NZ Oil & Gas (NZO)

[friedegg]

yes apart from my cash of around $8000 i get about $4000 in tax credits,this enabled me this year to pay no tax plus tax credits to the value of $2163,and after this years div it will happen all over again

[blockhead]

Yes Blocky likes the tax credits as well, maybe a share buyback is a possibility ??

NZOG spokesman Chris Roberts said the use of capital was "constantly under review and that particular idea (a buyback) is certainly given consideration, but there is nothing we can announce at the moment".

[digger]

I am all for dividends as well to soak up the tax credits and over time keep both the directors honest and bankers happy.The difference here is how much of a dividend.Remember it all started by one poster saying NZO could make a loss and still pay a dividend. That only happens in companies that are careful in good times with there money,so when a leen times comes they can carry on pretty much as usual.My comment about next year with three incomes leaving the div at 5 cents allows us to then find ways to grow the company and build up some fat for the next inevitable hard patch the company will face further down the track.
The dairy industry is a case in point. Years ago incomes were smothed out and over time things worked pretty well. Then a few load mouths started pushing for income to be payed out much in the year earned.The arguement here was that the farmer could smooth out his own income.But as i see it that did not happen.Instead a wild grab for dairy land sent the price of property through the roof and now in the last 18 months values have fallen about 40% in correction. So you see from where i am coming from a steady dividend seems more attractive with the balance of company earnings going into company growth on several fronts.I could ask would it have been better two years ago if nZO had paid out all earnings to say 40 cents,with none now.The answer in hindsight could well have been yes as much of the surplus went into dry wells and into US dollars going backwards.However it is only in hindsight that we know the wells are dry and the exchange rate unfavourable.
So for me it is slow and steady.Lets use the new monies finding out the size of TUI and KUPE near areas,and buying into oil developments. While 5 cents steady will keep me happy i realise others will have different ideas.

[winner69]

Whilst accepting that lots of shareholders hold your view personally I have a very different viewpoint .
Dividends are importantas -
1 Enables tax credits to be used
2 Is money in the hand-to spend or invest and stimulate economies
3 If you rely on selling shares for income you will be shortchanged at times like this -the market does not reflect fair value-I remember you making a very good argument in your TTP submission .
4 Many investors invest for dividends-if you dont the interest
on any loan to buy shares is not tax deductible-I have a large margin loan which is tax deductible as i buy shares for the dividend .

The proof of my belief is that I started buying nzo again this morning -at 119-less 5 cent dividend= net cost 114cents .

It just doesn't seem to make much sense Fish .... you borrow money (and pay interest on it) and give that cash to NZO to find some more oil or something to make you rich .... but also want NZO to give some of that cash back to you by way of a dividend

I don't know that much about NZO but I was rather surprised about how small they really are ... all this hype and revneues less than $100m last year .... must be huge future expectations built into those analyst valuations of $1.75 ... even allowing for the cash sitting on the sidelines gradually being frittered away

All this does seem to support the views of some on this thread that NZO is just something to play around for a selected few

[bung5]

It just doesn't seem to make much sense Fish .... you borrow money (and pay interest on it) and give that cash to NZO to find some more oil or something to make you rich .... but also want NZO to give some of that cash back to you by way of a dividend

I don't know that much about NZO but I was rather surprised about how small they really are ... all this hype and revneues less than $100m last year .... must be huge future expectations built into those analyst valuations of $1.75 ... even allowing for the cash sitting on the sidelines gradually being frittered away

All this does seem to support the views of some on this thread that NZO is just something to play around for a selected few

Valuations make lots of sense. With the 3 main investments they already have two of which will be generating income for the next 20 years. plus the cash to invest in more prospects...
They will probably sell PRC for over 150 million which is already 1/3 of their market cap.

[digger]

Valuations make lots of sense. With the 3 main investments they already have two of which will be generating income for the next 20 years. plus the cash to invest in more prospects...
They will probably sell PRC for over 150 million which is already 1/3 of their market cap.

bung5,that is the worst post i have read in ages. The first sentence is spot on but what is that junk about selling PIKE for 150 million. You clearly mean virtually give it away at that price and lament the fact a few years down the track.Pike once it starts earning will be a good little source of income for decades,so why give it away.The hard yard is virtually finished with the cream about to flow in the next 6 months ,so why sell.Why even think about it???

[Bixbite]

I don't know that much about NZO but I was rather surprised about how small they really are ... all this hype and revneues less than $100m last year ....

Small company, yes it is, a very small company. Eh, is NZO still sitting in the list of NZX 15!!!!????

[bung5]

bung5,that is the worst post i have read in ages. The first sentence is spot on but what is that junk about selling PIKE for 150 million. You clearly mean virtually give it away at that price and lament the fact a few years down the track.Pike once it starts earning will be a good little source of income for decades,so why give it away.The hard yard is virtually finished with the cream about to flow in the next 6 months ,so why sell.Why even think about it???

Digger , sorry I change my mind we won't be selling PIKE then. It's not my idea to sell PRC !!

[LJB]

Small company, yes it is, a very small company. Eh, is NZO still sitting in the list of NZX 15!!!!????

NZX 15 means institutional investment which (correct if I'm wrong) requires income stream from the investment to pay interest/dividends to debenture holders. Institutional buying/holding supports shareprice so logically, dividends are important, even to natural resource exploration companies focussing on growth.

[fish]

Winner
Margin lending at current sp of nzo tel cen and vector means i am making a profit on dividends only . Take vector for example -current dividend and tax credits per share is close to 10%-i pay 6.5 % interest on my margin lending .This interest is tax deductable and as i have substantial professional earnings it reduces my tax .
However most companies will grow in time-I think 3 of the 4 companies above that i am heavily invested in will grow over time . That capital gain will be free and provide me with substantial income to enjoy retirement . When I retire I will also retire all my margin lending debt