Meanwhile in Tunisia, we have bigger fish to fry in warmer surroundings, oh for being on a Mediterranean Beach right now.
Let these silly ignorant foreigners spend money on dry holes here.
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Meanwhile in Tunisia, we have bigger fish to fry in warmer surroundings, oh for being on a Mediterranean Beach right now.
Let these silly ignorant foreigners spend money on dry holes here.
OILER
sorry if you got that the wrong way round.
Either way only the future will tell of course who got it right.
Not sure if it will be NZO which if i understand took over in Tunisia OMVs share of the permit and according to CH/R above, relinquished the permit here and now it has been taken on by OMV
I stand to be corrected.
I hope you are standing Franz. Here come your corrections:
The permits now being surveyed by Octanex/OMV includes areas relinquished by the AWE-operated Tui joint venture in 2006 after the discovery of the Tui, Amokura and Pateke fields in 2003/4; and relinquished by the AWE-operated Hector joint venture in 2009 after drilling a dry hole at Hector in 2007. The areas have been available to new permit applications since 2006 and 2009 respectively.
NZOG's permit in Tunisia was acquired from the Government, not from OMV.
Fair enough and thanks for that Chris, that assessment was a off the top response to an earlier posting namely.
[ Meanwhile in Tunisia, we have bigger fish to fry in warmer surroundings, oh for being on a Mediterranean Beach right now.
Let these silly ignorant foreigners spend money on dry holes here. ]
.
While we are roaming far, the big players seem to have confidence spending money here on our doorsteps.
Dates of AGM announced.
Why don't they skip it and put the money saved towards a pay-rise for those hard working Darlings in Management .
Not sure why they shifted back to Wellington. There was a good turnout in Auckland last year and the food was good. Maybe too many shareholders live in Auckland? Hope they are not trying to do what GPG did for years having their AGM's in London to avoid tricky questions from the floor.
This probably explains why David Salisbury resigned from NZOG.
Most profound revelation yet - CEO of NZOG lost confidence in Peter Whittal several months before month's explosion and before Peter took over as CEO of PRC:
http://www.nzherald.co.nz/nz/news/ar...ectid=10739851
Looks like the board of NZOG should have listened to David Salisbury?
What a bunch of incompetent nincompoops the Board of NZOG are coming across as.
Maybe the NZOG board did listen to Salisbury but did not agree with him. It would be interesting to hear from Bermuda. I remember he commented once on ST that after meeting Peter Whittall he was impressed with his competence as mine manager. I'm keeping an open mind on this, because I think there may be some parties happy to make PW the scapegoat.
WHAT IS GOING ON HERE ALL DAY , SOMEBODY PLAYING SILLY BUGGERS?
84
21 Jul @ 2:47pm
Recent Trades
Time Price Volume
2:47pm 83 26
2:46pm 84 500
2:32pm 83 27
2:31pm 84 500
2:16pm 83 26
2:15pm 84 500
2:02pm 83 26
2:00pm 84 500
1:48pm 83 27
1:47pm 84 500
1:32pm 83 26
I was always impressed with Whittall. He paid a lot of attention to safety issues when I visited the mine with him. I was surprised that David Salisbury made these comments particularly as I thought he would have been part of the team that appointed Whittall as CEO of Pike.
Still, I have not really been up with the play on Pike and NZO matters over the last few months. Nevertheless this was disappointing news.
Not disappointing - extremely disturbing and damning of how NZOG and PRC have been managing the mine and company.
Peter Whittall stated he had not been provided with a Report which highlighted concerns about gas management at the mine. He cannot be expected to manage without being aware of the Report unless he was instructed to fix the issues arising from the Report - that seems to be the case here. Let's see what else transpires at the inquiry.
Meanwhile, this is rather damning :
"Simon Mount, counsel assisting the commission, said underground mining regulations required mines to have a secondary exit for an emergency, which Whittall accepted. The fresh air base was not linked to the surface, so was not an exit. Whittall said the shaft had ladders and safety harnesses for workers to use to escape but he was unaware if a trial evacuation had ever been done.
However, Mount said a Pike River emergency equipment and self-escape audit, done in August 2009 by Mines Rescue Service, highlighted serious concerns about using the ventilation shaft as an escape route.
A second exit had been planned for the mine since 2005 but had never been built."
No trial evacuation? Says it all about attention to safety.
Questing after a scapegoat is irrelevant to valuation. Does anyone know what's happening with the sale process?
Solid Energy not in the running to purchase.
While some of the blame of the PRC mess is being laid with Peter Whittal, the real culprits in this, Gordon Ward and Tony Radford seem to have escaped any blame. Radford is the ultimate person in charge of this mess as he was the one pushing hard to pike to be developed then when things started going wrong he got NZOG to bail them out.
Gordon Ward was forced to resign and Peter Whittal took over. It seems to me that the mine with its attendant problems was set up under Gordon Ward's leadership. Why was he not fronting at this enquiry? Radford is equally to blame for pulling the strings being the scenes.
Real reason David Salisbury is leaving nzog is he is probably sick of Radford's meddling.
What happened at prc is symptomatic of what is also wrong with nzog.
It may very well be that T/R is running the show, but it is D/S that suppose to be in charge.
Is he quite happy to be a YES man, collecting 10 Grand a week feet in trough as long as possible.
If that where true, that as a S/H would be far more insulting and disturbing.
The Tragedy at Pike aside, what has D/S contributed to NZOG compered to T/R?
One can of course always argue things could be or could have been done better,by x persons.
Trading halt for NZO and PPP - what's up?
NZO eat PPP?
i'd say it will be more of a friendly merger to gain synergies.
Snrs.
Maybe Vietnam good
Kent, when you consider that Tom Prudence pulled in $1m last year and they both take part in Tui, I'm sure there are synergies.
As Bermuda has said before, it just makes sense.
Would be suspecting the same umop, (un) balanced would always see a disaster or a conspiracy theory
Reduction in Tui...
http://www.asx.com.au/asxpdf/2011072...2z22ddw3d8.pdf
Well PPP's announcement is now out on the ASX. Nothing on the NZX yet though.
Hmm, well at this rate, they'll still be stuck in halt on the NZX when trading opens on the ASX...
so ppp saying 10-15% reduction in tui, pending no more drilling.
for nzo that equates to approx 3-5% reduction of reserves.
both companies [and AWE] will probably take a hit today
M
sh..tt can't take a trick at all these days, lme was a fizzer last week and now a downgrade here, oil and coal are not going to see me into that Porsche I had in mind after all !
Someone has been targetting NZOG shareholders with less than 2000 shares, offering 73c cash for them with no brokerage. My kids got the letter on the weekend. Wonder if they should take it now - I bet he has pulled the offer though.
NZOG Management may did know, or
had an inkling quite some time ago, when it stopped underpinning S/P with on-market buy back
Does that mean, them having not resumed now at these price levels, that there is more negative info. in the pipe line?
The co. is not that far away from being cheap.
Take-over at 30-40 cents anyone?
Gross income from tui field will reduce 33usc per share (1.3*100/393), am I correct?
I always thought the reserves were proven reserves, based on conservative figures?
Maybe it leaked away somewhere........
Would you swap a cash payment in the next few months of 31c per share and a capital return of 20c a year for two years followed by 15c for the next 8 or more years? at least Does anyone else think that this company should no longer managed at all? I believe the best option is for a proposal be put to the AGM that all exploration activities be stopped as the management are useless and the CEO doesn't even want to remain. The company should change structure and become an income paying trust IMO. The revenue from TUI & Kupe could be distributed quartery as distributions. NZO has no management input since they are not the operator. Really all they need is an accountant and a trustee. All the management & staff should be made redundant. This would immediately create value for all shareholders as the cash drain would stop. Net cash should be immediately returned to shareholders. The buyback stopped. PPP investment sold & cash returned. I am not that keen on a departing CEO pocketing an extra 250K either. When PRC is sold the cash should be returned. The table below shows what the cashreturn would be and allows no upside for PRC sale.
Cash equivalents $mill c per share
net cash 31 Dec 49.8
PPP 87.5million shares @ 12c NZ 10.5
immediate payment 60.3 15.38
PRC sale
PRC US 28mill convertible bond @ FX US/NZ .85 33.52
PRC secured funding advanced 12
PRCun- secured funding advanced 13 14.93
Quarterly Cashflow
Net operating Cashflow for Quarter to March 31 17.6
Add back exploration & evaluation expense 1.3
Add back administration of 2mill from 2.2 total 2
Add back net interest paid 0 .5
21.4 5.46
dsurf Hi,
I am still in a state of shock about this large down grade and really have not yet taken it all in.Probably do not want to.I to thought reserves were to us proven and not what it turns out to be expensive guess work,to be changed at a later date.Under such a state i see little point in the models existing or the staff that make them.
Yes dsurf your idea is worth looking into as i see now that far too many of these high income earners on staff really just to not know clearly what they are doing.Little point in just carrying on drilling dry holes and setting up branch offices overseas to eventuall drill someone elses well.
Have to go now as am going out. Cheers and do not disappear with this idea.
Balance you on sharetrader are coming to be the most correct in your vision and mine certainly needs upgrading.
HARD TO BELIEVE, SOME DYED IN THE WOOL DIE HARD,s WAKING UP.
This Mob will shaft the S/Hs long before doing something honorable, this is all about money remember, cynical yes but sadly true.
There may of course be a completely different agenda.
Time will tell.
Fellas, I agree this isn't great news - but not all together a surprise. I say this because 2P stands for proven and probable reserves and can also be refer to as P50.
P50 means the company is more than 50% confident that the volumes specified can be recovered. In this case they were wrong. Had this been a reduction in P90 reserves (90% confidence level), I'd be shocked.
with this news of a downgrade, you can kiss next years divi away as well.
the only bad thing about you idea dsurf........ and i like it a lot..... is that TR and the boys have access to millions of part paid shares. and with this news they will downgrade the strike price yet again (from a dollar or so now) to 60 / 70 cents which make them the winners no matter what the shareholders vote for.
there must only be a small handful of shareholders outside of the boardroom that is still in the black on their investment in NZO. i started buying at 57cent and kept buying up to $1.27...... what with the few divis i have broken even on cash value only over the last 6 or 7 years, therefore im behind bank rates.
and im one of the lucky one......... how many need $1.50 or more?
this has turned out to be a bad investment........ but thats the game in the oil industry.
now its time for the boardroom to feel some pain or cutbacks....... or close up shop.
and the thing that sluzzes me the most is the millions spent on share buybacks.
I suppose one aspect is that NZO aren't operators of the well, just part-owners. If we were kind we could say it was more 'bad luck'. But I think the kindness has run out......
Although I don't necessarily disagree with DSurf's idea.
Fabs I met nzo management last november and am convinced they are all well -intentioned people but hindsight has proved bad decisions were made . Digger and myself felt nzo could be better managed . Unfortunately nzo investors didnt give digger the support he needed to become a director.
DS assured me that pw was driving prc to meet revised targets .I invested heavily in prc on the day of the explosion -i had put in a low bid which was taken up at the close of trading .If any investor should feel bitter it should be me -but I didnt lose a son in the explosion so can only feel sorrow for those that did .
Digger and myself felt NZO needed a director with real life experience and aptitude and so I supported diggers attemt to get on the board-sadly not supported by shareholders and some person I think with legal expertise was nominated and elected by the board .
It is telling that when I spoke to digger after the explosion he asked who lit a match ? PRC looks as if it was an explosion waiting to be ignited . DS did tell me he had no coal expertise and nzo wanted to sell when they had a better offer-they had received offers deemed not good enough
I'm with DSurf also. This year's AGM should be interesting in that, while management don't appear to have done much over the last year, the shareprice has gone down a third from a string of bad luck. The proudly touted 'Three Columns' underpinning the company now form th elegs of a distinctly wobbly stool, with Pike having fallen off and a big bite taken out of Tui by a Downgrading Beaver. My guess is that given the success of NZO's expensive modelling experts over the last 7 years, the next time they chuck a drill bit into Taranaki waters they will have just as much chance of striking oil in a passing whale than they will of finding anything under the seabed.
Snrs.
As always is said - two many as you say - the fat cats. When you do little , example why have a PR man - PR for what - to me it seems information is scarcer than oil.
Lets take the bottom estimate 1.1mil. Barrels left to NZO.
At 120 us $ converted to nz at 0.865$= $152mi. instead of nz $190 mi. a downgrade of nz $ 38mi.
Say over 9 years a loss of GROSS revenue of 4.2 mil.per annual.
Question: is downgrading of at one point 18% and end of day trading yesterday of 13% realistic ,what is going on here?
Interesting - here are the previous reserves upgrade announcements. So now we are back to 41m, takes us back to the first review on Nov 2007, which was 50% above initial estimates on which the project went ahead. So look on the bright side, Tui has still been a great success, and its still pumping away and all paid off.
22/11/2007
Oil Reserves for the Tui Area Oil Project have been increased to 41.7 million
barrels, 30% above the previous estimate and nearly 50% above pre-development
predictions.
The new figure for proved and probable (2P) reserves compares with estimated
reserves of 27.9 million barrels on which the Tui Area Oil Project in
off-shore Taranaki was first sanctioned, and an interim re-estimate of 32
million barrels following completion of the development drilling campaign.
21/05/2008
The operator of the Tui oil project, AWE Ltd, has assessed that this
extension is expected to allow at least five million barrels of additional
oil to be recovered from the known Tui field reservoirs, bringing the current
proven and probable (2P) reserve to at least 47 million barrels.
20/06/2008
The initial proved and probable (2P) reserves for the Tui Area Oil Fields
have been further increased from 47 million to 50.1 million barrels,
following a detailed field reassessment by the Operator.
What great success? What did shareholders in NZOG got out of all that lovely money from Tui?
Pity all that money from Tui has been pixxed down the black holes of PRC and PPP, and of course huge salaries and benefits for NZOG directors/executives.
Meanwhile, remember shareholders had the privilege of pumping in extra money at $1.50 per share?
In July 2008, NZOG took in $193.7m from shareholders via the exercise of options at $1.50 per share. Rather 'lucky' to have the 'triple' oil reserves upgrades prior to that?
$55m was raised in 2005 via options and placements.
So a total of $249m has been raised from shareholders and what is the market cap today?
$286m!
Mushrooms, anyone?
Can anyone quantify if s/h have any chance whatsoever to take on the Directors at the AGM especially as it is in Wellington??????
if this bloomberg article eventuates into reality, then it would be a nice xmas present for producers - tapis of course a premium to wti
http://www.bloomberg.com/news/2011-0...rs-behind.html
M
Fabs you could have also said that when the oil reserve expected fron KUPE was upgraded by a some slightly greater amount than the now TUI downgrade,that the SP from the KUPE upgrade did not move the SP one cent north.So what is going on. To answer my own question i would say a slow but deeply developed lack of confidence in the board.
DS desire to overseas empire build even when the base at home is erodding away leaves the average shareholder asking what is the point in holding this share .The board is oversupplied with academic wisdom and show a continual lack of practical knowledge.This board of accountants,geoligists and laywers needs a drastic downsizing just as the Dairy board had to do 10 years ago. Under DS leadership in these last three years the company market value is approaching one third it size and getting weaker each day.
Gross income is projected to be 100 million but with overseas dreams and a overladen non preforming management structure none of that money is expected to be available to shareholders. But no doubt though plenty available for the departing CEO.
Just my curiosity: where you get $190mi from?
Per my understanding, NZO shared Tui reserve is 2.6m barrels at 31/12/10. Now this number come down by almost half, So if it has only 1.3m barrels left. Assume oil price at USD 100 pb, ex rate at 0.80, which NZD is 125 pb. This will represent nearly $163 mi revenue loss for next 9 years, or $18mi revenue loss p.a.
well the way some of the big boys are bailing out this stock isn't a great endorsement on where they see nzog going long term, or in the short term for that matter. Over 5 million shares sold today, well up on the 300K normally traded.
terminal spiral looks to have started
As per 25/7/11 = 1.1--1.3 NZO share.
I took 1.1 in sample
downgraded from 50.5 to 40-42 mil by 16 - 20%
Prior to downgrade NZO share =1.375 less 20% now 1.1 as above. loss of 275000 barrels.
I.I MIL. BARRELS OF TAPIS OIL 25/7/11 us $120 @ ex.rate 25.7.11 of 0.865 c US = NZ $152
Loss of 275000 barrel calculated by same formula as above = 38 mil NZ $ over 9 years 4.2 mil NZ$ per year.
SO TOTAL BEFORE DOWNGRADE OVER NEXT 9-10 YEARS OF NZ$ 190MIL.NZ$
NOW REDUCED TO NZ$152
There are some big buyers - always amuses me when a stock goes South that for every seller (pessimest in this case) there is buyer who sees a good deal - which it is time will tell I guess.
So are they taking the bath?
I've been out and on the sidelines since the mid $1.60's with this one but am starting to get interested again
I'd like to see a changing of the guard first then I'd probably see it as a value trade again
Stale money getting out is usually a good sign of a capitulation event
Yes Fabs, seems totally overdone to me.
What seems to be missed in the picture is that this is only gross revenue - there are costs
associated with generating this revenue and that cost (per barrel of produced oil) was always
expected to increase proportionally as the production rate of Tui was projected to decline.
The Umuroa has basically a fixed cost per month to lease, staff and run and as production
of barrels per month declines it becomes eventually uneconomical to carry on, despite the fact that
more oil is there and could be produced if cost didn't matter.
The impact on NET PROFIT is therefore a lot less than above figures since the reduction of production
happens at the far less profitable tail end of the extraction. Then halve that impact again for NPAT
because approximately 50% would have disappeared in taxes anyway.
I say you'd have to have some balls to buy some NZO right now....falling knife! NZO's EV is approximately $205m....does Kupe and Tui justify it?
What return can share holders expect, and what serious opportunities do NZO have to build production?
Thanks Fabs, but I still can't agree with you. Following is my calculation.
Initial Tui Reserve 50.5m, productions: 2008: 14.23m, 2009: 9.12m, 2010: 4.83m, 2011: 2.8m, total production to date: 14.23+9.12+4.83+2.8=30.98m, remaining reserve: 50.5-30.98=19.52m, NZO share: 19.52 x 12.5%=2.44m.
Revised Tui Reserve, say: 40m, production to date: 30.98m, remaining reserve:40-30.98=9.02, NZO share: 9.02 x 12.5%=1.13m
Therefore NZO share is down from 2.44m barrels to 1.13m barrels. Take your tapis oil US120@ex rate 0.865, gross revenue will be down by $182m( (2.44-1.13)m x120/0.865) over next 9-10 years, or approx $18m revenue loss p.a.
I agree with you jwang, same as my calculation.
revenue is down for last 3-5 years - not until after 2014/2015.
also any early ceasing of production by 3-5 years is also less tax, royalties and production costs, so net reduction to nzo is a lot less than nz$182m.
by having the independant review of awe calculations draws a line in the sand, thus if any partners do not want to participate in next round of development/erxploration, then they can opt out, leaving remaining participants with higher share for any increased production - heck of a calculation to make determining who gets what, but doable.
M
time to take on some losses and move on for me..
Yes JWANG You are correct,
tackled this from the wrong end.
My main point was however the overreaction of the market, figures as pointed out since too
by other members above, where gross figures-- more like nett. profit of 6 -7mil p.a.
Unless the predicted and estimated flow rates are still within range, not much will change in the next couple of years.
Yes it could mean of course a shorter life for the well.
It is indeed a funny market, when good news like D/S departing is greeted with a downgrading.
Wonder how much as ORIGIN, AWE & OTHERS are among the circling Vultures
Could be more downside yet as final reserve number to be determined in August.
Downgrades are slippery things and it is hard to understand how Tui can go from upgrades (3 in a row) to one single big downgrade - indicative of amateurs at work?
I have checked your cals and i agree with them.Also cost stay the same so not too good
The big one though is what were the company going to do with the money.My point is if you were just going to throw it at brance offices to ego build while the home front collapses then the loss of income is no real loss. It is a bit like a smoker facing an income decrease when even if he got the origional sum was just going to burn it up anyways .
That two i agree with and have already made that point. Again what is the point of these models when they can easily be this far out.What is the point of expensive modelers that make reports this far out? All around i see a big need for corporate down sizing.Too many snouts at the trough just not earning anything like there keep.Again the Dairy company several times downsized and have over time rises to be NZ biggest income earner.
It is well past time for the board to look at itself and ask where it is going.
[QUOTE=Corporate;352353]I say you'd have to have some balls to buy some NZO right now....falling knife! NZO's EV is approximately $205m....does Kupe and Tui justify it?
Kupe does by itself for a normal company where the shareholders get a share of the returns. I feel that NZO made a big mistake by cancelling the ANNUAL dividend 6 months before the years result was known. The truth is that the NPAT loss is an accounting loss so why focus on it 6 months before it was necessary. during the year 80mill? cash has been generated. Yes 50% wasted but that would still have left $40m to cover a dividend. Instead they signalled to the market that management were panicking and this has trashed the shareprice by focusing attention on PRC's failure.
But back to the original question of does Kupe & Tui justify it. What about the net cash? What about the return of money leant to PRC. Thesae are worth 30c a share. What about upside from PRC sale. What about PPP. etc my point is that I think capitulation is here. That does not mean the shareprice will go up however as the CEO has decided to hang around for another six months so that another 20 tio 30% of value can be wiped off. Most likely he will then succeed in getting the company taken over and then the complete demise of this company will be realised from the perspective of current shareholders. I want him to leave immediately and give this company a chance to regain a smidgeon of market credibilty and perhaps a chance not to be taken over with the inevitable transfer of wealth overseas.
Near the end of say 8-10 they upgrade, like with Maui 2011 is long forgotten then.
Like you say BALANCE up and down grading is a slippery thing.
Lets ponder and focus on who my gain in the long run, including the present weekly beneficiary's on the trough.
A few days ago i suggested a S/P OF 30 -40cents will definitely bring this to a head, unless we all underestimate this management.
I agree that the corporate overhead in Wellington needs some serious downsizing.
However, I find it easy to understand how the 'models can be this far out': in the case of Tui the
'economic cut off point' and hence the 'P2 reserves that can be ECONOMICALLY produced' are
dependent on the the price of oil!!!!! As the price of oil went up in 2008 so did the P2 reserves,
because at the higher oil price you can keep going longer profitably while paying for the fixed
monthly costs of the Umuroa. Notice that both the POO and the P2 estimates peaked at the same
time. My guess is that little of the upgrades at the time had much to do with the reservoir
being found to contain more oil than originally thought and most was based on the changing
economics of production because of the changing POO.
Similarly I guess that the current downgrade of P2 reserves has quite a lot to do with a less
optimistic estimate of what the POO will be through to 2019/20. We all know that there are
wildly diverging views on this.
Since the P2 highly depends on the POO I would like to know what estimates were used and
would also like the company to comment on the validity of my guesses.
I think that Diggers' point is that NZO spends a lot of money on salaries and directors fees and it is hard to see what value is being added as a result. We could trim a lot of expenditure without necessarily reducing any revenue, after all AWE operates Tui, Origin operates Kupe and there seems to be very little happening on the prospecting side.
Successful people and companies all have in common that they look at their situation and try as much as possible to change whatever needs to be changed as circumstances require.Just as the dairy industry have made succesful changes now NZO needs to lookat itself,so in theses circumstances the two totally different companies are comparable.
Is there more negative news to come?
One finds it hard to believe that a management team consisting of 22 highly touted members can in this day and age be so incompetent to take a Co. that had so much going for it 3-4 years ago to this.
BTW: How much or little are those US-$ worth they are still hording , hope they have not added more since they have been such a bargain lately and dare i say may soon even be worthless.
Exactaly and further more even the thought of setting up overseas posts to further the errosion of cash with more salaries fees and prime overseas travel, lodgings is my main point of why the SP is in freefall. The sooner DS leaves the better.That is all part of the price of being a CEO. The buck stops there.Just like a political leader--lose too often your out .
I would put the next CEO on a SP preformance income. In fact why not all the directors on a SP preformance basis. Afterall that would then put them exactally where the shareholders are.We win together or lose together.
Market has overshot this one big time. Cheap takeover target now .
you don't think after taking cash and ppp shareholding out:
MC 260 @ 67c
-65m cash
- 15m PPP holding
180m for KUPE and TUI producing 100mil a year reveune
Plus the permits
Just need to take the snouts out the trough ;)
bung5, you have made good excuses to let you have a good sleep, but for a downtrend stock like NZO all these excuses are mean nothing, NZO has done very bad investment both in PRC and PPP, those cash reserve will not take long to burn out. I already clean out all my holding at 73c( at loss ), maybe come back at some stage, keeping close look.