NZ Oil & Gas (NZO)

[notie]

maybe ds should look at getting some more action for nzo rather than bugging the operator (AWE) about taking the rig contractor to court. A disaster of a drilling season for nzog, so all they manage is to sue the rig contractor...great idea.
maybe that is why their share price has dropped 4c today...

[blockhead]

Yer, I was thinking that Notie, what were the damages ???, bit slower than planned, shareholders getting p..p off waiting, but in the end the result was the same, sorry boys, no oil.

From memory they told us at the time of the delay ann there was no added cost to NZO.

Perhaps the contract to drill says a drill will take "x" number of days and the cost is negotiated based on that, if it takes longer, then yes there might be a case for compensation.

If they get a mil or so back I suppose it could pay Directors fees for a year or two and thus justify their pay packets

[Logen Ninefingers]

maybe that is why their share price has dropped 4c today...

....price of oils dropped, globally sharemarkets are tanking, our sharemarkets tanking. More vaild reasons.

[J R Ewing]

....price of oils dropped, globally sharemarkets are tanking, our sharemarkets tanking. More vaild reasons.

That's a relief, I feel much better knowing that there are valid reasons!

[LJB]

If the price of oil drops x% and the NZ$ depreciates the same % against the US$, doesn't that mean nil effect on NZO earnings? If so, aren't selloffs in NZO, like today, illogical? Just thinking aloud so if my logic is wrong comments welcome.

[J R Ewing]

If the price of oil drops x% and the NZ$ depreciates the same % against the US$, doesn't that mean nil effect on NZO earnings? If so, aren't selloffs in NZO, like today, illogical? Just thinking aloud so if my logic is wrong comments welcome.

I think your logic is fine, the sell off is more likely just general market sentiment. But for me, declining oil price is a worrying trend for NZO and it wouldn't necessarily ALWAYS be matched by a lower NZD. Also, I guess the price of oil is going to be less relevant going forward than the local gas price and the coal price - unless we have some drilling success!

[upside_umop]

If the price of oil drops x% and the NZ$ depreciates the same % against the US$, doesn't that mean nil effect on NZO earnings? If so, aren't selloffs in NZO, like today, illogical? Just thinking aloud so if my logic is wrong comments welcome.

The answer is risk. If the global economic back drop is percieved to be more risky, or less than rosey outlook, then the market risk premia will increase. Thus, the present value of cashflow are affected downwards.

[bermuda]

I think your logic is fine, the sell off is more likely just general market sentiment. But for me, declining oil price is a worrying trend for NZO and it wouldn't necessarily ALWAYS be matched by a lower NZD. Also, I guess the price of oil is going to be less relevant going forward than the local gas price and the coal price - unless we have some drilling success!

JR,
The price of oil has been trending upwards since the begining of 2002. Unless there is a major depression ( which could happen...ironically because of the continuing increase in the price of oil ) then I see oil prices continuing to firm. World Oil Production is declining at over 5% per annum.

The price of oil will continue to be very relevant to NZO as despite declining Tui production increasing Kupe condensate reserves are proving to be very valuable. I dont know whether the Kupe Gas prices are linked to the price of oil but I would assume the LPG was.

If only they could get Pike up and running. Things would then really improve.

[J R Ewing]

JR,
The price of oil has been trending upwards since the begining of 2002. Unless there is a major depression ( which could happen...ironically because of the continuing increase in the price of oil ) then I see oil prices continuing to firm. World Oil Production is declining at over 5% per annum.

The price of oil will continue to be very relevant to NZO as despite declining Tui production increasing Kupe condensate reserves are proving to be very valuable. I dont know whether the Kupe Gas prices are linked to the price of oil but I would assume the LPG was.

If only they could get Pike up and running. Things would then really improve.

All true, I'm just feeling a bit peeved cos I might have to sell a few shares to avoid a minor cashflow issue - and I don't approve of the current market price!

[LJB]

Ditto all your last sentence JR.