ODN and VPE would be a good buy.
ODN market cap only 8 million (AU), and they are the biggest shareholders of VPE.
VPE market cap 74 million (AU) - although the options are a complication.
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ODN and VPE would be a good buy.
ODN market cap only 8 million (AU), and they are the biggest shareholders of VPE.
VPE market cap 74 million (AU) - although the options are a complication.
I am anti buyouts for the sake of it or just because your company is awash of money. Any decision to buy has to be based the value its worth to the purchaser. Im not so sure if nzo have many suitable options.
My preference would be some farm-ins on what nzo see as suitable acreage for exploration.
Hmmm couldn't seem to find it. Went here :- http://www.radionz.co.nz/audio
EDIT : well found it, it's just not up for downloading yet
Is this it?
http://www.radionz.co.nz/national/programmes/sunday
Still not up for downloads :( (maybe due to copyright issues)
This is though:
http://www.radionz.co.nz/audio/natio...hart__peak_oil
I thought that interview was a non-event. One guy waffled on about the definition of peak oil....in an academic fashion. They did not address the impact of increasing demand from China, India, etc.
Chris Laidlaw did not have enough nous to ask the hard, or even the obvious questions.
There is more information and debate on Sharetrader than there was on that programme.
Kim Hill (Saturday Morning) also had a very good interview with a Kiwi geologist who seemed to know his stuff and gave some pretty daunting figures to digest. The fact that Chris Laidlaw also had an interview on the same Peak Oil subject, means the issue sure is getting some attention. Let's hope it resonates at the NZX next week.
Malcolm, I know you wont mind if I correct you.
RESOURCE, not commodity.
The countdown to June 30th continues. Fascinating eh?
I know an Energy Guru in London managing a huge oil portfolio. He is absolutely long on oil.
I met him last October and he took me to his 'ranch' in Ibeza. Close to Richard Branston's mansion. Now that was an unbelievable experience that I wont go into.lol
When I first met him in London I didnt let on I knew much about oil. He took me into his trading room and after about half an hour I asked him if he had met Matt Simmons.
His reply was an all time classic.
" Yeah took him out for dinner last week. I rather think it affected his speech the next day!"
As I said this guy is long on oil and apparently wants to ring me 2moro to get into NZO before the options run out. Doubt if he will but if he does expect a few shares to be traded this week.
Abu Dhabi is now looking to increase its oil production capacity and develop new gas fields, at the same time as maintaining output at its existing fields. In order to manage these resources in the most efficient way possible, and to potentially locate new deposits, the country will have to make use of more sophisticated versions of seismic survey, in which waves of sound are directed into the ground and measured to detect the presence of oil.
Now that is a new one. I remember being told by NZO geologist that the presence of oil could not be detected [YET] only a structure to hopefull contain it. This tech things is moving on.
weather window looking good for next 2 days to shift the ensco 107 jack up - if not already shifted on friday before the big blow.
so expect news from origin once momoho spudded and be interesting what they say -
benchmarked against
the origin presentation of 100 bcf dry gas compared to nzo more upbet at 200bcf equivelent [including liquids]
on cro00wn minerals site the example drill data is for kupe 4 or 5, forget which, have previously posted the link and makes very interesting reading
momoho is going to be huge and comes with the discounted tax in event of a discovery.
[or for the discovery may be a better choice of words]
nzo recent investor presentation shows continuity of the farewell sands from kupe 4 to kupe 5 and drilling momoho both sides of a fault covers all basis.
bring it on
M
M
The ENSCO left the Pohokura site Saturday for Nelson? to do some repair/mods before the Maari drills.
ENSCO 107 looked like it was going to move last evening ( Sun) ...flat calm and with several boats around it so I would only expect to see the Well head platform sitting there this moring. ;)
Oiler
Hopefully that 40,700 that went through at 147.7, as an early trade, is not an indication of things to come today.
thanks oiler
you must have quite a view from your back window
M
out of top 6 gainers on nzx this morning, we have 4: nzo twins, ppp & prc.
oil and coal.
the options in particulaer are backin favour.
lets hope it keeps up all day / week
asx closed today so nzx is on it's own.
M
About a week ago Fish posted this.Anyone following it would be looking at 100% on investment,maybe 200% by week end.
Actually fish what i was looking for was your posting about margin lending from ASB. Can you run that one past me again as i did not find it.There is a lot of talking on this site and whatever you have said is now many pages ago. Thanks.
Digger,
With margin lending there is no need to sell options-far better to hold on and convert on 30th june as on this thread we all know there is a high probability nzo is going to go ballistic once the options are behind us .
Margin lending is described on the asb website .
It works like this - you transfer your shares to an asb nominee company as security -they then allow you to borrow a percentage of the value of those shares-with nzo its 50%-and charge you interest at 10.59 % pa on the outstanding balance of the loan
eg say you have 100000 head shares and 50000 options . Head shares trading at 160 cents and options 10cents
Transfer those head shares to asb nominees -your margin lending limit is 160 times 50% times 100000=$80000
use $75000 to convert options
If you borrow that money for 1 year total interest =$8000 approx
If the share doubles in value in 12 months you make approx $75000 minus 5000 mius 8000 plus any dividends
I havnt done this before but am currently arranging it because its too big an opportunity to miss -probably the financial opportunity of a lifetime .
Thank fish,will look into it as while i am streached building a house and with another i can not currently sell the opportunity with NZO is just tooooo good. Mark my word,NZO has changed and i can not see another opportunity in the next 5 years as good as this option conversion. The company now have the money so there is no longer a need to further dilute the company. It is now or never for the big boys.After this it is only the open market and any volumn there will see a rapid SP rise.
As far as I can work out today is the first day that NZO has theoretically cracked the $1M mark... based on:
Tapis at 142, Exchange rate at 0.77, BBL per day 44000, Total $8,114,286
NZO share $1,014,286
Pop those corks...!!!
Hi Malcolm,
Just think of it this way. The NZO train leaves the station on June 27th and will be up to full speed shortly thereafter. Until then everyone has a beautiful window of opportunity to pick up FIRST CLASS TICKETS AT THROW AWAY PRICES.
The PRC train awaits first coal.
1,337,909 options have been exercised so far, that's close to 1% of them.
My guess is 80% will be exercised by month's end.
Step right up folks, last chance to get on this train.
Lion,
Surely you dont think that 20% of the option holders are going to forget!!
This, imho, opinion is full house time......in fact I think NZO actually owes it to the shareholders who arent up with the play, to issue an explanatory note or to ask them to contact their broker. Perhaps they have done this.
Anyway, this is a FULL HOUSE. They all get taken up.
They sent out a note the other day and I guess if people bought them since they know about them anyway?
Well, yes, 80% was largely a guess. The figure depends largely on what markets and oil price do over the next 3 weeks, and who knows about that? Friday in the US shows there just ain't no telling.
But even so, I would reckon there are a good 5 to 10 % of holders who won't have the $ handy and maybe think they didn't pay anything for them (rightly or wrongly) and won't bother to exercise even if sp is 165+ If it's around 155 that % could well increase.
But then the OCs were almost all exercised against expectations, weren't they?
I hope the % is high myself, and that some good use is found for the money. I still reckon taking most or all of PPP is a sound move.
I'm another one looking at ASB margin lending - don't want to let this opportunity pass me by.
Toot toot!
DON,T BORROW--to buy shares!!!
--------------------------------------------------------------------------------
there may be a small handfull of you out there who may SQUEEZE a argument to borrow but 97% of you guys look in the mirror take a deep BREATH and be satisfied with what you have---- 87-------was built around borrowed money world wide -- becarefull
Its nothing new, it was happening in this latest meltdown- Opes Prime etc
It still comes back to what you can afford to lose. If you don't think they are worth borrowing against then should you own them in the first place. To be borrowed 20-30% of the paid up value is quite acceptable if you know the risks.
And this from someone who lost heavily in '87.
Agree - you borow 100% of a house value these days (well recently) so 20-30% for shares seems ok to me too!
Also you might like to think how well it would have turned out if you had margin traded PRC when at 90 cents.Even if you had to buy on market you could have easily topped up at 95 at that time.
Come 1 july NZO will be again closing the gap with PRC.As i once said a long time ago i do not know which company will win the race but there will be little in it. PRC has a big handy cape to overcome.That being that 1/3 of itself is owned by the other runner,so it means that for PRC to win 2/3 of itself must beat 1/3 of itself pluss NZO's other assets. A big call that is way come july the SP's will close again,and why converting the OD's is a good idea by whatever method you can. But DYOR
"Total production up to 08 June 2008: 13.5 million barrels."
Previous figure was 13.3 million up to 4th June so she appears to still be producing at a good rate - looks like the upgrade might be significant ...:)
nzo had a good gain today[3c] and if the forward market for the dow delivers a good bounce from friday then nzo should add to their gain tomorrrow.
some positive news re momoho spudding would help as well.
nzo @ nz$1.70 by friday is very possible
M
have not seen much comment about these flow tests - to me they are huge.
nzo can't say anything really until after june 30 view perception could influence the options, but, they must have a big ramping press release drafted, ready to release in early july.
any views?
M
Fortune
Why the oil boom will eventually bust
Friday June 6, 10:21 am ET
By Shawn Tully, editor at large
High-flying tech stocks crashed. The roaring housing market crumbled. And oil, rest assured, will follow the same path down.
Not everyone agrees. In an echo of our most recent market frenzies, some experts pronounce that the "world has changed," and that the demand spikes, supply disruptions, and government bungling we face now will saddle us with a future of $4, $5 or even $10 a gallon gasoline.
But if you stick to basic economics, it's clear that the only question is when - not if - prices will succumb.
The oil bulls are correct in their explanations of why prices have jumped. It's indisputable that worldwide demand has surged, chiefly driven by strong growth in China, India and the Middle East. It's also true that most of the world's reserves are controlled by governments in places like Russia and Venezuela that mismanage production, thus curtailing supply growth.
But rather than forming a permanent new plateau for prices - as the bulls contend - those forces are causing a classically unstable market that's destined for a steep fall.
In a normal oil market, the cost of producing the last, most expensive barrel of oil needed to satisfy worldwide demand sets the price for every barrel the world over. Other auction commodity markets work much the same way.
So even if Saudi Arabia produces at $4 a barrel, if the final, multi-millionth barrel required to heat houses and run cars costs $50, and is produced, for argument's sake, at a flagging field in West Texas, the world price is $50. That's what economists call the equilibrium price: It's where the price that customers are willing to pay meets the production cost, including a cushion, naturally, for profit or "the cost of capital."
But today, the sudden surge in demand and the production bottlenecks have thrown the market radically out of balance.
Almost exactly the same thing happened in the housing market. And both housing and oil supply react to a surge in demand with a long lag. In housing, the lag is caused by restrictive zoning and development laws, especially in coastal markets like California and Florida.
So when the economy roared back in 2002 and 2003, builders couldn't turn out homes fast enough for buyers armed with those cheap mortgages. As a result, prices spiked. They no longer bore any relation to the actual cost of buying and improving land, or constructing and marketing a new house (at some reasonable profit margin). Instead, frenzied buyers were setting the price.
Because builders were reaping huge windfall profits, they rushed to buy and develop land. And sure enough, those new houses were ready just as buyers were retreating to the sidelines because they could no longer afford to buy a home. That vast overhang of unsold homes is what's driving down prices today.
The story is much the same with oil, with a twist. A big swath of the market isn't really paying that $125 a barrel number you hear about seemingly every hour. In China, India and the Middle East, governments are heavily subsidizing oil for their consumers and corporations, leading to rampant over-consumption - and driving up prices even more.
But sooner or later the world won't keep paying those prices: Eventually, the price must fall back to the cost of that last barrel to clear the market.
So what does that barrel cost today? According to Stephen Brown, an economist at the Dallas Federal Reserve, that final barrel costs just $50 to produce. And when the price is $125, the incentive to pour out more oil, like homebuilders' incentive to build more two years ago, is irresistible.
It takes a while to develop new supplies of oil, but the signs of a surge are already in place. Shale oil costing around $70 a barrel is now being produced in the Dakotas. Tar sands are attracting investment in Canada, also at around $70. New technology could soon minimize the pollution caused by producing oil from our super-plentiful supplies of coal.
"History suggests that when there's this much money to be made, new supplies do get developed," says Brown.
That's just the supply side of the equation. Demand should start to decline as well, albeit gradually.
"Historically, the oil market has under-anticipated the amount of conservation brought on by high prices," says Brown. Sales of big cars are collapsing; Americans are cutting down on driving. The airlines are scaling back flights.
We've learned another important lesson from the housing market: The longer prices stay stratospheric, the worse the eventual crash - simply because the higher the prices and bigger the profit margins, the bigger the incentive to over-produce.
It's even possible that, a few years hence, we could see a sustained period of plentiful oil supplies and low prices, meaning $50 or below.
A similar scenario occurred following the price explosion in the 1970s and early 1980s. The price spike caused the world to cut back sharply on oil consumption. By the mid-80s, oil prices had fallen from almost $40 to around $15. They remained extremely low for two decades.
It's impossible to predict how the adjustment this time will take shape, just as it was in housing. There the surge in supply came in places the experts swore there was "no supply," and wouldn't be any. Builders found a way to extend vast tracts of homes into California's Inland Empire and Central Valley, and even build "in-fill" projects near the densely-populated coasts.
An earlier bubble is also instructive. In the early 1980s silver prices jumped from $10 to $50 on the theory that the world was facing a permanent shortage of silver. Suddenly ads appeared asking homeowners to bring their tea sets and jewelry to Holiday Inns for a big price. Silver supplies poured from seemingly nowhere, out of America's cupboards, of all places.
And so it will be with oil. We don't know where the new abundance will come from, from shale, or tar sands or coal or an OPEC desperate to regain market share. We just know that it will appear. With prices like these, it always does.
Some very goods posts of late.
Re: do not borrow money to invest in shares. As a rule of thumb i agree. An exception is, if you borrow you MUST be prepared to lose it all.
Im still very bullish about oil. The worst thing is the volatility. This is causing increasingly nervousness amongst all spectrums in Asia at least. Oil hasnt had a correcytion for a while and the longer it goes without a correction the bigger it will be. Eventually the bottom will fall out of it but the bottom may still be $40 or more.
Margin lending on nzo. personally the risk is too high at the moment. 10% or more swings in thr sp will be nothing and i just think the risk is too great. One thing i dont like to do is to be told i have to sell. I prefer to do it on my own terms.
Inflation will go off the scale over the next 12 to 24 months compared the the last decade or 2.
Time to start thinking ahead more than ever
Below is an extract from a small article in the Dominion this morning (top right corner of front page). This is not available online.
“Tui’s gas flare
Tui oilfield is flaring off enough gas to power Auckland …….AWE said it was trying to find ways to use the unexpectedly big quantities of gas…..in the mean time flaring would continue.”
Yes its available here...on the Taranaki Daily News site
http://www.stuff.co.nz/dailynews/4578214a6002.html
also had this quote.....
"To date Tui had produced 13.5 million barrels of oil in 315 days "without missing a beat"."
I like the sound of this from the STUFF article too -
"Energy Minister Harry Duynhoven, the MP for New Plymouth . . . . said that AWE had recently found they had far more oil and gas than expected."
Hmmm, 'far more oil than expected' - nice ring to it, like a cash register
If opec has so much control (their control is mainly limited to supply not price although the is a strong correlation) then why did they allow oil to be as low as $10 per barrel not very low ago.
Should the US start producing from the protected area in Alaska then that would change things as far as prices so as well.
OPEC is very strong make no mistake but OPEC were not the ones who drove the prices up from $100 to $136 in no time flat. OPEC were not the ones who pushed up oil to a record price of $11.00 in a single days trading.
Love to be a fly on the wall at that meeting I bet Iran and Venezuela are hot topics + American marine military build up in the Gulf recently. Wonder what price they really think oil should be?
Jim Ritterbusch, president of the U.S.-based energy consultancy Ritterbusch and Associates quote..
.."The Saudis are concerned that sustained high oil prices will eventually slacken the world's appetite for oil, affecting them in the long run.
Oil kingpin Saudi calls for talks with consumer countries
7 hours ago
JEDDAH, Saudi Arabia (AFP) — Oil kingpin Saudi Arabia called on Monday for talks with consumer nations on soaring world prices and reiterated its readiness to meet any increase in demand.
The Saudi call was swiftly welcomed by the United States which has expressed mounting concern about the impact of high energy costs on the world economy.
At a meeting chaired by King Abdullah, the Saudi cabinet restated its view that the leap in prices that saw New York's benchmark contract hit a record 138.54 dollars on Friday was unjustified by fundamentals.
But it added that it had asked Oil Minister Ali al-Nuaimi to "convene a meeting soon of representatives of producer and consumer nations and firms operating in the production, export and trading of oil to discuss the jump in prices, its causes and how to deal with it objectively".
"Saudi Arabia ... has notified all oil companies with which it does business, as well as consumer nations, of its readiness to provide them with any additional quantities of oil they need," added the cabinet statement carried by the official SPA news agency.
The Saudi cabinet said it still believed that soaring prices "are not justified by the reality of the oil sector or market fundamentals".
"As a producer nation, Saudi Arabia knows that the oil market has an adequate supply of crude and mounting stocks to trade," the SPA report said.
"In coordination with OPEC member states and the leading producer countries, the kingdom is working to guarantee supplies to the market... and prevent any unjustified or abnormal increase in oil prices that might affect the world economy, particularly the economies of developing nations."
The world's leading oil exporter and the dominant producer in the Organization of Petroleum Exporting Countries cartel, Saudi Arabia announced last month that it would boost its output by 300,000 barrels per day to bring its production for June to 9.45 million bpd.
The close Western ally has come under huge US pressure to boost output to help end the volatility in world markets that saw New York's main oil futures contract, light sweet crude for July delivery, leap 10.75 dollars a barrel on Friday -- its biggest one-day jump ever.
US Treasury Secretary Henry Paulson swiftly welcomed the Saudi call for talks with energy-hungry consumer nations.
"It's got to be constructive. So I welcome it," Paulson said in an interview with the CNBC business television channel.
"I think that the solutions to the big problem are longer-term solutions in terms of investing in supply and alternative sources of energy," he said.
"There's no doubt that oil prices where they are is a problem. There's nothing welcome about it, it's a real headwind. We're focused on it."
During a visit to Riyadh in May, President George W. Bush called on the Saudi authorities for the second time in four months to put pressure on fellow OPEC producers to boost production.
Washington has repeatedly blamed OPEC's refusal to raise its output ceiling for the five-fold surge in world prices since 2003.
The cartel counters that the real reasons for market volatility are a shortage of refining capacity, speculation by traders and political tensions in the main producing regions.
Last week, Crown Prince Sultan bin Abdul Aziz said that even a producer of Saudi Arabia's importance to the world market could not set prices alone.
On his Middle East tour last month, Bush himself seemed to accept some of the burden of the Saudi argument.
"Our problem in America gets solved when we aggressively go for domestic exploration. Our problem in America gets solved if we expand our refining capacity, promote nuclear energy and continue our strategy for the advancing of alternative energies as well as conservation," he said.
"One interesting thing about American politics these days is those who are screaming the loudest for increased production from Saudi Arabia are the very same people who are fighting the fiercest against domestic exploration, against the development of nuclear power and against expanding refining capacity."
I didn't say OPEC were driving the current spikes and short term movements
what I'm saying is that the higher Oil goes without oil consumption dropping the happy OPEC and all energy producers are why massively increase production to drop prices to 50bbl say ,I remember not long back OPEC said they believed 50bbl oil was fair value next they said 70bbl was fair because costs in discovering & production were increasing alot
,Guess what 100bbl is now fair value in OPEC's eyes IMHO.......................
-If you think Oils going down 60+ your be very wrong --time will tell............
They have to release anything relevant to market in a timely manor though. Whether its positive or negative. Trying to get good news out earlier than later to help influence conversion wouldn't be a problem I don't think - its got to come out some time, and if the information could leak out another way and the market is not fully informed, then that would be a breach.
Hi OILER,
As I look out my window Ensco 57 is towering over Nelson and looks to be a hazard for planes landing in from the North.
She is due to sail July 28th for Maari. A most impressive sight.
Savannah - 28,500 tonnes is sunning itself in Tasman Bay and probably catching yonks of fish before sailing to Taranaki for condensate on June 16th. Presume without facts that this will be from Umuroa.
Cheers,
Rotweiller
iaybe some ping pong here but a believe you are aiming all your issues in one corner and not looking at the whole picture.
opec ARE correct in saying exploration and production costs have increased. So what may be fair in 3 months time may be quite different to know.
Just like running a car at its most effiecient speed economically, producing oil is the same. It therefore is very logical for Tui operators or the opec nations to produce oil at an optimum rate. Can you blame them for doing this? There oil wont last forever so what happens to the opec nations in 100 years.
The point is OPEC, consumers, traders and politicians all play an important part in the equation. Blaming opec alone is wrong. Or at least that is where you are targeting the blame. Whilst China, India and the US are prepared to pay at these prices then we will continue to pay high prices. If we stopped using oil or take drastic measures by using different methods od transportation or using alternative fuels then the demand will go down and things will start correcting itself.
While we keep using plastic bags (china uses about 50mbo per year. ie alll of tui oil), buying anthing that is dependant on oil then we will continue to face problems like we are encountering.
Sooner rather than later something will give. What that is no one can say for certain except it is certain that it will happen.
This article is worthwhile to have a read. (Sorry it is Chinese version. If you are not happy with, just skip it.)
http://udn.com/NEWS/FINANCE/FIN5/4376644.shtml
as a somewhat inexperienced person when it comes optioons, i have several thousand options, i dont understand wheter i should exercise them , it is just a matter o f perception where the NZO price may go wheter i exercise this or is there more to it. I look forward to follwoing the threads now i have enrolled.
cheers
richardseay,
You should certainly exercise your options. The $1.50 it costs to exercise each of them will be your best spent money ever!
Hi macduffy,
Took the info from Oiler on Page 286 of this forum.
Slight error on my part as rig is Ensco 56 not 57.
Check Oilers out the window obs.
Cheers,
Rotweiller
Well I'm not so happy. Got in to NZO at 160 today. And it closed down at 158 :-( not the greatest start.
On a positive note. VPEO went up
heres that article about the flare..
http://www.stuff.co.nz/dailynews/4578214a6002.html
Nita
Slightly off topic, but i did see recently on the news ol George W, make some sort of pledge to help out the Polar Bears environment by not allowing drilling in there critical areas, including Alaska.
Not 100% sure of what the pledge/deal encompasses but it was definitely a win for the environmentalists!
Opec is not a Cartel, this is because they currently have no spare capacity...
:cool:
.^sc
Re: do not borrow money to invest in shares. As a rule of thumb i agree. An exception is, if you borrow you MUST be prepared to lose it all. (from nita)
Applies to any shares whether owned on borrowed money or not doesn't it?
Here's a link to a report by Hamilton Hindin Greene on the NZO site. They've been slow to see the worth too, but better late than never. Target price $2.18
http://www.nzog.net/investorsSection/HamiltonHindinGreene%20NZOG%20Note%20June%202008.p df
[QUOTE=tim23;205785]Re: do not borrow money to invest in shares. As a rule of thumb i agree. An exception is, if you borrow you MUST be prepared to lose it all. (from nita)
Applies to any shares whether owned on borrowed money or not doesn't it?[/QUOTE
People do a lot of stupid things in life often with little research . Inappropiate borrowing is common-be it on cars houses etc .
This does not apply to nzo which is the financial opportunity of a lifetime .
NZOG have been around a long time and are survivors with productive assets and no debts plus promising prospects-eg momoho plus a profitable shareholding in prc . An investment in nzog is more likely to be successful than any other investment I know of-be it managed funds ,kiwisaver,finance companies and even money in bank(take off inflation and taxes and the net interest on a bank deposit is around 2% ).
OIL and gas on tap is akin to money in the bank except the value will fluctuate for better or worse .
NZOG is exceptional and i have never borrowed to buy shares but i will borrow-margin lending-to convert them . I feel there is a 10% chance they will triple within 12 months ,a50% chance they will double within 12 months (increase in value by 160 c) and about a 10% chance they will decrease in value by 10 cents mean ).Hence I find it compelling to convert every option .
ASB make conversion of the options easy-I spoke to steve at asb margin lending today and all i have to do is transfer the options to asb nominees plus current head shares-tell them i want them converted on 30/6/08 and if you have 1/2 as many options as head shares you dont need to find any money .
Thinking I will get back into the market tomorrow and buy more options which are better value most days .
Oh, and then the Forbar report too. Can't seem to get the text or a link (although it's on HotCopper with odd punctuation)
"Their Research Note values NZOG at $2.15 "with more upside than downside risk to this number""
Yeah, better late than never.
P.S. Despite the cautious remarks posted here, I'm still quite happy with a bit of margin lending thru ASBSEC. But that's just me, I'm a bit short of $ to convert all my oppies, but I'm not going to go belly up if it all turns to custard. We each have to make our own assessment of risk vs reward. I'd advise anyone to be careful with margin lending, but also, don't write it off from a knee-jerk reaction about borrowing to buy shares. DYOR
Anyone see the report about all the gas flaring off at TUI. Apparantly enough gas is being spilled to power Auckland. Anyways if anyone is still up and about this will ba on at 10-30 on nightline,tv3
I saw the article on TV3 also. If it becomes an issue I wonder if they could run a line over to Maui and toll it in through their gas infrastructure? If there's enough to "run a small city" it might even be profitable.
Nice to see Russell Norman acknowledging the gas as a 'precious resource'.
Interesting couple of days at the AOGC here in KL the last few days.
At the CEO's panel, all the CEO's (Oil Majors and Analysts) stated that oil is currently overvalued by 2x - General concensus was that fundamental value of oil currently is $70 / barrel. However, with the current speculative interest in oil at the moment, Goldman Sachs EOY price target is $150, but they caveat this with "we expect it to hit $150 sooner rather than later" but are still holding their EOY target at $150.
As I expected, all the oil companies stated that reserves are still plentiful; 42 years of oil left and ~60 years of gas left - this is based on what is currently proven and at current recovery rates. Which may only be 20% of what is proven and recoverable in another 20 years time.
The main problem at the moment is that supply is too weak, but also at the moment demand is weak, imagine what might happen if demand were to strengthen.....
All you peak oilers can crawl back into your caves for another decade or two!
Interesting to hear some theories on biofuels vs. oil and what biofuels isn't doing to food prices - which goes against the common belief. This was put forward by an independent research house, not someone with a vested interest.
Sounds a bit easier than reality....
Anyone know why they are really flaring this much gas? Is it really because they have so much more than they currently re-inject and use for gas lift? That is quite a significant amount, with that amount they will need to have the sea water pumps going up the flare as well, to keep the temperature down, which makes the flaring look a lot worse than it is.
But isn't that raging lunatic Fitzsimons just a class act:
Hopefully all her supporters are still whinging about everything and preparing to pack up and go to Australia.Quote:
"They should simply cap the well until infrastructure is put in place to capture the gas,"
UU
Thats the sort of comment I would expect from the Greens....I suspect they dont have a clue as to why there is a flare. Plug it and the whole of Umuroa will be shut down. :eek:
A pipeline over to Maui, possibly but very expensive. Unfortunately (in this case) it is a by product of the well stream fluid separation process.
The oil industry looks great from my front and back windows :D Can only continue to get better.
Oiler
Oiler
4 broker reports within 2 months suggesting a fair price of around $2.
Including 2 of the big full service brokers. Lets hope they have this one right.
But lets also look at the anti-lobbying.This flaring has been going on for a while now but with two weeks to options arrangings needing to be finalised we have a hororable member of paraliment wanting to close it down.Part of me wonders if there is a Greymouth link here.Tui is a smashing success and for the jeolous types a negative has to be found.
In the long run it could end up a double positive for the joint ventures. If we pumped it back into the well it would keep the pressure up and when the oil is all gone[100 m barrels later] we end up with a gas field.It might well be worth thinking about.
I think this might be a situation were one of these clipped on the side of Umuroa?
http://www.synfuels.com/technologyUpdate.html
Digger we have similar thoughts..
Press having a go at NZO....lobby groups on board......hard to prove but it has all the behavioural signals of an influential entity or group wanting in on NZO at the lowest price possible...
the timing is right ....2 weeks before options convert ..oil market in a state of flux....rumour mill activated....negative press (re: environment) + one MP on board to add political uncertainty.
We may have to put with all sorts of skulduggery between now and the end of the month.
Hmmm......these signals.....might ask Tricia for my shares back ;););)
The oil industry looks great from my front and back windows Can only continue to get better.
Oiler
Oiler, hope the back window view is in relation to previous postings re ensco 107
M
They can't pump it into the well!!! That is why they are flaring, because their re-injection and gas lift capacity is obviously at the maximum, they are flaring the excess. The only way to cut back on flared gas would be to throttle flow rates....
They would need further gas compressors to deal with this and possibly more flow lines to probably another gas well that would need to be drilled.....$$$$$$$
Oh dear.....Quote:
I think this might be a situation were one of these clipped on the side of Umuroa?
http://www.synfuels.com/technologyUpdate.html
I view brokers report abit like my dog's poo in the garden. Great for the plants, but consumption is not recommended. The only good analyst reports worth looking at are the ones from Aussie who specialise in oil and commodity stocks.
I recall all the brokers had a valuation of $1.30 on PRC knowing the coal price was settled at $300/400 per ton... LOL
I also don't hold these in high regard and take them on face value. They are the only ones making money whether the shares are going up or down..
The fact that more of them are rating this positively should mean more positive exposure, and supports the self fulfilling prophecy to a degree.
There is so little negativity out there, just positive reviews, profit increases, pending reserves upgrade, speculative drills.
Just the options issue to get through.
Be interesting to see what occurs if the resevers upgrade is out before the 23rd. AWE said they expected it mid June... NZO were saying by the end of June.
From today's Independent.....
New Zealand Oil and Gas says analyst Forsyth Barr's prediction of an increase in Tui oil reserves are "purely speculative and are not sourced from NZOG". Spokesman Chris Roberts said "no figures are yet available as the field reassessment is still in progress."
Yeah, they are speculative.
But there is the fact that AWE is reviewing the reserves, and the resones behind the review - AWE is continuting to review the TUI reserves because of the continued strong production performance of the reservoir, would suggest to some that an increase is expected, rather than a decrease.
Even if there is no increase, if flow rates keep goping whilst the prices are going up over the short term, thats got to be good.
With the exchange rate dropping and US$250 now being suggested, thats lots of cash coming our way..
http://www.nzherald.co.nz/section/3/...0515701&pnum=0
LONDON - The chief executive of the world's largest energy company has issued the most dire warning yet about the soaring the price of oil, predicting that it will hit US$250 ($332) per barrel in the foreseeable future.
The forecast from Alexey Miller, the head of the Kremlin-owned gas giant Gazprom, would herald even more expensive petrol and send shockwaves through the economy.
His comments were the most stark to be expressed by an industry executive and come just days after the oil price registered its largest-ever single-day spike, hitting US$139.12 per barrel last week amid fears that the world's faltering supply will be unable to keep up with demand.
{ More on the web }
can anyone tell me the advatage of selling your head shares to convert options at the current prices
is the gas coming from the wells or is it being created through the seperation process
if coming from the wells, then would that not displace oil at the top , thus bringing oil down towards the actual drill, inturn a higher oil recovery rate?
M
so you have 100 shares you sell for $1.59 = $159 and you convert 100 options for $150,so providing you pay no brokerage and the options were free its a poiuntless excercise,so please no more people waffling on about the price is being held down cause people are selling to convert thier options cause it makes no sense at all to me
It does if you don't have enough ready cash to pay for your options. The money has to come from somewhere if you are going to convert. Many sell the heads to achieve this so puts selling pressure on the heads which in turn reduces the option price.
But my friend you're completely ignoring the fact that the options DO have a current market value - irrespective of whether you got them "for free" or not.
And if e.g. I hold 100,000 shares (mkt price $1-59) and 100,000 options (mkt price 7c) I can sell the shares for $159,000, using $150,000 of the proceeds to exercise my options - total cost = $150,000 plus $7,000 worth of options which I can no longer then sell, i.e. total cost of $157,000. The brokerage on the sale of the head shares, particularly through a discount broker, would come to nowhere near the $2,000 profit you would make, and of course you would be able to earn some interest on your $159,000 until the options exercise cheque went through.
(Giving up $2,000+ profit mightn't be much to you, but it sure would matter to me! And in case you think that the size of holding in NZO shares/options that I have quoted in the example would be exceptional, I'm afraid you would be very wrong.)
Not that easy to grasp. Sell one share for 158c buy one for 150c and use up your option worth 7c. At the same time diluting your new share by (150+158)/2= 154. This is probably the worst outcome for you.
You would be better off selling your option although brokerage may make this route a less than positive return. But note that by doing this your holding gets diluted.
Or as I suggested above, if you hold heads and options it is conceivably better at ~5cps just to forfeit the options if you don't have cash to convert. And not complicate life for yourself, and DS and TR giving them cash they haven't the foggiest idea what they are going to do with. If you hold on you may get a worthwhile price for your option but you may end up just binning it. And after June 30 your heads will appreciate a tiny bit more...
And me too. Sold heads at 50,000 heads at 1.60 bought options at 5.1. Any profit is worth having.
Is raghand the same as braindead?
Ah, no.. Its a fair bit more offensive...
But only the braindead would think 2K in profit for 2 trades of brokerage, interest on that amoun for a couple weeks or a month and back to the same net position at the end isn't worth doing if it is available. 2K here, 2K there taking advantage of margins and being in the same stock position at the end is a simple way to make money..
Why don't you sell the options & keep your heads. If one trade is too much hassle why do you bother owning shares?
Options are worth money at 7c each - where I drink (cheap $3 pints), 1000 options are worth 13 pints after $30 brokerage.
10,000 options are worth 223 pints
Alternatively - transfer them to me - I will mail you a transfer form & donate $20 per 1000 options to the charity of your choice!
I recall this time last year I bought PRC at the IPO price of $1.00. :)
My broker told me not to invest in PRC and I went against the advice. What a fantastic investment PRC has been. :)
I must be a double raghand then. I sold the lot at 50% profit...no problem decisions to make.
watching the price fall back..... timing a re-entry:cool:
Fried Egg ...all investors have their own methods in making a $....so why the criticism?