a fortnight's delay in the Taranaki program. We'll be lucky to spud this year now.

[shasta]

Shasta, I'm with you all the way on risk management.....as I was back in March

I said at that time they should bring it on home, and also said for a couple of hundy pa, they could have a Treasurer to manage the cash and risks for them.

40m saving for 200k seems a pretty good deal now........

It is disgraceful that a Company of this size lacks a Treasury division

My post on page 545 shows NZO had $US90m at the time!!!!!

They have never needed that much, & how much interest would NZO have made from those funds (when interest rates were much higher) on around $NZ140m, @ say 5% there's $7m before tax for doing nothing!