According to Mr Market I am much wealthier today than I was on Friday. Even though nothing has actually changed for the business so far as I can tell.
To think, they still teach Efficient Market Theory! Remarkable really.
Printable View
If Ironbark is successful you will be millions wealthier if the market prices in the Billions Ironbark will be worth
If unsuccessful according to market theory and Northingtons report only a tiny bit less wealthy as the money for the drill has already been escrewed and Ironbark has little value.
Even though we are told there will be no further takeover offer I do wonder if OGOG may reconsider in light of global events.They certainly are unlikely to try another scheme of arrangement.
The recent Beach Annual Report you mention makes a total lie of the view expressed by NZO Directors .They claimed that when CUE (was it Andrew Jefferies at the good oil conference) stated a 1 in 4 chance of success this was only of finding hydrocarbons but commercial success was only in reality a 1 in 20 chance .Furthermore the Beach report had no effect on the market price of NZO .In a truly efficient market believing company statements-and there is no reason to for any bias in the Beach annual report in contrast to NZO statements-we could have expected the NZO share price to increase significantly .One can only conclude that the recent volatility in the NZO share price has been a product of factors that the market cannot efficiently price.In other words the share price cannot be taken as a fair and reasonable reflection of the value of NZO .
Interesting and relevant article from the Herald:
https://www.pressreader.com/new-zeal...81977494551330
Could OCOG be back in the market? Are they allowed??
Not 100% sure how this works but under the creep provisions they are allowed to purchase up to 5% per year without invoking a full TO. With every 1% that they cross ie from 70.2% to 71.0001% they have to inform the market that they have been buying. So if they have been then once they hit 71% we will know it is them. Not sure it that is the route they (OGOG) want to take as it would just take forever.
I feel confident that they will not take this route.
Ironbark is scheduled to begin drilling anytime from april but more likely in the 3rd quarter this year.
Historically once a drill starts the sp rises-the "thrill of the drill"
Hence if they make another offer it is more likely to be sooner than later and the offer would have to be good enough to get 90% of the total shares-since they already have 70% they only need another 20% to have a successful takeove and get more cash from NZO coffers than they would have to pay for the outstanding 30% shares by my rough estimate(which could be wrong as we do not know how much they would have to pay)
If the Tawhaki-1, shortly to be spudded-in, drill off the Otago Coast becomes a discovery it will turn the area from a frontier region to highly prospective. I expect this would cast a positive glow towards NZO's Barque prospect.
https://www.odt.co.nz/star-news/star...h-island-coast
Boop boop de do
Marilyn
Fish
"Ironbark is scheduled to begin drilling anytime from april but more likely in the 3rd quarter this year."
The Beach Energy website is showing the likely drilling date for Ironbark as - Drilling planned for FY21
.
A foolhardy action if they were to do this.
The securities solicitor advising them would be offering them two bits of advice;
1. NO! &
2. HELL NO!
And if the advice was ignored;
Get out of my office now.
Richmond & others v PPCS Limited [2004] 1 NZLR 256.
Boop boop de do
Marilyn
There is no reason to think that OGOG are doing anything illegal.
They may have tried to buy the company for a song, but any suggestion of illegal (or even borderline illegal) activity is nonsense.
They are a large and reputable organisation and I seriously doubt they would do something that stupid.
They have also told Brian Roulston to his face that there will be no additional takeover offers. They have reiterated this message to others too.
They may well exercise their right to grab another 5% of the stock. And if it is them buying up at the moment, so what?
It makes zero difference to the equity owners that plan to stick around for the Ironbark drill.
Whether OGOG own 70% or 75% is meaningless. In fact, it would make it harder in the future for them if they did change their mind about a takeover as the shareholders that are reluctant to sell would make up an even larger % of the remaining minority voter base.
"They have also told Brian Roulston to his face that there will be no additional takeover offers."
I can confirm what MisterTea is stating - the OGOG directors were quite definite that there would be no further offer, and were keen to learn what other shareholders want from the company. they will be reaching out to meet as many as they can to arrange one on one meetings. Noting that OGOG doesn't have any other company with third-party shareholders they were surprised at the feedback during the SoA process and have taken that on board.
Irrespective of the intent, they would be crazy to do anything stupid, especially so with their significant interests in other parts of the oil & gas industry.
Agree they will do nothing illegal.
However it was not honest to tell the takeovers panel that Ironbark has only a 5% chance success.
They have also mislead us before on 2 occasions about no takeover offer
We know they are capable of deception and I think they are going to find it difficult to work with such a disparate group of minority shareholders .At the AGM we saw one very capable and hostile shareholder.
Just because they say no further takeover offer does not mean they will not change their mind.
New information from other drills,an increase in futures for gas etc could be a good reason
They may want to enter a major transaction and minority shareholders who vote against the transaction have a right to be bought out at a fair and reasonable price.
My feeling is they are not buying shares as really there will be no point as they cannot get to 90% for at least 4 years.
The only thing that makes sense is to make a takeover offer at a fair and reasonable price
Fish, there was a lot wrong with the SoA process, but to be fair the OGOG directors weren't involved in that.
The 5% chance of success and other similar misleading factors were very much the fault of the Takeovers Panel itself together with Northington and the chair of the independent directors. Amateur hour is the term that comes to mind.
OGOG know from the feedback they received that it is going to be difficult to deal with shareholders with their wide range of views as to the way forward.
Agreed. And I don’t actually think it is in the best interest of the business for OGOG to spend a lot of time trying to canvass some kind of consensus from minority holders that they will never achieve.
They, along with Management, are supposed to be the experts and they need to chart a way forward. Just like we expected them to do before the SoA.
Trying to get useful information about what they specifically need to do from a generalist investor like myself would be nuts.
If they decide in the future that they want to have another crack at buying out the minority interest, then yes - they should have discussions with the larger minority holders to get a feel around expectations. Fairfax did this very thing when they attempted to buy Tower - and they got the blessing of two of the largest shareholders. The deal ultimately failed - but not because of their process. It failed because Vero were more cunning.
So beyond consultation in the future should they change their mind about a takeover - I think they just need to get on with it. Do with the cash what they would have done if NZOG was a private business. In other words, what they determine is on the best long term interest of the organisation as a going concern. The fact the company is listed and has many shareholders (instead of just one) is irrelevant in my view.
.
My feeling is that they cannot do with the cash as if it was a private business.
They have to work with the minority shareholders and are confined by the companies act.
They have no experience of this.
So far they have not been well-advised judging by their use of the SOA which has resulted in hostile feelings amongst some minority shareholders.
Personally I do not feel hostile but I no longer trust the Independent directors and OGOG -voting for Rod to be re-elected may be see to be endorsing a duplicitous director(he is a director on CUE and if he was honest would not have supported the Northington report).
Thanks for the link, very interesting article. I love this bit "Kid said the chances of a discovery in frontier waters were low, with odds of success about one in eight". If that's the case for frontier waters then what is Ironbark with 1 in 20 odds?
Have enjoyed following this thread throughout the takeover attempt as a very new/novice investor I have learnt quite a bit. I've just taken the plunge and bought a small stake in NZO so I can jump on the bus for for the "1 in 20" chance of success :)
Speculation on a Cue thread - if PB-1 comes through the SP could go upwards of 20c.
If that is true, and if the NZX increases by a corresponding market cap for NZO’s share then the SP could lift to 75c- 80c.
Not sure if any of the recent gain to 68c takes into account the possibility of a discovery at Mahato.
https://www.asx.com.au/asxpdf/202001...xk6t56gxcr.pdf
Speak of the Devil. I just got this update.
What the hell is going on with The Operator?
If they really are not sharing information that is required under the agreement with Cue - that is absolutely outrageous. I can’t understand why they would do that and expose themselves to litigation.
I wonder where you saw this, mistaTea? I can't see it on HotCopper. Quite interesting.
Yeah, it looks like something underhand there - the operator have been paid what they wanted, but are still refusing to say what the result of the drill is. Except to say it has been drilled.
The drill was in Indonesia, the operators from Yemen. I hope if it goes to court, that that would be in Australia and not in either of those other 2 countries.
CUE's 6.9% rise today to a record high might suggest there is a good result at PB-1 and someone knows about it. Or it could be pre-Ironbark thrill-of-the-drill. Or both.
By the way, someone here said Ironbark could drill as early as April. I haven't heard that, I'd thought September was the best guess. Can anyone comment on this?
The Takeovers Code states that purchase by associates (I assume that's what you mean by 'surrogates'?) have to be added to the total held.
See p10: https://www.takeovers.govt.nz/assets...ember-2018.pdf
As to forum shills, maybe you could adjust your tin foil hat.
https://www.sharetrader.co.nz/showth...l=1#post785016
This was the post where I saw the speculation of the magnitude of SP increase Cue might experience if PB-1 is successful.
At the time of that posting, 20c would represent a 6c increase in SP - or a market cap of $40ish million. No idea how the poster arrived at that figure, but does not seem ridiculous at all.
$20M of that (our half) would be the equivalent of 12c per share for NZO.
Latest out from CUE ... Melbourne, Australia 10 January 2020: Cue Energy Resources Limited (the Company) advises that though its 100% subsidiary, Cue Mahato Pty Ltd (Cue), it has been informed by the Operator of the Mahato PSC, Texcal Mahato EP Ltd, that the PB-2 well has been drilled.
Now add this into an older ann.-
Melbourne, Australia 21 November 2019: The PB-1 exploration well in the Mahato PSC, Indonesia commenced drilling on 19 November 2019 at 1200 hrs local time. PB-1 is planned as an exploration well to test the PB prospect. It will be to be drilled to a TD of 1750m (5750 ft) m and is expected to take approximately 1 week to drill. The PB prospect is a 3-way dip closed structure, part of the Petapahan thrust/wrench system. The primary objective of the PB-1 well is to test the Early Miocene Bekasap reservoirs which are the producing reservoirs at the nearby Petapahan and Kotabatak fields. The secondary objective is the Middle Miocene Telisa reservoir, one of the producing reservoirs at the Kotabatak oil field. If successful, a logging and testing plan has been prepared for evaluation of the well. A decision on a follow on appraisal well, PB-2, will be taken once the results of PB-1 are reviewed and understood. The Mahato PSC is operated by Texcal Mahato EP Ltd. Cue Mahato Pty Ltd (a 100% subsidiary of Cue Energy Resources Limited) holds 12.5% participating interest.
So IMHO the A-hat operators 'Texcal Mahato"(owned by Sabson muti-billion cap Saudi's) did hit great Oil shows in PB-1 as to why they now have drilled PB-2
This of course is know by some parties which are loading up in CUE shares >>> I can't see how Texcal can withhold info from CUE for much longer >> could well end up in court in Aussie?
https://katadata.co.id/berita/2019/1...-2-blok-mahato
After using Google Translate:
"Texcal Mahato has been piloting the drilling of the PB-1 Mahato Block exploration well . Even so, the company has not yet received conclusive or conclusive test results. Therefore, the company plans to move drilling to PB-2 wells. "The PB-1 well has been tested, but it is not conclusive yet. So, we decided to move first to drill the PB-2 wells in the same wellpad ," said Deputy of the Special Task Force for Upstream Oil and Gas Business Activities ( SKK Migas ) Julius Wiratno to Katadata.co.id , today (12/23).
Julius explained, the current status of the Mahato Block is an exploration block managed by Texcal Mahato. The company is also committed to drilling two exploration wells PB-1 and PB-2. "The commitment of two exploration wells, PB-1 and PB-2. The investment value of two wells is around US $ 7 million," Julius said. (Read: SKK Migas Reveals Oil Findings in the Kuala Pambuang Block )"
So, results from PB-1 were 'inconclusive' according to this write up. Not sure what to make of that.
I get the feeling that Texcal is giving back some of the crap to OGOG through Cue that OGOG gave to the market about the 1 in 20 for ironbark. What I am getting at here is that once you start this funny stuff you never know where it will end or where some form of this twisted thinking will break out next.
Naturally Texcal is right in saying PB-1 is inconclusive and it always will be. The Tue well is also inconclusive and even today you can not say with 100% certainly how much it will produce.
Strange though isn't it that while PB-1 is inconclusive it isn't so all inconclusive that the drilling of PB-2 has to be delayed
Hiding and manipulating information seems to be part of how some companies operate.
It is so good that this forum sources information and debates the limited information these companies choose to feed us.
Digger how long have you been invested in NZOG? Thanks for your wisdom whenever I have sought advice(I have done this for at least 12 years)
https://www.nzherald.co.nz/nz/news/a...ectid=12301929
Here we go! Good old Shane 'The Rangatira' Jones trying to distance himself from the greenies and sidle up to the conservative provincial vote leading up to an election.
Sorry Shaney my boy, you didn't say boo when they banned future offshore oil & gas exploration. You literally stood there and said nothing when Comrade Ardern delivered the 'great news' to NZ.
They should have kaiboshed that ridiculous policy just like they did with the CGT. But no, they didn't and soon we shall see if their relationship with Labour and The Greens will cost them votes.
Well said MT. I can remember that moment all too well. He just stood there and sold us down the toilet. That and some other things they have not said boo about have ruined NZ First's trust for me. I trust they will lose votes and will go as far and say they will not make the 5% threshold come election time.
Followed this thread for a while and thought I might stick my oar in.
Mainly in respect to BP farming into Ironbark and NZOG exposure. Seems like there has been plenty of discussions on what sort of probability of success BP might need to farm in. I can categorically say it is not set at a certain cut off (ie 1 in 2). For example if a prospect that is near existing acreage or infrastructure, they might farm in to a prospect with much lower chance of success. In the case of Ironbark, the development case they may have it tying into NW Shelf JV North Rankine infrastructure built in the mid 80's that is now on low pressure recovery for the last remaining gas. BP is in the NWS JV. I understand the NWS-JV are looking at tolling third party gas through their kit, although as usual the lawyers are doing their best to get the second yacht but it will happen. BP would have interest both ways as tolling party and supplier of gas.
Last time I looked at creaming curves for Carnarvon, I got technical success rate of 22% and ~10% for commercial finds. I figure Ironbark has about that chance.
Personally I like Ironbark and the Carnarvon Basin is a prolific area with about 70% of Australian reserves located off the Nth West coast. Shows are nearby and not ridiculously far from existing infrastructure that has ullage. I love a frontier exploration play and admire Cue tenacity and perseverance with the permit. Just want to flag that best not get too in enthusiastic and if I was valuing Ironbark as part of NZOG I would probably treat it as zero.
Tawhaki and its implications for PEP52717 and PEP55794 will have to wait another day but a success case there is more important to NZOG in my opinion.
NZOG has been in the farmout business for such a long time it is important to not get too caught up in your own marketing hype.
The car has always had one careful lady owner.
Thanks for the comments - great to have a range of perspectives come through. You are right about not getting too excited given the odds of success....though, quite naturally, there is bound to be a certain element of excitement as we approach the date where we spud. The so-called "thrill of the drill".
I can assure you that none of the fellow investors I have had direct conversations with think of Ironbark as a 'sure thing'. Some investors are more bullish than others, sure, but everyone is consciously aware that on a pure statistical probability view...Ironbark is more likely to fail than succeed.
I am not sure where you get the 10% commercial success figure from - and even if I did, it just becomes another pointless figure to argue about. Given the very recent bullish statements from Beach and BP regarding the prospect, I struggle to arrive at 10%. But I could be wrong, and you may know a lot more about the industry than I.
The other part of the equation for the investor is how much he or she paid for their stock. If someone bought in years ago at $1.50...there may be a larger element of praying to all the known gods that this works out so that they don't realise a large loss. If Ironbark fails...unless the prospects of drilling Clipper change dramatically, I think liquidation has to be on the cards.
In my case, I am currently 'on the table' for about 53c/share. So even if Ironbark has high odds of commercial success...let's just say for arguments sake the JV actually believe those odds to be a whopping 30%. That means there is a 70% chance that we will fail.
But that's not the end of the world for me...and hence my strong desire to stick around for the drill. I have bought in at a price that almost gives me a free shot at a truly massive drill. Monish Parbrai calls this wonderful situation "Heads I win, Tails I don't lose - much".
Will OMV or Beach publish drilling progress reports?
Boop boop de do
Marilyn
PS. Drill ship COSLProspector is on on-site and presumably drilling.
https://www.marinetraffic.com/en/ais...COSLPROSPECTOR
Welcome your view but do not share it for many reasons
Both cue and Beach give much higher success rates and BP would not consider drilling a well with only one in 10 chance success.
You quote historic success rates without taking into account new technology and knowledge.
Recent frontier deep water drilling is producing success rates of 1 in 3 .
You give no value to Ironbark after stating a significant success rate(Ironbark is so big that Andrew Jefferies stated at the agm it was worth drilling as a gamble on a 3% success rate).A lot of things we all do in life is a kind of gamble .This is a gamble with odds and reward having to be taken into account .Its a gamble I like and you do not so I suspect you will not be buying NZO (In contrast I am still buying)
You also fail to mention all the options to get the gas to the best markets.OGOG just happen to be experts at converting old oil tankers into offshore production and storage of LPG.
Cue and NZOG quote high success rates cause they are the car salesman. It is there job to be bullish. The investor must way up their statements and be conservative.
Regarding BP and improved technology, 3D seismic has been around since the early 90’s and we have gotten better but it is getting harder and harder to find fields. People have drilled off shore for 70 years in Carnarvon. We drill more and more wells to find less and less resources. What we do find is more expensive to develop and often shorter life span. Commercial success in frontier basins will be around 10% which is fine as the payoff is huge.
Yup rig on station and anchored up.
OMV won’t announce anything, they are sneaking the rig around to try and avoid protesters. They never flagged Gladstone-1 which they drilled before it mob'd to GSB.
Beach may announce the results, if we are lucky it might be weekly.
Tawhaki-1 should be drilled quick if they don't have anything unexpected. Super deep water but a relatively shallow hole from the seafloor.
I am fan of NZOG, they work hard and Kupe would never have been developed without their dogged tenacity.
You all are deeper in the guts but from what I can see Maari is on its last legs and will not produce significant cashflow from here, Jadestone may or may not get operatorship. Either way it needs a large development program (really significant capex) their current production forecast is:
2020 = 1.46 mmbbl
2021 = .98 mmbbl
2022 = .72 mmbbl
2023 = Abandoned
As we have seen from Tui et al super risky being involved in end of life assets.
Kupe is different with 3P gas of 329 PJ, 3P oil of 49.1 mmbbl. Lots of gas and oil left. Should be a good little earner. While deliverability is down and the future will need more interventions and investment it should be long life and still earn some coin.
I have sat on the fence with NZOG with $110mil market cap and ~$100mil in cash it is cheap buying.
They have lots of cash in the bank but a tendency to spend it pretty quick on dry holes ie Kohakutai et al
I am not at buying yet but a little cheaper and I would be in. Hence starting to kick the tyres
agreed the payoff is Huge but we do not know the chance of commercial success .NZOG actually quote a 5% chance of commercial success but say it is a gamble worth taking if only a 3% chance !
Ironbark if successful will most likely be a giant with a long lifespan
My opinion if BP are involved there is a minimum 30% chance of commercial success
My opinion is that they are expecting around the 30% too.
If it was just Cue and NZO quoting high success figures during the farm in process I would be more sceptical.
But the JV is set up now, and there is no need to bullsh1t anymore (if they were fibbing to start with, that is).
The deal is signed, money secured and we are waiting to drill. I can’t see why Beach would be saying their anticipated odds exceed their 1 in 4 or 1 in 3 minimum now unless they actually meant it.
Perhaps I am being naive - but what would they gain at this stage by overstating the odds given the deal is already locked in?
Agreed mistaTea the odds mean nothing now---let the drill bit do the talking.
Bought another lot recently---will be buying more. Just shows how much credit I give the odds of success at 5% but now down to zero.. I have never taken part in a drill with zero chance of success but then the dry wells were exactally that---zero.
Cheers all let get on with the drilling
With the Ironbark drill being scheduled for Q3 2020 - that means they could start drilling anywhere between July - September this year? Most likely at the end of the quarter?
I don't subscribe to Upstream, but it looks like there is a recent article in there that says BP have had to resubmit their Environmental Plan.
https://www.upstreamonline.com/explo...iny/2-1-741857
Anyone on this thread subscribe and can shed some light on what the issue is?
If it starts in September (hopefully no delays), they reckon it could take 70 - 90 days to drill.
With a little luck, Santa will give us a nice Christmas present this year!
MistaTea, from what I can see there is no issue. For the latest at Nopsema have a look at https://consultation.nopsema.gov.au/...division/5084/
This consultation report followed the earlier environmental plan: https://www.nopsema.gov.au/assets/ep...ts/A677874.pdf
Upstream may know something which is not yet public, but not out of the ordinary if you look at Equinor.
There is nothing on Nopsema advising this has to be resubmitted, as has happened with Equinor as an example.
Cue Quarterly Report out:
http://www.cuenrg.com.au/irm/PDF/f2e7554f-6c38-4f80-af3f-1abf0bf6a8dd/QuarterlyReportforPeriodEnded31December2019
Ticking along, although this Mahato dispute is somewhat disconcerting! I don't really care who is right or wrong...I just want them to sort it out so we can find out the results of the drill.
NZO quarterly report is out today.
To me things are tickling along nicely.
Still over $100m in cash-The market does not appear to value anything else so to me Ironbark is a free gamble on finding a trillion dollar plus worth of gas.
More money spent on researching Ironbark and plans to drill later this year with Ocean Apex.
It is going to be really exciting.
Also got an invitation yesterday as MistaTea had suggested might happen which I have accepted and looking forward to later next month.
Agree with your sentiment fish. Nothing much changed, just ticking along while we await the big drill.
I also received an invitation from Alistair. Have agreed to meet with him at the end of Feb and provide my perspective.
I commend them for realising that we are their business partners - and they do actually need to talk to us before making big decisions. However I am sure they will get a range of opinions, so what they make of it all and how it becomes useful to them planning for the future will be interesting.
Personally I am happy to go with the flow so talking to me might end up with me finding out from the horses mouth their intentions.
For instance Barque is only mentioned in passing but a lot has happened which I was unaware about
eg google offshore technologies barque-
an excerpt-SHARE
PROJECT TYPE
Offshore oil and gas field
LOCATION
Canterbury, New Zealand
ANTICIPATED START OF PRODUCTION
2025
RESOURCES
5tcf of gas and light oilExpand
Barque is an undrilled offshore oil and gas prospect located in the Clipper permit (PEP 52717) within the Canterbury Basin, approximately 60km east of Oamaru, offshore New Zealand.
New Zealand Oil & Gas (NZOG) is the operator, holding a 50% stake in the Clipper permit, while Beach Energy holds the remaining interest.
The joint venture completed an economic impact study (EIS) for the prospect in 2017, with co-funding from the New Zealand Trade & Enterprise. The EIS predicted that the Barque prospect has a resource base of more than five trillion cubic feet (tcf) of gas and light oil.
NZOG is currently in discussions with potential farm-in partners for the development of the field. The Energy and Resources Minister of New Zealand has allowed the JV to determine a well commitment for the prospect by April 2022, from an earlier deadline of April 2019.
Barque prospect location and geology
The Barque prospect is located in 800m of water, approximately 60km from the Galleon-1 well, which was drilled in 1985. The Clipper permit extends over an area of 2,601km².
The prospect is identified as a large cretaceous structural trap of approximately 150km², with target formations located between 2,500m and 3,000m below mean sea level.
Appraisal and development plans for the Barque prospect
The joint venture of NZOG and Beach completed reprocessing of 1,250km of vintage 2D seismic data in 2013 and acquired approximately 650km² of high-quality 3D seismic data.
The seismic data identified three target reservoirs in the prospect, namely Barque Fm (primary), Herbert Sandstone and Intra Paleogene 3.
Two scenarios have been identified for the development of the field, offshore and gas-to-shore. The development plans will be finalised upon drilling the discovery well.
Barque prospect’s offshore development scenario
The offshore scenario calls for the extraction of fluids through ten production wells, as well as processing on an offshore vessel for direct export to markets. Condensate from the fluids will be separated, while the gas is proposed to be re-injected into the reservoir.
Offshore operations, expected to be started in 2025, would extract approximately 460 million metric barrels of oil (Mmbo) through the field’s life of 35 years. Onshore activities are limited to servicing and maintenance under the scenario, which also proposes to extract the recycled gas in future
Yeah they want to gather the views of minority shareholders to factor it in to any decisions they make on the future. A consensus will not be achievable though - there will be a wide range of views from minority holders.
Views from liquidating the company in the scenario where Ironbark fails to taking the remaining cash and pouring it into more exploration.
Price will not come into the discussion as they are not looking to attempt another takeover. That may change in the future depending on the results from Ironbark, but I believe them when they say there will be no more offers.
personally I would be against liquidation if Ironbark fails-ogog has been around NZ for a long-time and would be in an enviable position to bid for those assets that they have inside knowledge .I feel NZO have not been entirely truthful about Ironbark and the prospects for Barque- OGOG could easily know potential buyers for a share of Barque.
Beach would be a good partner for Barque and we have the cash.
Barque if successful would produce valuable condensate with the gas re-injected and saved for later extraction when pries are likely better.Fossil fuel is finite and the population is growing.Sooner or later we will need a transition fuel from coal and oil and gas will fill the need.
.Barque is a big prospect and predicted to produce for 30 years-maybe a lot more .
Fish, experts assess that currently New Zealand has five or six years gas supply left. That makes the discovery of, and production from, new gas fields quite urgent. Part of that problem is that NZOG & Beach need to find a third JV partner, and OGOG haven't been able to assist as the majors are shrinking their geographical areas of operation away from pioneer exploration.
Thanks wiremu-it is more urgent than I had thought .
It is imperative that we get on with drilling Barque and do not let OGOG get NZO for a song.In that case I fear no gas will end up on NZ shores-at least not at a reasonable price.
I do not buy into the necessity for a 3rd partner and the majors not wanting to come here.
The joint venture has been progressing on Barque and receiving state aid .It is highly prospective and probably will be drilled
I'd like to ask some of you more knowledgeable investers a question relating to Cue and NZO.. Some of you have been suggesting that the two companies merge. I have just recently had a dividend from TAP on the AX board. As I am not and AUS with an AUS address I lose 5800 dollars on imputation credits. So if such a merger were to take place would not all NZO holders with an address outside AUS lose all imputation credits. ??? The only way out that I can see is if NZO used up all its tax credits before such a merger. Note I have assumed here that such a merger would be Aus based as no one wants to be NZ based with the greens being the tail that wags the dog.
Digger this is only one of many problems I can see with a merger.
The worse for me is if it becomes asx only we lose the protection that the companies act 1993 gives to minority shareholders.I have no experience of australian company law
I find it strange that OGOG have not tried to increase their shareholding to 75% to avoid some of the mines that could explode under their feet.
Thought I should follow up on Tawhaki-1 that is currently being drilled down south.
NZOG has been applying for extensions on their permit obligations based on the geological de-risking that will occur if Tawhaki-1 discovers something. This is fair enough in my opinion and the least the govt should do after doing the dirty on NZ exploration.
Tawhaki stats are:
470 km2 structural trap, with 300m thick reservoir section.
Estimated cost is a bit less than $100 million, water depth ~1300m,
Gross mean recoverable oil 1 Bbbl. They have an oil AVO response so suspect they are desperately hoping they don’t find gas. Their commercial cut off is about 250 mmbbl
Suspect we should get the results in February.
Why does Tawhaki-1 matter to NZOG. While wells in Canterbury/GSB have a pretty high success rate with decent flows (from memory 4 from 12 wells had flows to surface) the basins are relatively shallow and may lack maturity, there are some thoughts that as many of the structures are inversion and formed later than the main charge event they may have been under filled. Barque and Toroa are pretty much self sourcing from nearby but require charge at the right time. A fully charged structure at Tawhaki-1 would significantly derisk sub basins to the north and south.
I think Tawhaki-1 is a free carry for NZOG. Both permits will be in hot acerage if OMV find anything.
Now in saying that Barque is a pretty average prospect. First identified in follow up work to BP, Shell, Todd drilling of Clipper-1 in the mid 80's it is likely to have a volcanic intrusion associated with the structure and therefore significant risks of elevated Co2 and reservoir alteration. It is near or on the shelf break and 40-50km from the coast. It will need to find formidable volumes to be anywhere near commercial.
Remember the history of the prospect:
I got lost trying to work it out but in the last 35 years of us knowing Barque the following companies have looked over Canterbury and decided not to drill Barque
SBPT (mid 80's)
Pacrim (1998)
Origin (Mid 2000's)
AWE (2010's)
Anadarko (2010's)
Tap Oil (mid 2000's)
Austral Pacific (mid 2000's)
Anschutz (2000)
Maxus Energy Corp (1991)
Lots of these companies even held the acreage that Barque was under and still decided not to drill. In a success at Tawhaki-1 exploration will likely move south not north to Barque and I am pretty confident that if Tawhaki-1 fails NZOG will never farm out Toroa and Barque.
I love a good drill an thrill but my experience tells me there is no margin of safety in the often zero sum game of exploration. I have run the figures and think anything under 60c I will start buying.
Hope something there may be helpful.
We have a lot more than 5-6 years gas left. That is about how much 'cheap' gas left. Methanex uses maybe 40% of all gas produced in NZ. Price increases enough and they switch off and bang now we have 15 years supply.
It is actually great news for Kupe, they have been stripping liquids which has dominated revenue. Hopefully late in field life they will get some decent money for the gas as well.
Gas prices are already increasing and the spot market is tightening. I understand Contact has struggled to get all the gas they want for TCC. Pohokura outages are spiking electricity prices. Very little flexibility on the system and it will only get worse.
Thanks Waikaka for the last 2 informative posts.
Its good to hear that methanex will stop using our gas if prices increase.And futures for gas are nearly doubling in the next 10 years
To stop burning coal for electricity we need to use our gas here.
Have you seen the economic study funded partly by NZ trade and Industry for Barque?
Great comments Waikaka, thank you for sharing. We will all be watching with interest to see how OMV get on. If OMV don't find anything that would almost certainly be the end of the story so far as Barque and Toroa are concerned - it would be interesting to see how philosophical the curreny government is if a bunch of high potential permits are handed back!
For me your last comment is key from an investor perspective. Drilling is high risk - high reward. Though the results of drilling are largely binary - you either find commercially viable amounts of hydrocarbons or you don't - from a pure probability perspective Ironbark is unlikely to succeed. Barque is unlikely to succeed. Toroa is unlikely to succeed. Even if each of the permits had a whopping 30% chance of commercial success, that is still a 70% chance of failure for each one.
I am not really thinking too much about the GSB right now. It is all about Ironbark for me. And the average price I paid minus dividends received means that I am 'on the table' at such a low price that I almost can't lose. Ironbark is almost a freebie.
Either Ironbark will make me very rich, or not and I will leave with 90 - 95% of the capital I invested by my reckoning.
Heads I win - tails I don't lose - much!
If sucessful Ironbark will be worth Trillions .A mere 50million for nzo to drill barque is peanuts in comparison .Regardless of omv success/Ironbark I feel NZ needs Barque to be drilled to give us a chance of energy independence for the rest of this century .I feel Barque will be much riskier than Ironbark with BP and Beach very optimistic and successful
I am not an engineer or a economist so cant really helpfully comment on the report.
What I can say is that Maui was a bit over 4Tcf, shallower water than Barque, closer to markets, better met ocean conditions and to get that developed the govt needed to:
NGC contracted the gas with a guaranteed take or pay
MWD built the Maui pipeline
NZED built the thermal plants to help with demand (Stratford and Huntly)
Think big built Motinui (synfuels) and methanol plant at Waitara as well as ammonia/urea at Kapuni to help with demand
and the biggest of all Petrocorp stepped in for 50% of Maui.
All of that was needed to convince SBPT to even develop Maui. All developments since then have leveraged off existing infrastructure.
What I want to reiterate by talking about Maui development is that it is easy to forget the huge amount of govt help that was needed to get a isolated major gas condensate field like Maui developed.
Can you see the govt taking a similar hands-on role in the future?
If not it is likely any discovery will be stranded for the foreseeable. I suspect that is why OMV is hoping for oil, FPSO development off shore will be far cheaper, easier to FID and simpler to consent than doing a gas development.
Fully agree and with production anticipated to start 2025 there are 2 choices and pipeline would be so problematic-you also need consents and possible may get Greenpeace opposition
FPSO is the way to go.
OGOG have what it takes to do this-and it may even have been a reason for buying into NZO.
I guess as they only have a 70% shareholding they will have to put the contract to rent the FPSO out for tender unless they sometime in the next 4 years if they make another takeover offer.
If ironbark is successful they could never succeed with such an offer.
If Ironbark is unsuccessful they may have to liquidate the company and hope to buy the parts of NZO they want or make another takeover offer-but will the minority share holders sell after the last offer was not fair and reasonable and involved stating Ironbark has only a one in twenty chance of commercial success ?
Relevant to the current thread on the need for FPSOs, pipelines, and consenting is the article entitled "Why Global LNG Growth Needs Both Floating Liquefaction and Regas Platforms" in the Mitsubishi Oil & Gas website at https://oilandgas.mhi.com/ The stories section is also interesting.
And for a global overview on energy going forward: https://www.mckinsey.com/industries/...rspective-2019
https://www.nzx.com/announcements/348111
Contact secures their gas supply from OMV out to 2025.
Their statement highlights the need for NZ to discover more gas to secure a reliable and affordable energy source as cleaner alternative given the intermittent nature of hydro and wind.
Another informative and relevant artlcle - how oil & gas companies can decarbonise.
https://www.mckinsey.com/industries/...6-67cf27b2375a
Perhaps someone with a legal mind can explain yesterday's decision from the NZX to grant NZO a waiver from Rule 5.2.1.
Its set out in the annoucement:
Reasons
6. In coming to the decision to redocument the waiver set out in paragraph 1
above, NZXR has taken into consideration the following:
(a) The policy underlying Rule 5.2.1 is to ensure that Related Parties do not
exercise undue influence on an Issuer's decision to enter into a Material
Transaction, or in order to reach a favourable outcome or a transfer of value
to the Related Party in respect of a transaction;
(b) In this instance, the status of NZO and Beach as Related Parties arises
by virtue of NZO being party to unincorporated joint venture arrangements to
which Beach is also a party, or potential party. In this regard, the
exercise of the Call Option and entry into JOA II does not offend the policy
behind Rule 5.2.1;
(c) NZXR is satisfied that the relationship between NZO and Beach has not
influenced the decision to enter into the 2018 Transactions (which includes
the Call Option and JOA II) as:
(i) the involvement of an independent party who holds or will hold a
significant stake in the Ironbark permits, and who has or will have
operatorship of those permits, means there is a commercial check on any
behaviour by NZO which may offend the policy behind Rule 5.2.1;
(ii) NZO has not changed, and has no ability to change, the terms of the JOAs
to favour Beach ahead of the other joint venture participants; and
(iii) the directors of NZO, who are not also directors of Beach, have
previously certified that they believe the terms of the 2018 Transactions
represent fair value and are fair and reasonable to NZO and its shareholders;
(d) NZXR accepts that the existing relationships between NZO and Beach
(through the joint ventures) are unlikely to influence the decision of the
board of NZO to exercise the Call Option and enter into JOA II;
(e) NZXR takes comfort from the certification granted by the NZO directors
who are not also directors of Beach, dated 7 November 2018, that:
(i) they believe the terms of the 2018 Transactions were negotiated, agreed
and were to be entered into on an arm's length and commercial basis;
(ii) they believe the terms of the 2018 Transactions represented fair value
and were fair and reasonable to NZO and its shareholders; and
(iii) Beach did not influence the final decision of NZO's board to enter into
the 2018 Transactions;
(f) This provides adequate assurance and protection to shareholders of NZO;
and
(g) There is precedent for this decision.
Beach Energy HY results out: https://www.beachenergy.com.au/asx/
Looks like they are anticipating Ironbark drilling to begin in December 2020 now.
Ironbark – Carnarvon Basin (Beach 21% interest)
• Preparations for drilling continuing with operator, BP
• Ocean Apex rig contracted and long lead items ordered
• Drilling scheduled to commence in December 2020 quarter
• Ironbark is a large gas prospect within tie-back distance to NWS project. Targeting deeper Mungaroo reservoirs; the primary reservoirs at Gorgon
• Beach share of drilling cost ~$35 million
They have an infographic which seems to show Ironbark drilling beginning at some point in December and going through to March/April.
Damn, I was hoping they would start in September so that Santa might bring us an extra special Xmas pressie!
Thanks Blackcap.
Still might be an Xmas pressie.Price normally rises when drilling starts.
I am pretty sure Andrew Jefferies said at the AGM that success at Ironbark was so big that it was worth drilling if there was only a 3% chance success.
With beach suggesting 33% and Cue 25% and srk suggesting a preferred value around 100 times that of Northington( a paltry 5% if anyone could possibly believe-and their maths is faulty as using their invalid formula it is over 7%) the sp could rise significantly.
Did anyone else hear that giveaway clue to the undervaluation of Ironbark by Andrew ?
You never know with drilling schedules but the Diamond offshore Feb 10 fleet status indicates that the Ocean Apex is with Woodside Jan - Oct 2020 and then it goes to BP Oct 2020 to Jan 2021 .
http://www.diamondoffshore.com/Docum...leetStatus.pdf
Just about always delays but I would guess front end of the quarter.
and a submission to NOPSEMA on 10 Dec 2019, BP say:
"Drilling activities are planned to commence in Q3 of 2020, although depending on MODU availability, may commence between Q2 of 2020 and Q2 2021. Drilling activities are expected to take approximately 90-100 days (excluding weather and operational delays)."
https://info.nopsema.gov.au/environm...82/show_public
Definitely covering all the bases with the regulator there.
May well see some 'price action' towards the end of the year as drilling becomes imminent.
Largely meaningless to me as I am only interested in the drillin results.
Although, if the SP were to increase meaningfully from where it is now I suppose it does provide the opportunity to liquidate a small % of my shares, further reducing my already small downside should Ironbark fail.
It is my feeling that the market has not factored in the value of Ironbark due to misleading information by NZO published for the takeover by OGOG.Imminent drilling may attract investors to research Ironbark for its true or preferred value which pre-drill is around $350 million(?around 50 nz cents per share) according to SRK.
Just wondered if any news about this drill ?
OGOG were quite excited about Barque when they bought a majority shareholding in NZO
There again so much has changed since then-not least the Northington valuation at that time-as far as ZETA offer went-
NZOG independent directors recommended shareholders reject the offer after an independent valuation by Northington Partners valued the company at 78 cents-to-93 cents a share.
I wonder why it has all changed?
Are the Independent directors really independent or is OGOG pulling the strings?
So that’s a NO for Tawhaki...
No hydrocarbon shows, pluged and abandoned.
https://www.beachenergy.com.au/asx/
Boop boop de do
Marilyn
Canterbury Basin and GSB are close cousins. Both formed around the same time as failed rift systems.
For all intents they are the same petroleum system, reservoirs and source rocks are basically the same just with slightly different tectonic timing. Some sub-basins in the GSB are significantly deeper and presumable more mature which in fact makes it even worse for Barque.
NZOG Toroa permit is unfortunately downgraded to moose pasture and Barque is dead in the water.
It was worth getting work programme deadline extensions to keep in the area, especially while some one else is going to drill but with the result of Tawahaki-1 drilling NZOG should just relinquish them all before they waste more money.
Yeah it is also my understanding that the two areas are geologically connected. Barque was always going to take a fair amount of convincing to get partners to farm in.
Then the government banned future offshore exploration and that was probably a mortal blow for the permit. Will have to wait and see what OMV do next, but with Tawhaki not resulting in a discovery - I reckon that is the final nail in the coffin for Barque.
For some time now Barque has been in the back of my mind - since the likelihood of it ever actually been drilled is really low. Which is why when I was working out what I would consider a 'fair price' for the SoA - I ascribed $0 for Barque.
The only thing interesting about NZOG is unchanged by the Tawhaki result - Ironbark. If it comes through then that will be absolutely fantastic. And look forward to the opportunity to participate in a world class drill.
If Ironbark does not come through then NZOG really has nothing going for it. It isn't even domiciled in a country that is friendly to O&G explorers! So the company's viability as a listed company moving forward in that scenario is doubtful in my view.
We are all going to have different opinions about this and I respect yours.
From my point of view-and I do take advice and listen to all.My unbiased expert(overseas) has been further researching both Ironbark and Barque and will now take this into account.
Barque is similar geology to Taranaki.It may represent a massive wet gas reservoir.We know it has a kitchen-2 out of 6 adjacent drills found hydrocarbons.The question really is if the hydrocarbons have been trapped.It has multiple targets.Only a drill will find out so for the future of NZ I want it drilled-and I do not care about the risk-it is so big that its probably worth drllling if it only has a 5%chance success.Remember Andrew Jefferies at the AGM said Ironbark was worth drilling if only a 3% chance success.
Gas is the transition fuel away from coal.Nz has to stop burning coal and change to cleaner fuel.
Thanks for that link-its good journalism-brief and covers 2 opposing views.
The mislead Greenies saying its good news as we do not need more fossil fuel .Hypocrites that do not know the difference between coal and gas.
Andrew whiley who says they will be back-its just a matter of drilling the right hole in the right place at the right time.
NZO are lucky having OGOG leading them with the capability to do this
And all the while Japan is expanding its coal operated generators to create more energy in the wake of Fukushima. Demand for coal and oil (globally) will continue unabated in the coming 30 years.
Cue update on Mahato: https://www.asx.com.au/asxpdf/20200225/pdf/44ff76pkyrbkt5.pdf
I just want to know what the hell is going on here.
Clearly a discovery has been made - but what has happened that Texcal think they can just cut their JV partner out? They must have some reasoning but Christ only knows what it is.
Anyone have any other sources of info on this or good old scuttlebutt?
Surely its pretty straight forward like the ann. below back in DEC....
Melbourne, Australia 17 December 2019: Cue Energy Resources Limited (CUE or Company) advises that the claimed cash call from the Operator of the Mahato PSC, Texcal Mahato EP Ltd, which was the subject of the disputed default notice referred to in the ASX announcement of 10th Dec 2019, has been paid by Cue. Cue is not receiving information from the Operator as required under the Joint Operating Agreement and is evaluating all available options to address this and other breaches under this agreement.
-Even though CUE disputed the extra cash call from 'Texcal" they still paid the bribe !! (or didn't they ???)
why ask for extra funds then once received still not uphold the J/V ? ... and now state the J/V is void ... what utter BS!!! scumbag sand jockeys
From what I can tell its just a spat.Little more than can be expected doing business in Indonesia.There are always 2 sides to a story and clearly Cue are not going to tell us how this has come about.Look at the directors on Cue.Look at how they have behaved with NZO and the scheme of arrangement.Its too early to make judgments until we hear the truth as seen by both sides
It's true that no matter how flat you make a pancake - it always has two sides!
Let's just hope Cue haven't screwed the pooch on this one and that whatever the issue is can be resolved.
Even if Cue were in the wrong, they have since paid up the money Texcal said was owed. Seems incredible that Texcal now seem to be progressing as if Cue was never a JV partner. The fact that there has been a discovery makes me suspicious too. If the same thing happened, but the hole was dry, I am 100% sure Texcal would still treat Cue as a JV partner after the disputed funds were paid! To help with the plugging and abandonment costs!
https://www.nbr.co.nz/story/proposed...rint-says-nzog
Latest members bill submitted by Green's Chloe Schwarbrick would force all public funds to divest from companies directly involved in the mining and production of oil & gas.
If it gets through, that would mean our largest minority holder (who played a key role ib stopping the SoA) will be forced to dump their shares.
ACC would have to forgo the potentially large Ironbark upside, and what will the policy achieve in terms of emission reductions? Either nothing or an increase in emissions from a reduction in gas supply.
Can we have the election already? These current lot have got to go.
The likelihood of it ever becoming law is not the issue. The issue is that there is this constant push since the last election to make it harder and harder for the O&G industry.
It is already an unfavourable environment after the offshore ban of future permits. Just by submitting a members bill with the latest crazy idea (whether it ever becomes law or not) adds to the whole notion that NZ is closed for business to would-be explorers.