Hold on - hes no longer the MD - David Salisbury runs the show now; I even heard him at the AGM!
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Hold on - hes no longer the MD - David Salisbury runs the show now; I even heard him at the AGM!
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BHP .... hoping to win a rise in coking coal prices to 145 dollars a tonne for the year starting April 1, 2008 !!!!
Check out details in:
http://metalsplace.com/news/?a=16426
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Go Pike Coking Coal .... GO Tui Oil ..... GO Kupe Gas, LPG and Oil ......... GO NZO !!!!!!!!!!!!!!
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This ex-Taranaki lad took a drive down Inaha Road last night to see the new Kupe production station under construction -- it's being built just over the hedge from the 'runoff' farm that my family used to own when I was a kid and it was a real eye-opener to see the changes that have happened there since my childhood days of feeding out hay in freezing southerly gales. Kind of weird too to see the subject of a share chat forum in real life, which is not my usual experience.
Anyway, there is plenty going on and the foundations are mostly all laid out by the looks of things, with the first of the really big bits of engineering starting to appear too. Action everywhere except with the price of the options, it would seem!
I would be interested to know what value people perceive NZO should be worth at the moment.. (SP)? Also, can someone give me some idea about what "Hector" is?? Without going through the whole thread - I am sure the answer is in there somewhere..
Kiwikid , Hector is a dirty word now in the NZO dictionary. Six months ago it held the hope of being a big oil discovery in Taranaki. NZO hoped to find 60 million barrels and AWE had it as high as 1.2 billion . It drilled dry so we do not talk about it anymore. Hector is now removed from the hopeful drill prospects but i see Hector south is still their.
This drill and thrill is all part of the industry and NZO now with 5 or six dry wells in a row is about average for the industry .
NZO SP is now more than covered in the existing prospects.Most long term investers in this company pay little more than a passing interest in the upcoming drilling near KUPE,although mindful that a discovery will add considerable to the SP. The Sp does not need a discovery for support,being so cheap on fundamentals.
So Hector is a word in the NZO past drilling program. Amen.
[QUOTE=arjay;179286]Hi Bemuda,
What do you mean by 'significant shareholder'? According to the last Ann Report he holds less than 0.5% of the listed share
Correct me if I'm wrong!
page 48 of the annual report states -
Mr R A Radford in respect of 6,330,000 shares and 3,307,452 options
thats 2.4% of the shares and almost 2.4% of the options.
Petroleum and products exports were worth $185m in November, from just $3m a year earlier, with most of the increase from crude oil.
From the November Trade deficit announcement.
http://www.stuff.co.nz/4346638a13.html
Not quite (although well spotted Temuk). Can someone explain how TR can have an 'interest' in 6.3 million shares (P48) yet not be listed on P46 as holding more than 1.25 million shares? I'm not clear on how many shares TR holds in his own right and thus has voting rights for (to help block a possible takeover bid as has been suggested by one poster) or the to recieve dividends or other income from. It is clear though (see P46) that TR owns less of the company as a shareholder than the likes of several others listed including some who post on this site.
TR derives his not-insignificant income (deserved or not depending on your viewpoint) from direct cash payments from the company, and not from anything related to his shareholding in the company - and that's is my point. Bermuda suggests that, as a reasonably big shareholder anyway, TR will be keen to look out for the shareholders for selfish reasons. That's an interesting idea and it will be very interesting to see how fortunes might change for the shareholder once TR and those 6.3 million shares end up listed with the top 20 shareholders.
You've got me beat on that question!
perhaps BWR could come in here?
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Check this out . . . .
Oil $200 Options Rise 10-Fold in Bet on Higher Crude
http://www.bloomberg.com/apps/news?p...&refer=markets
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Thought I better repeat this. See page 50 of the Annual Report for TR's shareholding.
To me, that's a significant shareholding.
Also option holders will be pleased to know that it is in TR's interests to have these exercised. Additionally the company has publicly stated that it will be trying its very best to have them exercised.
It will be an interesting run towards the exercise date of June 30th 2008.....particularly as
1.The huge cashflows from Tui will be booked into NZO's accounts for all to see
2.Broker sentiment is rapidly changing and becoming favourable
3.Investor sentiment is changing and becoming favourable
4.The Kupe project is on schedule and within budget
5.The price of oil remains very strong
6.The Pike River project gets nearer to production
7.The price of coking coal will receive a big boost on ! April and could fetch $US150 per tonne.....and lastly...
8.The Kupe wildcat due to be drilled in May/June may well prove to be a trump card
Plenty to chew on.
Rest assured that TR will continue to look after both Shareholders and Optionholders interests....as he always has.
BEAUTIFUL!
[http://futures.tradingcharts.com/charts/BCW.GIF
I see 30,000 NZO shares were traded before the market opened at 1.17. The same thing also happened yesterday.
The buyer could have bought the shares at the market price on open for an average of just over 1.15.
I'm curious as to why this transaction would be placed and how it can be filled before the market opens? Can anyone enlighten me ... thanks.
No answers to that, sorry corran, but more questions on the same topic. There were trades around 4 p.m. on the last two Monday half holidays when trading was meant to finish at 12:30. On Xmas Eve the price was significantly above the day's average, on N.Y Eve, it was 2c below the earlier close. I can't see the why or how, but it seems there is the potential for price manipulation when most people can't make these trades out of normal hours. Especially the N.Y. Eve one . . "NZO finished the year at . . " Ah well, life's not fair is it, just have to live with it : (
But your post is cheering Bermuda, as they usually are : )
senors
a lot of TRs options and some shares are not paid up .... 1c rings a tune
It is an off-market transaction coded IN - Not sure IN stands for but could be "internal" or "inhouse" or similar - ie a crossing between 2 clients of the same broker.
Why at $1.17? - no idea - maybe someone has said buy me XXX NZO at up to $1.17 so a diligent broker has sold some of his clients holding at $1.17
Alternatively the broker may have just bought them later in the day
Malcolm - you seem to have found an extra day in June thats helpful! The company previously extended some options I think the B's?
1
The b's were extended,but were not the first options to be extended. In fact in this industry extension is more common than expiry or exercising. My personal thinking here is that the OD's should be extended much as the OB's were. That is given the slower than expected progress on KUPE and PIKE from option issue date the options need the extra time to bring the exercising as likely as there were on first issue. The OB's were converted to OC's on a one for two basis for both holders of Heads and Options at 2 cents per new option. This time we need the same arrangement of OD to OE but at no cost as it should be given as a dividend when no dividend can be given in cash do to nil imputations credits being yet available. Just my thoughts.
Correct Digger, but recall that the OBs were issued with a number of goals set for their life-span, one of which was the drilling of Opito. Opito was delayed so the OBs expiry date was extended (perhaps assisted by a bit of lobbying from option-holders in that direction?). Were the OCs issued with a clear set of objectives attached? As you say, a good option would be to do what they finally did for the OBs, and that is to issue new options (OE's) for a couple of cents to both OD and head holders - that is, if NZO wants to bother with options again.
With all the talk about the US heading into recession and the slow decline in sharemarkets generally, NZO seems to be doing quite well. It reminds me of someone trying to walk to the shore while the current is trying to drag them back. A scary 6 months for the ODs ahead I feel.
I won't be a favourite on this site for saying this, but i think it is absolutely ridiculous to be expecting the NZOOD's to be extended.
When issued, they had an expiry date which we all knew, and each holder had roughly 2 years to do with them what they want. Anyone that purchased additional options also knew the expiry date and risks.
How can people call for them to be extended just because they aren't in the money!!!! If you think they need to be extended (won't be exercised) - SELL THEM.
Imagine the market if options were extended everytime they looked like they wouldn't be converted.
It depends on what side of the fence you are sitting on. Ultimately, the decision should be in the best interest of the company. If they want to raise extra capital as the company has alluded to then extending the options would seem a logical choice if they are not in the money come June 30.
Double or nothing: traders bet on oil reaching $US200 a barrel by year's end
Grant Smith in New York
January 8, 2008
THE fastest-growing bet in the oil market these days is that the price of crude will double to $US200 a barrel by the end of the year.
Options to buy oil for $US200 on the New York Mercantile Exchange rose 10-fold in the past two months to 5533 contracts, a record increase on any similar period. The contracts, the cheapest way to speculate in energy markets, have appreciated 36 per cent since early December, with crude oil futures reaching a record $US100.09 on January 3.
While analysts at Merrill Lynch and UBS say the slowing US economy will lead to the biggest drop in prices since 2001, the options show some traders expect oil to rise for a seventh consecutive year. Demand will increase 2.5 per cent this year, the International Energy Agency (IEA) says. US oil inventories fell to a three-year low on December 28. Production from Mexico is declining and Saudi Arabia is behind schedule in opening its newest field.
"One hundred dollars a barrel is actually 14.9 cents a cup, so we're still talking about oil being remarkably cheap," said Matthew Simmons, the chairman of Simmons & Co International, an investment bank that focuses on energy. Inventories "are tight as a drum and I don't see how we get out of this box", he said in an interview on Bloomberg television last week. "Demand clearly isn't starting to slow down."
World consumption will rise to 87.8 million barrels a day this year, 2.1 million more than last year, or about the amount that Nigeria supplies, says the IEA, which advises oil-consuming nations. Demand from China alone will rise 5.7 per cent to 8 million barrels a day as imports expand to support an economy that is likely to grow 11 per cent.
Oil suppliers are straining to increase production. Saudi Arabia, the world's largest exporter, said last week that the 500,000 barrel-a-day Khursaniyah oilfield missed a December start date. Brazil's Tupi field, the second-largest find of the past 20 years, is more than eight kilometres below the ocean surface and will take at least five years to develop.
Mexico's state oil monopoly, Petroleos Mexicanos, suffered a three-year, 40 per cent decline at its Cantarell field, the world's third-largest. Since December 2005, fighting in Nigeria has reduced production 11 per cent to 2.18 million barrels a day.
Crude futures rose 2 per cent in the first three trading days of the new year, closing at $US97.91 a barrel in New York on January 4.
"We haven't got to $US100 on just a whim," said Paul Horsnell, the head of commodities research at Barclays Capital in London. "This is at heart also about longer-term concerns that supply capacity investment needs higher prices to keep up with demand growth."
Barclays forecasts oil will average $US87.40 a barrel this year, a 21 per cent increase from last year's average.
The Nymex options, which give speculators the right to buy 1000 barrels of oil in December, are becoming a favourite for traders, even if they don't expect crude to reach $US200, because they are a cheaper way to speculate than using futures contracts. Options expire worthless if crude fails to reach the "strike" price. There were 500 of the options on November 7.
The price of the options rose as high as $US550 last week before closing at $US300 on January 4. That amounts to 30c a barrel. The December futures to purchase 1000 barrels in December rose 3.5 per cent to $US94,010, or $US94 a barrel.
"The most common analogy used to describe options is that it represents insurance" against "low-probability" events, said Tim Evans, an energy analyst at Citigroup Global Markets.
Oil forecasters say there is no chance of $US200 crude, as the US, which consumes a quarter of the world's oil, slows. Prices will average $US78 a barrel this year, 20 per cent below the present level, and $US75 in the fourth quarter, according to the median forecast of 27 analysts surveyed by Bloomberg. The last time prices fell that much was in 2001, when they dropped 26 per cent.
Merrill Lynch and Morgan Stanley in New York expect the US economy, the world's largest, to slip into recession this year. The jobless rate rose to 5 per cent in December, the highest in two years. The Institute for Supply Management's factory index fell to the lowest level in almost five years in December.
Oil was overpriced, given the outlook for the economy, said Jan Stuart, an analyst at UBS in New York. He forecasts an average price of $US74 a barrel this year, little changed from last year. Merrill Lynch's Francisco Blanch predicts $US78 in the fourth quarter.
"I am afraid that we are going to see an economic slowdown that we have not seen the beginning of yet that will take some significant amount of oil demand off the table," Stuart said on January 2.
But most strategists didn't foresee last year's 57 per cent gain. Crude traded at an average of $US72.36. A Bloomberg survey of 29 analysts in September 2006 forecast a median price of $US64.
"Going through $US100 means that people are seeking more protection against a higher number," said Michael Lewis, a strategist at Deutsche Bank in London. Deutsche Bank expects oil to fall to about $US80 a barrel.
Options trading indicated that the likelihood of crude reaching $US125 a barrel in December had almost doubled since December 25, to 18 per cent, Mr Lewis said.
While $US200 may remain an outside chance, Matthew Simmons has shown he is willing to make that bet. He wagered $US5000 with the New York Times columnist John Tierney in August 2005 that oil would average at least $US200 a barrel in 2010.
The latest assessment from OPEC, which produces 40 per cent of the world's oil, suggests prices will rise.
"There is enough oil in the market," Chakib Khelil, the president of the Organisation of Petroleum Exporting Countries, told reporters in Algiers at the weekend. Mr Khelil, who is also Algeria's Energy Minister, said rising prices were not OPEC's fault.
"You will see even $US200 oil in the next five years," said Jean-Francois Tardif, a senior portfolio manager at Sprott Asset Management in Toronto.
As an option holder, you should be under the perception that the company reserves the right under the NZX rules that they can extend the expiry date. Whether they do or not is another thing. It adds to the volatility that there is big money can be won and lost on these options.
No not at all. The options were issued fairly at 1for 2 to all head holders and listed as tradeable. What each holder then does with his or her holding in options is there own business,and in keeping with what they think the future may play out.In no way is the company responsable for this indiviable choice,so the company can only assume all holders are as they were at options issue date. Extension for whatever reason on this basic is fair if heads and option holders are included as before. It can also be argued as it has happened before it is part of the expected culture of this company,while not necessarly a condition of it. So it is just as much a personal risk to sell thinking they will be out of the money as it is to hold thinking they may be extended. At this stage i doubt the company inself has a clear opion on the subject. I just brought it up to express what i felt was the best way forward for the company given the large revenue increase that will mostly happen after 30 june 08 and further protection from a too cheap takeover.
I am advised that the expiry date cannot be extended. The requirements of both the ASX & NZX rules need to be considered. Where there is inconsistency between the rules of the two stock exchanges, the more onerous requirement of the two exchanges needs to be considered as applying.
I agree entirely. There is no way they can extend the date without one hell of a legal battle. The expiry date has been set and that's that.
You make your decision to buy or sell based on that date. Not some other date.
Let's hope ( for option holders sake ) that the Kupe wildcat can be drilled before June 30th....or that the market wake up to the real value of NZO before June 30th.
Bermuda,
I would be happier if the ODs just faded away. They have been a useful anti-takeover device, and if Hector had come in they would have provided the necessary development funding.
At this stage there is no demonstrable need for the extra funds - and until the board demonstrates a better grasp of running new projects (following the Pike fiasco) the thought of them having $200M to play with is frightening.
Current market cap is about $300M, and for the ODs to be exercised it would need to increase to $600M. Return on investment would suffer drastically, at least until such time as the new funds were deployed in such a way that they earned at least as much as Tui/Kupe.
Much of the $200M required to take up the ODs would be reluctantly supplied, which would mean a lot of sellers for a few months after July. A significant proportion of the new shares would presumably go to NZO holders, so many of them could be expected to sell down NZO heads to raise the funds. The share price is already under enough pressure due to the absence of buyers, so we do not need to encourage sellers.
Looking forward to the quarterly report, and hopefully the continuation of oil prices at these amazing levels.
Hear hear Unicorn
In agreement although the "fade away" would transfer market value to head holders from option holders and the company is IMO not signalling clearly enough - probably because they don't really know either until after Kupe drills - which is too late.
If they pulled the useless dual listing (dropped ASX) then they might be able to extend the ODs conversion date???
Unicorn, Bilo
Yes I agree your thoughts. NZO havent signalled anything specific for the option funds apart from some rather old and now vague thoughts on an aquisition. With the opportunity to purchase Swift Energy now gone I cannot see why they would need the dosh.
Ok the real value of NZO might be north of $2.00 but as long as these options are in existence the SP wont go above $1.50 unless the Kupe wildcat came in big time.There are just too many to be exercised.
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YES, let em fade away .......... But, if we want join the big boys in the GSB, the extra $200m will come in pretty useful !!!
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Unicorn,
Would you rather have your money with the operators of the Penasquito mine in Mexico where the capital cost went from US$882 million to US$1.5 billion, or the operators of the Galore Creek mine in Canada where the capital cost estimates went from US$2.0 billion to US$5 billion? There are plenty of other examples around, and closer to home.
NZOG has produced a very good result through their joint venture involvement in the Tui project; Kupe seems to be progressing very well; as is Pike River. I am not quite sure what fiasco you are talking about but if you keep repeating it often enough !!
" better grasp of running new projects (following the Pike fiasco) the thought of them having $200M to play with is frightening."
what was "the Pike fiasco"...... ??
Zorba,
I used to think that joining GSB would be in the best interests for US...
Im not so sure about that any more... it would have to be one of the most expensive places on Earth to Drill and its risky business...
NZO is building a stable company of diversified revenue streams and massive costs in GSB could rip apart all that has been done by this company in an attempt by NZO to increase investors wealth, (which has fallen on deafs ears)...
....
...
..
If Future oil Prices keep rising then the recoverable amount of oil from Tui will go Up, and possible further upgrades... Oil's at historic highs and over the last 140years oil prices have average $15 US per barrel...
3 major spikes have occured looking at historical Oil price charts and the other 2 were caused because of specific events... The current oil price ATM is supply and demand stuff... Its been no shock this time....and Oil to go higher I reckon... Turn the TUI tap off, wait for $200 oil.... then turn it back on... simple, highly profitable strategy...
lata...
:cool:
.^sc
The Pike fiasco ...
NZO 2004 Annual Report - FID early 2005, 12 months development, production early 2006
NZO 2005 Half Year report - mine development cost $70M
NZO Sept 2005 announcement - an IPO by March 2006 and
possibly earlier
NZO Dec 2006 announcement - the resignations of Messrs G Duncan, D Wood and J Ogden for personal reasons
The major quantifiable targets were not met, and were out by about 300%. The independent directors all resigned. There were numerous delays to the IPO. The transport arrangements were delayed many times, then totally replaced.
To me this does not show a Board with the necessary understanding of the project they took on.
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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
I like your post it leads us up to the most interesting time in the NZO history.
The burning question is the parcel, what if anything is it worth when the music stops?. At the very start i valued the parcel at 5c to take in the risk factor. I later said it was worth nothing. Its not to long to go the music is heating up the parcel is getting lighter as it goes round. The burning question is ARE you all to scared to state before the event what you think the parcel is worth when the music stops. NITA you are in love with the company start a WHATS THE PARCEL WORTH COMPETITION. Put me down as a big round circle. Only kiddin guys but it would be better than listening to peak oil all the time. Macdunk
Pretty impressive looking ship that Apache ...... looks like it means business
Strange site though.... this working ship moored in front of a crusie liner
To 11 January 2008: Approx 6.9 million barrels produced, 6.4 million barrels shipped. NZOG's share of production to date: Approx 860,000 barrels.
To 07 January 2008: Approx 6.7 million barrels produced, 6.4 million barrels shipped. NZOG's share of production to date: Approx 840,000 barrels.
http://www.nzog.net/tui/
So humming along nicely at 50000 a day.Those of you that think that will not be the case throughout 2008 could you outline a rough plan of when you expect production drop to set in. Remember this is a very porus rock so production will not drop till well after 50% of oil in place has been removed. I would love to know the history of the water cut.About time we had a update.
Digger,
The middle of this month marks the half way point in the 2007/2008 years production. It looks like about 7.2M barrels will be produced by then, which is about 20% up on pre-production estimates.
The current (end of November) estimate of 11M barrels for the 2007/2008 year means just 3.8M can be expected in the second half of the year. The pre-production estimate for the second half of this financial year was about 3.2M barrels, so if we increase this by the same 20% factor we can also expect another 3.8M odd barrels - so the original production profile still applies.
We know the water cut has so far been less than expected, so to get back to the original estimates the water cut will be more than was expected in the second half. The information released by the company, which has a lot more technical expertise than me, has told us to expect that. I am sure the company would have released an update, if one were available, rather than risk having their technical staff look like chumps.
Duncan - the music has yet to start
What do you reckon TIM A SLOW FOX TROT or a tango or perhaps something a bit faster finishing up with a great chorus of i told you soes. You have to admit it will be a very interesting time so lets hear the result now before the music stops pick your lavel above or below and by how much simply as a bit of fun. I hope i am wrong but then my honest opinion is the parcel will end up worthless, so lets hear you predict what the parcel contains six months out from the grand opening. The company is coining it in, the sp should rise, but then they have pissed so many investors off with their lack of disclosure that it brings it back to a do you trust the company scennario. What do you reckon tim the options are worth if anything on conversion day?. Macdunk
IMO the ODs have chosen an unfortunate six months to finish their dash. Unless a mechanism is artificially put in place to get the SP above $1.50 (eg a buy-back or take-over bid) I can't see the oppies in the money. A big strike at Kupe might do it, but woudl the details be out in time? I say 'unfortunate' because the US appears to be heading for a recession and this may have the short-term effect of (1) reducing demand for oil (price drops temporarily), (2) squeezing the amount of invesment dollars and (3) spooking investors generally.
Story on stuff yesterday: http://www.stuff.co.nz/4349412a13.html
"In comparison, the west coast Tui oilfield had about 100 million barrels of oil in place and had produced about 42 million barrels, Mr Beggs said."
I assume what they are saying is there are potentially 100m barrels in Tui, of which 42m are recoverable. Still a lot of room to move upwards.
.
Arjay,
Good points ..... each and every one !!!
.
And as for poor old DM, ever since he got out of NZO, the poor old guy has suffered ongoing tamporal insertions everytime anything positive is posted about NZOG.
Please note dear DM:
That in this falling market, brought on by those Yankey Monkey Bankers and their Rating Agency Toadies, those same high rise New York financial wizz kids and their Hedge Fund short sellers who would strip you and me of every cent if they could, that NZOG has held up remarkably well !!
INCIDENTALLY dear DM, did you bother to read the Five (5) Articles published recently in the NZ Herald (that absolute bastion of NZ moral correctedness) by Mark Pittman (of Bloomberg Financial News Sevices, see Bloomberg and NZ Herald websites) relating to the CATASTROPHIC behaviour by the the US Mortgage, Banking and Financial systems, surely documenting clear evidence of moral corruption on a par with the Enron dissaster and the Iraqi invasion -- Dear DM what has happened to the immense moral compass that the great US of A is supposed have, prithy tell us dear DM ?
Please dear DM, give some thought to these salient facts, please give some credit where NZOG credit is due !!!
Dear DM, sleep well on these matters, lest your health suffers irretrievable tamporalities.
.
Tamporal Insertion. My gosh thats a new one. Perhaps that insertion could be in his mouth and used as an ALL DAY SUCKER or a GOB STOPPER. Perhaps with all of dm's dribble that tamporal insertion will expand so much it will shut him up for life. macca, as we speak i got a packet of super size coming your way in the mail.
Arjay. I concur as well. The timing looks to be lousy for oppy holders including myself. Although i am one of the lucky ones who sold at a couple of good prices.
imo i think nzo are absolutely going gang busters at the mo. since the big flops with hector, the last six months has been huge. Since hector there has been great results with a potentially messy pike transportation sorted out. Tui is performing significantly better than expected at a very high price as well. Kupe with inital cost blowouts like pike is falling into place nicely. i expect big things with kupe and investors will not be dissapointed. if nzo is around $1.10 to $1.20 by May or June then i will be all over it like macca with his bottle of scotch.
Quote:
MD-WHATS THE PARCEL WORTH COMPETITION. Put me down as a big round circle. Only kiddin guys but it would be better than listening to peak oil all the time
for the "whats the parcel worth competition", put me down for 4cents at this time period....(currently trading at 7cents)...Yah just never know....
....
MAckdadunk,
peak Oil, and oils pricing is one of the most important fundamentals of this company...
with out oil then NZ oil and gas, would be just 'NZ coal and gas'...
... Think of the cost of changing ticker code?.... from NZO to NZG, or NZC :D....
or just forget about the NZ bit and make it CGE...:p
E stands for exploration...
....
Arjay,
In answering your question about a 'big strike' before option expiry...I donot believe the 3 Kupe development drills will offer a big run in SP... they will take 5 months to complete with priority to The Momoho exploration well, which is not expected to spud/complete until after option expiry... IMO the 3 development wells will meet investor expectation when they flow just like what happened with the TUI project during its core development stage, No major excitment came until exploration side of the project came into full swing.... Calling Momoho an exploration well isnot technically correct, its far from wildcat drilling... It's testing the same formation and sandstone reserviour as the 3 wells in the main development program which will be put on standby for production once fully completed, which is a certainty to happen....
The Ensoc jackup rig has arrived very late and is holding up CUE and first production of its main project, Maari....
Arjay, great idea for getting the Options over the line!
So what could get the options over the line?
well not alot really... A takeover as you said, is every much so an outside shot which would be one of the few ideas for $1.50 and above at conversion time... but why would such a thing happen with all these options on the market and dilution of any takeover to the interested party... The only other idea I have is if Oil Prices boomed to $150US and above...also, 1st pike production could get them there if theres a few hidden surprises and market wakes up to PRC's value which is far above $2 if production is going off current reserves...Major re-rate isnot unquestionable with PRC, and NZO from its other two projects... is it likely in the next 5 months for major run in Oil prices like to $150-$200US? not really... but within the next 5 years its almost a sure thing I reckon...in 5 years, the historical average of $15 will be set at a new historical average for the new generation and 140year block of time of much greater than $100US... IT is a sure bet that historical average of Oil price will increase year on year from here on in...If the NZ govt didnot take the biggest piece of the pie at the Pump then it wouldnot be so bad for us Kiwi's because oil is still cheap, it just looks expensive for us when we are filling up... I love it....
...
In a few years NZO will be rue-ing the fact that they sold down there stake in KUPE to 15% what was it previously?.... long term earner here...
...
...
..
Im eyeing NZO up once again for a trade... I've recently posted about how crazy the SP is.... Im looking to enter prior to MOMOHO (remember this name), and ride a 'big up' shot target with little down (protected by 2 key developing projects, one major producing project)....
At this stage if NZO is below 1.30 1-2 months prior to Momoho drill then I will be all over the stock...Success rate of this well is more highly expected to come through than any of the previous wells in the Tui project and perhaps in this oilers history (big call)...Its great risk return for investor dollars IMO.... I should be all over this one now but in 4-5 months im prepared to lose 20CPS on entry price with market risk and all, and funds for me tied up in other areas... it sucks this time around I wont be able to trade the options...
NZO should be valued at $1 with TUI, KUPE, portfolio of permits alone, and upside to reserves, also previous upside to reserves which have been announced, but market missed them... PIKE is just a bonus....
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Disclosure...
As I said I will be looking to re-enter NZO in 3 months plus or minus...
But In late feb/mar around these prices ($1.11) with DOW above 12000 I will be in...or up to $1.30 in may/June I will be in...happy to fence sit ATM...
Ive doubled up my small holdings of FAR to average down to .1375 after buying a few days back at .145, and doubling up at 13c... I will sell this stock on any day of the week for VPEO sub 6cents... I will trade FAR's current drill, which does have risk like all oil activities...
If I donot see VPEO sub 6cents then I will buy Vic P shares...
im 30% cash and my holiday earning money will go on NZO...
only currently holding a small position on FAR and a larger position on VPEO, and cash...
im only playing with profits...
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Christchuch Sharetraders meeting is being held on the 9th of FEB at the DUX DE LUX, 5pm.... I will be attending... If your living in CHCH, and youre not going to come... Then ask yourself this one question....
Why???
foreigners other kiwis and other internationals are welcome to visit us at this highly prized National Convention event..
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Great to see a few posters here on this thread with an incredible set of skills...They are setting the bar higher for the rest of us posters...
keep the good oil,coal and gas info coming...
lata...
:cool:
.^sc
NZOOD 7cents looks good enough for exit....
in 3 months with NZO at $1.30 OD's will prob still be around 7cents or much less because of further time decay....
:cool:
.^sc
You guys are brave to play the options. The Doc will stick to the head shares.
I think the options will prove to be worth nothing.
A lot of the potential value of options is in the leverage they afford. But there are practical limits to this as conversion approaches, because the greater the leverage the more needs to be found (borrowed) to convert. Currently NZOOD offers about 21 to 1 leverage at conversion - so for every $10,000 spent on NZOODs now an investor might be required to come up with $210,000 to convert them. I doubt that many investors would be able to take on more than 5 to 1 leverage, which still means borrowing $50,000 on a $10,000 NZOOD investment. Even if NZOODs are "in the money" just prior to conversion a number of shareholders will realise the potential call on funds and dump their NZOODs or let them lapse.
Assuming an investor can take on 5 to 1 leverage, at a cost of 2% (which is reasonable to convert and quickly sell the excess NZOs converted), I calculate the breakeven point between buying NZO and NZOOD is about 170c. Anything below 170c and NZO is the better option, above 170c and NZOOD is better. Add some weighting for risk, and it appears that NZOOD holders should be expecting the share price to be north of 175c in July. That is a long way from where it is now.
The best prospects for NZOODs are, in my view, that they may show a great (but temporary) percentage gain if there is some goods news in the next month or two (e.g. the next quarterly exceeds market expectations and gives a good boost to NZO heads).
There are too many on issue to be worth anything. Even if the Headshare tried to get over $1.50 and the oppies started to look okay, you would find as the countdown began that shareholders would start "selling the heads to buy the options" and thus the whole thing would get destroyed.
Options therefore zero.
5 months is a long time in the life of an option
I was expecting NZO to get rerated last yr - it didn't happen but I still think this company is going to get rerated at some stage - whether or not it happens before the 30th june, I don't know
If it does happen within the next 5 months the options will be well in the money. In my opinion it's worth the risk - but it is a big risk.
.
As a convert to yogi-in-oz's astroturfing I predict the value of the options will be known by the end of June.
Good to see the thread remains the same.
regards
Paper Tiger
I too beleive the options will worthless by June 30th, however Nita is still on the fence with the possibility of jumping in for more.
Wait for it...
Some excellent points made, in various perceptive postings above. I came to the conclusion several months ago that the chances of the options being worth anything on expiry date were looking exceedingly unlikely, and I took my profits.
Put me down as a member of the zero brigade.
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More loot for the head holders when the re-rating finally comes after a full year of Tui production ......
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Shrewd, good point about the price a the pumps. $US100 per barrel works out at about 70c NZ per litre of crude, so refined product probably still comes in under or around a buck a litre at the pumps. The extra 80 cents is added value for aunty Helen's troff.
I am not a big risk taker, hence most of my decisions are based on fundamentals investing for med/long term. I dont have a crystal ball and have no idea if NZO will be $1.50 or not in 5 months time. If these were "in the money" options I would take a punt, but "out of the money" options are far too risky for me.
The Doc prefers to stick to head shares.
http://www.aip.com.au/pricing/marketwatch.htm has 95 Octane at A$113 say NZ$129 a barrel, wholesale, untaxed, ex east coast oz refinery. Our wholesale prices should be much the same in as much as they actually exist.
Add to this, the distribution costs and the retail markup (and our retailer provided all our kids with their first work experience) and you get the cost of petrol. The price of petrol on the other hand includes, as Arjay notes, a contribution to the shieks of Wellington. Blaming Arabs for the price of oil is a bit rich when you see what our own kith and kin are doing.
Currently refining margins on petrol are under $US10 per barrel, say 7c / litre so the Wellington cut may be even bigger.
IMO currently, the Oppies will be in the money, just. Too late, too much cash required. But this is probably the worst outcome as they will still be worth nothing as the company hasn't got anything more worthwhile to spend it on than what they currently have capacity to finance.
The best option then will be to look for an amalgamation with an Ozzie oiler. I won't like to be putting in my share of NZD150M for that prospect...so my Oppies will still lapse...
The Directors have stuffed this up bigtime, only extreme luck can save them now. There was never a need for these Options, as there is no need for dual listing, and no use for yet more capital...they should have offered to buy them back for 10cps (or at market which was very close to 10cps) at the AGM. Instead they chose to stuff their shareholders around to the tune of 150M x10c or NZD15M...
The decision to do nothing was a mistake...time will tell
Indeed Manxman, from what you say we'd only be paying around 65c/litre if the stuff wasn't taxed etc. Even so, apart from metred water at the gate, is there any other commercially supplied liquid that is as cheap as $1.80/litre petrol? The stuff's still ludicrously cheap for what it is.
Why do you suggest that the directors "stuffed up bigtime" by not needlessly giving away $15M of shareholders funds?
How did they "stuff their shareholders around"?
The options were given away, and have provided takeover protection and an opportunity for taking profits or extending exposure during the extensive 2006/2007 drilling program. They have done their job well. The drilling program came up empty, so the options probably won't be in the money. Pretty much what was to be expected in those circumstances.
do the opposite of what most posters say and you will probably make a lot of money - thus buy more options!
as stated at the agm, nzo is focused on making the conversion.
2 financials due out in next month and a half - will rerate the company
m
any idea if kupe will be flow tested upon completion of the 3 production holes rather than wait a year before the production facility is up and running.
me thinks production could start sooner using the swift facilities purchased by origin.
M
30 km from kupe landfall to rimu production station - why wait a year to use jv new facility when a lousy 30km 6" pipeline could start cashflow starting much sooner.
origin have flagged up potential advantage for kupe with the swift purchase and this has been mentioned before on this thread.
kupe production could start before end of june with a 6" 30km pipeline to rimu.
impact on sp? would it go up 20c? - i think so
impact on ocs? converted!
my tip for pass the parcel oc is 30C
M
With production drilling to be completed within 5 months it is the Production station on the critical path. I have been thinking that there must be a good chance of the new plant being commisisoned earlier. Perhaps even later this year which would be good news in itself?
Chippie
I would be very surprised to see the plant commissioned earlier than planned 2Q 2009. There are too many pieces of kit being sourced and fabricated around the world in an already very tight O&G construction market. I will certainly be pushing to see it commissioned on time.
The Machine suggests....
30 km from kupe landfall to rimu production station - why wait a year to use jv new facility when a lousy 30km 6" pipeline could start cashflow starting much sooner.
origin have flagged up potential advantage for kupe with the swift purchase and this has been mentioned before on this thread.
kupe production could start before end of june with a 6" 30km pipeline to rimu.
impact on sp? would it go up 20c? - i think so
impact on ocs? converted!
Machine the Rimu facility would need to be revamped to be able to handle the Kupe fluids. Kupe has quite a lot of nasty shiit that needs to be processed so at this time I would be surprised if it could be completed before Kupe is running. Yes I would expect Origin does see synergies between the plants such as common pipelines onshore and also the development of the offshore areas from Rimu!
Dont be at all surprised to see expansion of Kupe, there is provision for it some where down the line?? ;) If my memory is correct Kupe was priced on $45 boo and where are we now. This field should be another gold mine for NZO.
Oiler
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Oiler,
Agree with you ...... whole process and plant fabrication is far too complicated to rush .... look what happened to the BasGas processing plant .... what a disaster that was.
So steady as she goes and crossed fingers for smooth start up mid next year !!
.
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Steve,
Below follows a summary by EnergyReview back in 2005 of some of the issues to do with the BasGas project.
AWE and Origin (operator) were involved along with Clough (engineering contractors). As you can see it all fell apart horribly with Clough "evicted" from the project.
Everyone hopes Origin learnt a huge amount form the BasGas debacle - the project was finally brought to full operation but at huge costs and delays.
Origin are the operator for Kupe project ..... contract is with Technip, I think on a profit/risk sharing basis with Technip .....
So I'm all for the Kupe project to proceed steadily and surely with everything thought through, no hurried completions or sudden fancy new ideas, not good engineering to do new stuff at last minute ...... meeting the mid 2009 start-up is the key of course.
Origin and Clough eventually settled out of court ..... certainly not the way to finish up a major project !!
.
************************************************** ***********
First BassGas sales expected next month
Steve Rotherham
Wednesday, January 19, 2005
HAVING evicted Clough workers in mid December, BassGas operator Origin Energy says the outstanding engineering work required to complete the project is almost finished and the introduction of raw gas to the offshore platform is now expected by the end of January.
"Following this milestone the project will commence commissioning of the offshore platform and packing the 187kms of raw gas pipeline that runs from the platform to the onshore processing plant located near Lang Lang," Origin said in a statement.
First gas sales are expected to begin in February 2005 and design flow rates should be met in March, according to Origin.
The BassGas joint venture has engaged Downer Engineering to complete the remaining rectification works and modify the offshore facilities and onshore processing plant to handle some impurities in the gas stream.
"The original plant design allowed for some of this additional equipment and its inclusion will not materially impact on the economics of the project," Origin said.
The original contractor, Clough Ltd, was ejected from the project following a protracted and bitter dispute with the BassGas partners over delays to the project.
Clough managing director David Singleton claimed that delays had occurred because Origin had fallen behind with its offshore drilling program and had failed to provide gas suitable for introduction into the development. He also said completion of the offshore works had been hampered because Origin had restricted access and not provided suitable offshore accommodation.
Clough submitted a certificate issued by Lloyds of London certifying the offshore facilities were contractually ready for start-up (RFSU) and implied that the delays had much to do with the mercury levels in the gas.
But Origin said the Lloyds inspection did not cover all of the work required to be completed under the Contract to ensure that RFSU was achieved. It also maintained that Clough was misrepresenting the mercury issue.
"Detailed analysis of the Yolla 4 results indicate that the raw gas is within contractual specifications but that traces of mercury have been detected in the Yolla gas stream," Origin said.
"This eventuality was anticipated in the contractual arrangements with Clough and consequently the onshore plant was designed with the flexibility to deal with this issue. This has not impacted the delays experienced by Clough and is not expected to have any significant economic impact on the performance of the BassGas project."
Origin is seeking liquidated damages for each day the project has been delayed. But Clough maintains it has met its obligations and that many of the hold-ups have been caused by obstructive tactics on Origin's part and, in particular, on the part of the project manager.
Clough wants $25 million in 'quantified' claims from Origin, plus 'further general damages and damages under the Trade Practices Act'. These additional claims are understood to include $12 million in milestone payments Origin has withheld over the past two months and a similar amount in damages.
In December an arbitrator was appointed to sort out this dispute. Professor John Uff QC of Keating Chambers, London – who is experienced in construction disputes and arbitrations – will preside over the first directions hearing in Melbourne early this year.
.
[quote=zorba;180521].
Steve,
Below follows a summary by EnergyReview back in 2005 of some of the issues to do with the BasGas project.
AWE and Origin (operator) were involved along with Clough (engineering contractors). As you can see it all fell apart horribly with Clough "evicted" from the project.
Everyone hopes Origin learnt a huge amount form the BasGas debacle - the project was finally brought to full operation but at huge costs and delays.
Origin are the operator for Kupe project ..... contract is with Technip, I think on a profit/risk sharing basis with Technip .....
So I'm all for the Kupe project to proceed steadily and surely with everything thought through, no hurried completions or sudden fancy new ideas, not good engineering to do new stuff at last minute ...... meeting the mid 2009 start-up is the key of course.
Origin and Clough eventually settled out of court ..... certainly not the way to finish up a major project !!
.
Good response Zorba. No contractor would want to go through that debacle.
I am sure a lot of thought was put into the execution strategy for Kupe. Ozzies arent so keen on "alliance" contracts but they have become a very profitable approach for all parties concerned here in NZ and there is a lot of kiwi influence within the Origin camp in NZ. ;)
NZO holders can relax in that I wouldnt expect any surprises "good or bad" to come from Kupe until after start up.
Oiler
down again today, i am kicking myself for buying them at 1.16 :(
Hi remy
Do not kick yourself too hard. The retreat to 110 was just the market in a bad mood. Maybe it will feel better next week. The american subprime is sure a bit of a problem and probably for oil consumption is a good thing. Will have to slow up on oil use one way or another so if a ressession is it then so be it. Meanwhile the company has 12.5 % of another 50000 barrells today.
only need to kick yourself if you sell below the price you brought at. hold this stock for the next 12 to 24 months and you will be laughing all the way to the bank
This morning the buy was $1.10 & the offer was $1.12
thenm someone decides to sell 926 shares at $1.10 when they could have been offered at $1.11. The US market has bounced overnight, oil is up. I believe that for the second time in less than a year this stock is being deliberately and legally manipulated down.
I suspect that if another seller turn up at $1.10 then the order for 926 shares will mysteriously disappear leaving no trace.
What do others think?
Totally agree AMR if you believed in them @ $1.16 and nothing has changed then today @ $1.09 you can buy some more on sale!
I was thinking of topping up some more NZO shares today, but bit my lip and walked away from the computer. May top up more if the sp drops further.