Heres the answer for the meantime,
https://www.directbroking.co.nz/Dire...spx?id=1957446
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Heres the answer for the meantime,
https://www.directbroking.co.nz/Dire...spx?id=1957446
hAHAHAHa, awesome:
Quote:
NZO
30/05/2008
GENERAL
REL: 1036 HRS New Zealand Oil and Gas Limited
GENERAL: NZO: Tui reserves assessment still underway
Having become aware of an Australian news report which speculated on a Tui
reserves upgrade, New Zealand Oil & Gas Ltd advises that at this time the
proven and probable reserves (2P) for the Tui Area Oil Fields are 47 million
barrels and a further reserves reassessment of the Tui is still to be
completed.
The 2P reserves were increased to 47 million barrels on 21 May 2008, as a
result of an extension of the charter for the Floating Production Storage and
Offloading (FPSO) vessel, "Umuroa".
The field operator, AWE, on behalf of the joint venture, is continuing to
review the Tui reserves. This review was initiated in March because of the
continued strong production performance of the reservoirs.
An announcement will follow the completion and consideration by the joint
venture of the review. At this stage, NZOG expects that this will be
completed by around the end of June 2008.
ENDS
I dont know if anyone has noticed...but NZO is the focus share for the National Bank Share Trading. Now its getting attention....
Good case for selling heads and buying options at current prices.
Here Machine, I know its long...but a good assessment.
Quote:
NZX - New Zealand Oil & Gas (NZO.NZ) `Hitting the Sweet Spot`
Recent Share Price: NZ$1.63
Target Share Price: NZ$2.00
Market Capitalisation: NZ$0.435b
New Zealand Oil & Gas (‘NZO’) listed on the NZX in 1981. The company was established to purchase permits for the exploration of oil and gas in offshore Taranaki. The company later extended its exploration activities to Australia through a 58% interest in Pan Pacific Petroleum. In December 2001 NZO distributed that interest to its shareholders via a scheme of arrangement. In May last year NZO reduced its interest in Pike River Coal to approximately 31% as a result of the IPO and the introduction of two Indian coke manufacturers as major shareholders. NZO had obtained its Pike River coal interests when it merged with Oil Fields NL in 1988.
NZO’s interests are currently centred on the Tui Area oil field, the Kupe gas field development, the Pike River Coal project and the continued exploration for oil in offshore Taranaki.
The Tui Area oil field project is located in the offshore Taranaki Basin some 50km off the coast. NZO has a 12.5% interest in the oil field. The operator is ASX listed Australian Worldwide Exploration (‘AWE’) which has a 42.5% interest in the project. Pan Pacific Petroleum (NZX and ASX listed) has a 10% interest. Production commenced from the field in July 2007. Capital expenditure to bring the field into production totalled US$274.4m (c/f US$240m originally estimated) and NZO’s share was US$34.5m, which was funded by both debt and additional equity. This was paid back from the cash flow from the first four months of production from the field. Daily production at 50,000 barrels per day was initially planned with a rapid decline in production expected thereafter due to ‘water coning’. The field continues to perform ahead of modelled expectations and is reported to continuing to produce at over 40,000 barrels per day. For the current FY ( i.e. the year ended 30 June 08) Tui is predicted to produce 13m barrels (NZO share 1.625m barrels) but we think 13.9m barrels are more likely (NZO share 1.737m barrels). For FY09 we predict NZO’s share of Tui production at 0.850m barrels.
Tui is predicted to have a relatively short life based on 2P (i.e. proven and probable) reserves of 45m barrels (the reserves are currently under review by AWE and the results are due to be announced before year end). Although the flow rate will decrease due to ‘water coning’ and as the field empties , production from the field should nonetheless continue until 2016.
We forecast NZO to record EBITDA of $167.9m from its 12.5% share of Tui in FY08 (up from a recent forecast of $141m ) declining to $118.3m in FY09 (an upwards revision from $37m under earlier lower oil production and price assumptions) and staying at around $118m in FY10 (compared with $88m earlier forecast). Our latest oil price estimates have the price of oil averaging US$96 a barrel over FY08, US$120 a barrel over FY09 and US$112.50 a barrel over FY10. Our previous forecast had oil averaging US$90 a barrel over the forecast period. We value NZO’s 12.5% interest in Tui at $273m or $1.05 per ordinary share currently on issue based on DCF methodology.
NZO has a 15% interest in the Kupe field which is located 35km offshore Taranaki and is in the same general area as the Maui field. It was discovered by NZO in 1986. Origin Energy is the operator and has a 50% interest. The Kupe Central Field Area has 2P reserves of 254 petajoules of gas, 14.7m of light oil/condensate and 1.1m tonnes of LPG. The field is scheduled to commence production in mid-2009 at an initial output rate of 20 petajoules pa, 5,271 light oil per day and 250 tonnes per day of LPG. The cost to bring the field into production is currently estimated to exceed NZ$1bn. NZO has entered into a senior debt facility for $125m with Westpac to fund its effective share of the capital cost. Production is expected to run for a period of 19 years. NZO will have an effective direct share in the sale of 1.0m barrels of oil equivalent in both 2010 and 2011, declining just modestly per annum thereafter. We estimate NZO to record EBITDA of $57m from Kupe in FY10, rising to $60m in FY11 and falling slightly to around $58m in FY12. We value NZO’s 12.5% share of Kupe at $185.5m or 71c per current NZO share on a DCFbasis.
NZO has exploration prospects located in offshore Taranaki. They are within the permit areas that contain both Tui and Kupe. Drilling of the Momoho well in the Kupe permit will commence later this Subject to the attached disclaimer 2 month. We understand that the Momoho exploration well will cost NZO about $8m or 3 cents per share. We have assessed Momoho as having a 15% chance of success and, therefore, have placed a value of 5 cents per share on this prospect, net of costs.
NZO owns 30.6% of NZX listed Pike River Coal (‘PRC’). The IPO in July last year saw new equity amounting to 42.5% of the company’s capital raised from the market. In March this year PRC raised a further NZ$60m via a 1:4 rights issue at 90c and a US$30mn convertible notes issue to Liberty Harbor (a US investment fund). NZO took up its rights entitlement in full and PRC’s coal mine development is now 100% equity funded. The Pike River coalfield, which is located 46kms from Greymouth, is NZ’s largest known deposit of ultra high fluidity and low ash coking coal with an estimated resource of 17.6m tonnes. The coal seam is expected to be intercepted in July this year and production to commence thereafter. For the year ended 30 June 2009, 200,000 tonnes are expected to be produced. For subsequent FYs annual production is forecast to average 1m tonnes. 70% of the first 3 years production has been contracted to be sold to two India coking coal manufacturers and to Nippon Steel of Japan. The two Indian companies own a combined 21% of the company.
PRC will sell all of its coal at the prevailing market price. The price of coking coal has soared over the past year. In July last year the price was US$100 a tonne. Today the market price is about US$300 a tonne. We expect PRC to post an initial profit of $25m in FY09 before it jumps to $92m in FY10 as production increases to around 1m tonnes per annum . NZO’s 30.6% interest in PRC is presently worth $144m or 55c per current NZO share based on the current market price. The current PRC market price of $1.71 is a little above our target price of $1.55 and hence our valuation of the NZO interest of $130m or 50c per current NZO share.
Putting the estimated values of NZO’s interests together and after deducting capitalised overheads as well as diluting for the listed options exercisable at $1.50 per share on 30 June this year, we derive a value of $2.00 per fully diluted NZO share. We target NZO shares at $2.00 in 12 months time.
NZO currently has 138.5m options on issue listed on the NZX which, as noted above, expire on 30 June 2008 with an exercise price of NZ$1.50 (code: NZOOD). The options currently trade at just under 13c. The exercise of the options could provide the company with an equity injection of up to NZ$208m at a time when funds are not required to support current operations. The company has signalled that it is looking for growth and we anticipate that NZO will utilise the additional equity funding (and strong Tui cash flows) to pursue a number of investment options open to it viz, exploration opportunities within the existing permits; ‘farming’ into permits held by other companies; new exploration permits; asset purchases and, finally, corporate acquisitions . We think the company will use the option proceeds for a mixture of these potential opportunities.
The exercise of the options in full would increase NZO’s market capitalisation by approximately 50% to $625m. NZO’s weighting in the NZX50 Index would increase to about 1.5% (the same weighting as Fisher & Paykel Appliances). Liquidity would be improved with 392m shares on issue. Funding of the exercise price may cause some ‘digestion’ problems leading up to exercise date. The options represent an alternative means of entry to the shares.
We expect NZO to report earnings per share of 26.3c this FY and 24.5c in FY09 (after diluting for the options). Although the shares have run up strongly helped by the soaring international price of oil, they are lowly rated relative to projected earnings (FY08 PE 6.2x and 6.7x FY09 earnings ). NZO is now profitable and declaring dividends. For this FY we expect a dividend of 5c fully imputed (providing a gross dividend yield of 4.6% at the current market price) and for FY09 3c per share also fully imputed.
There should be some weakness in NZO coming to the option expiring end of June. It is a big capital raising compare to the market cap.
I am sure there are some big boys coming to play. Yes your right in normal circumstances we will see constant selling pressure from the options where some leave it too late. In saying that, i expect a couple of days of buying pressure as certain info gets released to the market. eg. tui upgrade (although somewhat already factered into) an the potential and strong likelyhood of success at mohohohoho.
Risky time to be a trader in options at present. arggg.. the risk v the reward.. im loving it