DIGGER depends on the bank staying viable dont you think?. I would expect some of you at least to question where they are placing all this money. The really smart ones might even ask at what interest rate. Macdunk
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Buying back shares in own company,no matter how cheap,dos'ent increase long term income for the company .Buying a company with high income no dept and loads in the bank will increase long term shareholder wealth.ppp seems to fit.
NZO market cap is $453M
Cash is perhaps $285M
PRC holding about $125M
So Tui, Kupe, Tax Credits, and all the rest are valued by the market at $43M.
That is $10 a barrel for remaining Tui in ground oil, and nothing for Kupe. Not a bad investment, and quite a safe one. Buy while prices are low, don't wait until economic fundamentals improve and prices rise.
NZO is down 10% this week. With about two thirds of the assets being cash, that indicates the rest has been marked down by 30% in three days. PRC is down rather less than that, so NZO oil assets have effectively been marked down over 50% this week - which makes it a good time to buy them back at current panic selling prices.
NZO return to shareholders over the last year is now looking rather slim. A couple more days of declines and there will have been very little return to shareholders over the year. This was a year of exceptional oil prices, fantastic production levels, and "finding" a whole lot more oil. If the company can't deliver much of a return to shareholders in those circumstances, it seems totally illogical to embark on new investment in a much riskier environment.
The share price needs to be strengthened before shareholders can have confidence that the board is achieving good results for them. No action is not a good policy. At some point management need to do something. I think that point has arrived - in ground oil at $10 and Kupe for free!
How do you measure your return?Quote:
NZO return to shareholders over the last year is now looking rather slim. A couple more days of declines and there will have been very little return to shareholders over the year. This was a year of exceptional oil prices, fantastic production levels, and "finding" a whole lot more oil. If the company can't deliver much of a return to shareholders in those circumstances, it seems totally illogical to embark on new investment in a much riskier environment.
Some would argue that with the fall the environment has become less risky
Why does the share price need to be strengthened?Quote:
The share price needs to be strengthened before shareholders can have confidence that the board is achieving good results for them. No action is not a good policy. At some point management need to do something. I think that point has arrived - in ground oil at $10 and Kupe for free!
I can see oil coming out of the ground and money going into the bank. I received a dividend. Seems like the management is doing OK to me.
Their job is to run the company not manage the share price. The market sets the price. If the market is miss pricing then so be it. That is the way the market works.
Uni,
You can hardly blame management for the falling shareprice.....we are facing deleveraging of positions everywhere, and selling in those circumstances is usually indiscriminate - in fact shares that are still showing a paper profit can end up being hit the hardest.
Let management get on with running the operational side of the business, and continue to sift through the potential opportunities that must be getting more attractive by the day.
There is this useful tool called google
http://www.petroleumnews.net/storyvi...storyid=270645
but you need to sign up to see it
[QUOTE=CAM;227225]How do you measure your return?
Some would argue that with the fall the environment has become less risky
So the board spends the $300million buying overseas assets-it turns to custard-like air nz and ansett-tui is destoyed in a storm-nzo is worthless in a world economy that has collapsed .
[quote=fish;227229]
If the world economy has collapsed what might you think the $300 million in paper money might get you?. I would be concerned about how I was going to feed my family than be concerned about the NZO shareprice.
At the moment I am quite happy with what NZO are doing. I am not advocating rushing out and spending $300 million.