Over-promised and under-delivered it would seem? NZO is not a company that I have actively followed prior to mid-2006.
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Unicorn,
Would you apply your last sentence / comment to the two new PRC Board members ?
Have you met John Dow the Independent Chairman of the PRC Board ?
If so what is your opinion of him ?
Did you perhaps attend the AGM at the Mine site and get a feeling for the scale of the operation ?
It is true that the project suffered delays and serious misalignment of the then current cost estimates compared to final cost estimates.
However, do not many major projects suffer such cycles of initial, middle and final costings, particularly over the last several years in which resource projects have all suffered huge escalations of costs of equipment and salaries as everyone wants to jump on the commodity gravy train.
In the mean time much of the Pike project has stayed on or under the final budget ...... except for the tunnel where more difficult underground conditions have been encountered ..... worse than was forcast by the consulting geologists and geotechnical engineers, not a sign of incompetant PRC management, rather that geology is still an interpretive science. Tunnel extra costs are not huge and will be more than balanced by the very likely higher coking coal prices anticipated.
Note also that the escalation of resource project engineering costs consequent on the commodities boom is building in a cost structure that will have to be met by higher commodity prices ....... the trouble and infrastructural costs that the Aussies are having in getting coal shipped out of the Newcastle bottle-neck will help underpin new coal project economics.
Now if only we could sort out those fat yank bankers and avoid a US recession, then it would be full steam ahead for the super cycle boom !!!!
Overall I think NZOG got a good pass mark in bringing the certainly complex Pike project to a succcessfull and indeed oversubscribed IPO.
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Zorba,
My comments were not directed at the PRC board at all. They apply to the NZO board, who took on the Pike project when they clearly did not understand what was really involved. They obviously thought it was a much smaller, quicker, cheaper, project than it really was.
Management of the mine development appears to have been very good since Peter Whittall became involved. He appears to understand what is required, and it is evident that there have been a lot of changes under his guidance.
The transport arrangements have been a complete shambles, but the recent change to rail has sorted that out. Had that option not become available then PRC might have faced some considerable difficulty in bringing its product to market economically. I see this as good luck, rather than good management.
I have no complaint about the project itself. PRC appears to have achieved a reasonable result, in a reasonable time, and at a reasonable cost. But had the NZO board understood what was involved, I am sure that they would have approached the project somewhat differently and thereby gained a much better return for their (NZO) shareholders.
Those who say the options can't be extended are wrong - what I and others are saying is its happened before and could happen again - simple. The company was dual listed then as well.
Shrewdy,
Well deduced. The GSB is far too hard. Exxon came back and bid for a different block. Be very careful here.
Re the oil price....oil goes up....unless the US recession is really huge...Even then the Chinese and Indian juggernauts will soak it up amid decling production from 82% of the worlds oilfields so yes .....oil goes up.
NZO
10/01/2008
MINE
REL: 0945 HRS New Zealand Oil and Gas Limited
MINE: NZO: KUPE DEVELOPMENT WELLS DISCLOSURE NOTICE
New Zealand Oil & Gas Ltd advises that at 14:00 hours on 9 January, the 17
inch section of the Kupe South 7 (KS-7) well had reached a depth of 1852m
MDRT (measured depth from rotary table).
Drilling of the 17 inch section will continue to the planned depth of 2,000m
at which point the 13-3/8 inch casing will be run and cemented. Upon
completion, the 17 inch section of Kupe South 8 (KS-8) will be drilled and
cased. This will be followed by drilling of the 12-1/4 inch sections of KS-6,
KS-7 and KS-8.
Drilling began at 22:40 hrs on 19 December 2007. Progress of all three
development wells is summarised as follows:
22 inch 17 inch 12.25 inch 8 .5 inch
KS-6 560m 2,000m
KS-7 566m 1852m
KS-8 568m
Each of the three wells will be drilled by the Ensco-107 jack-up rig to a
vertical depth of approximately 3,400 metres.
The Kupe Project drilling campaign is being undertaken on a "batch-drilling"
basis. This process involves completing the same section of each of the three
wells before proceeding to the subsequent section and is a more efficient
approach than drilling the wells separately. Drilling of the three wells is
expected to take around five months to complete.
The Kupe Project is located within permit PML38146 in the offshore Taranaki
Basin, New Zealand, approximately 30km off the coast. The development will
comprise production wells tied into an unmanned offshore platform, a 30 km
pipeline to shore, and an onshore processing station. The Kupe Project is
expected to be completed by mid-2009 and produce approximately 254 petajoules
of natural gas, 1.1 million tonnes of LPG and 14.7 million barrels of light
oil (condensate).
End CA:00159195 For:NZO Type:MINE Time:2008-01-10:09:46:00
It's a bit like the Bill Tidy cartoon where Moses (with a unionist cloth cap) explains to the Isrealites that "we've got the milk and honey lads but the anti adultery clause stays in"
Only someone with a touch of psychopathy could lead a bunch of hopeful (but relatively ignorant) investors to join his scheme. The personalitiy, from the outside, is exactly that of a televangelist magnet salesman.
Follow my dream. The wounded lie by the wayside with McDunk. The believers keep on following hopefully with AR.
At the end of the road the dream turns out to be (TRUE/FALSE)
Overpromised - Yes, thats what psychopaths do.
Underdelivered - Watch this space.
Disc - Holding NZO PPP PRC
Mx