NZ Oil & Gas (NZO)

[upside_umop]

Around $140m wiped off NZO. Goes to show that the equity stake and debt was already discounted in NZO like most equity stakes have of publicly traded companies are.

I don't think the govt will step in. PRC probably won't be up and running for quite a while yet. The best thing would be to bring it down to a small team to work on design implementations so the risk of something like this never happens again. However, I see it as quite unlikey for PRC to stand on its own again. NZOG is their largest creditor and will no doubt get the asset and from there take it on again. There is what $300m of infrastructure at PRC now?

The greenies will probably come out and say this is why we shouldn't be mining coal etc but has anybody thought that this shows what lengths people/cpmpanies have to go to make investment in this country? This would never have happened if this was a simple open cast mine. Furthermore, the economic benefit would be greater from the full recovery of the coal and at a much more timely rate (the recovery rate would have been closer to the 58mt than the current 18mt). There would be visual impact in the short term, but how many people from here can honestly say they have looked at the paparoa ranges other than in PRC reports?

Lets just hope we get some good news out of that mine over the next few days with the miners first.

[geezy]

in the ealrier statement nzo values its total PRC investment as only 16 cents / nzo share, oversold?

[Beagle]

The Govt could buy PRC & run it in a similar vein to the Stockton mine run by Solid Energy? (providing NZO an exit strategy?)

The hard coking coal is still of value, especially to the Japanese steelmakers, again NZO can extract some value on-selling the coal production rights?

Wonder what the Indian shareholders want to do, & whether there focus is short or longer term? (Where does that leave NZO?)

Assuming, the "rescue" is now just a body recovery, the sentiment in the affected surrounding areas may prompt the Govt to act

I still see room for NZO to extract some value out of this situation, & would be interested in NZO is oversold

Disc: Nil held in NZO & PRC

The market pricing of NZO is clearly indicating based on a weighted average of people's opinion, that PRC has no residual value, and I agree.

It will be politically unacceptable for the Govt to take over the mine.

I am slightly disappointed that NZO are so freely continuing to fund PRC to the tune of the rest of the draw-down facility, approx a further $12m when there would appear to be very little hope of repayment. Perhaps from a legal / moral point of view, they had no choice but I believe the market by pricing NZO at 85 cents is saying from a commercial viewpoint, we're not impressed.

With heaps of negative sentiment still to be vented in the market against PRC its hard to see NZO's share price moving north from here for quite some time or at least until the dust settles, which could be many months away ?

What to do, buy, sell or hold....me thinks the latter, that way no one can say big Rodge profited from other people's misery.

[fabs]

FISH
Your heart is in the right place mate.
Makes you wonder what contingency system PRC has in place for just such as redundancy, injury, sickness and death at work insurance and compensation payments. Should not come out of borrowed funds. So NZO is in there as a secure creditor for another 12mil. how secure that is remains to be seen.
As to buy back, will never be cheaper than now.

[Beagle]

FISH
So NZO is in there as a secure creditor for another 12mil. how secure that is remains to be seen.
As to buy back, will never be cheaper than now.

I think the $12m extra funding amounts to a "gift" that NZO had little option but to do. They're were comprehensivly snookered. Cold logic suggests you are right about the price, but there's so much negative sentiment.....

[Rabbi]

So far the volume of shares traded has been relatively modest.

You can forget about what the valuation is, market sentiment alone is dictating the SP .

I wonder what the institutions will do?

[Traderx]

I wonder if the margin calls on NZO have begun. Could be some forced selling.

Sad situation all round.

[shasta]

So far the volume of shares traded has been relatively modest.

You can forget about what the valuation is, market sentiment alone is dictating the SP .

I wonder what the institutions will do?

You would have to assume the institutions will be in it for the long haul, as they would have wanted dividends from PRC when in steady production

But good question, whether institutions would buy/hold or sell if NZO was wanting to exit PRC earlier than anticipated

Otherwise its holding on for Tui & Kupe, with Pike in the background as another project "in development"

[fabs]

Maybe NZO board at the end of there wits, inviting takeover?

[friedegg]

asb have been trying to ring me but ive holed myself in the bedroom and im not comming out