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.
Yes as i stated in an previous post, it becomes increasingly important where the money is parked and Shareholders should be informed.Also no point in looking at b/b until s/p drops well below $ 1.00 quite possible in the present continuing meltdown, the effects of wich may last for years.
One benefit of b/b is .that further down the track nzo could always have another option issue if cash is needed.
ps:Depositing in so called big banks is no garantie for safety.
[QUOTE=CAM;227232] Agree 100% Cam. As an exercise let say NZO 6 weeks ago rushed out and committed all our earning for the next two years.For 5 mins that would have looked like a team doing something,in hindsight it would have been a very foolish thing.It was bad enought for thoses of us that exercised the OD's without now losing that money a second time through hasty decisions just to seem to be doing something.
In mathmatics the last number to be discovered and put into general use was ZERO.Nothing seems to be for the human brain a concept somewhat hard to understand. Here we are devaluing the zero alternative as somehow inferior to taking action,any action.
I am somewhat in favor of buying into PPP and AWE as already mentioned as we certainly would not be running off overseas as FISH points out and engaging into committments that could have hidden faults.We certainly know where we stand in Taranaki.But again i do not know all the options in front of the directors at this time.
Digger
I thought this would have been a self answering question...your return is capital gains + dividends. If you bought in around Hector you would have made nothing over the last year.
Everybody likes to see a bit more bottom line on their portfolio...? Depends what your investment horizon is, if you can accept the dividends and accept a volatile share price, then good. Some others might like a bit of certainty. Keeping money in the bank has no/little risk and you will still get a good return with peace of mind.Quote:
Why does the share price need to be strengthened?
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.
The managements job is maximize shareholder wealth. Finance 101. If they see opportunity to increase long term shareholder wealth, take it. By investing in themselves (sharebuyback) there is no due dilligence needed, less risk and a very good portfolio. As Unicorn has pointed out, $10 a barrel is all Tui is worth, and Kupe nothing. I would argue however, that the shareholding of PRC will not be fully realised in NZO until it is liquidated into cash...
Digger, you say dont make decisions based on short term etc...BUT enough people were looking into the long term and paying $1.50. Oil markets have come down a bit, but has the long term story changed? Maybe a few PUT options wouldnt go a miss. This may be a short/medium term blip and an opportunity to increase shareholder wealth. It doesnt mean spending their whole war chest on it, just a proportion, which would still leave room for potential acquistion and committments. I wish PPP would do a BB instead of management buying up themselves! Greedy!
Also, after reading some posts, some people think a BB is just to stimulate shareprice short term? As Rif-Raf says, it reduces the number of shares on issue, therefore increasing future Earnings Per Share...this means greater return per share.
Digger,
Agree on the theme of your last few posts. Don't rush, don't panic. Don't thrash about. Let the management team keep their eye on the ball.
Who wouldnt panic after watching the sp tumble 25% in a few short weeks. Some of you dont even ask the question of where is the money being placed, and at what interest. Blind faith is a very foolish thing to advacate. Direct answers to direct questions unless something untoward is going on.. Do they stack it all in the one bank or do they spread it about?. NZO have a great habit of keeping the shareholders in the dark. macdunk
re. the cash funds, to quote from the recent shareholder review:
"In the interim, our sizeable cash "war chest" has been invested in short-term facilities with the major banks"..
Bob C
Still holding and adding on the lows.
They've stated that the cash is farmed out in a number of places (sounds ok to me). BUT I'm not a director of that firm, Equally, I'm not a manager - therefore I (as a share holder) don't get involved with (e.g.) the detail of the placement of cash reserves because general share holders don't have management responsibility. The directors ask those questions of the management - as with any company - this is a director's responsibility; companies can't work any other way. Otherwise - - why have company directors (?). Blind faith is a bit strong - but in any company, there must be 'trust' in the directors to perform their responsibilities. (But surely, this is teaching grandmothers to suck eggs - you know this already).
I am actually very surprise oil has held up so well when the world global economy and market crashing down.
Nita, I think it was one of your posts that provoked me to post these thoughts.
The price of oil has been going up in NZD terms over the past few days. The price is uncertain but oil has many things going for it.The NZD/USD will probably go much lower when the rate cuts come. If Maari and Kupe were pumping Bollard would be much happier.
Two days ago there was (another) chap out of the US saying that the marginal cost of oil production was about USD80 per barrel and that price could retreat to that. With the immense risks taken and technology applied it has to be a very profitable industry or it will not exist.
The POO could spike lower (besides that being potentially more disruptive than the recent spike to USD147) but:
· BHP’s cost of production last year was about USD80. A large established player – most new players’ costs will be much higher. The accounting surrounding the calculation of marginal costs is also doubtful. It is also historical.
· The marginal cost producers of oil are not in OPEC. Try oil sands, ethanol, deep water oil etc. The marginal costs of energy of all forms continue to increase. Liquid fuels more than most, because they are so convenient.
· Oil is no longer a commodity. This is another erroneous American accounting assumption that suits their manipulation of the world economy with derivative markets for everything. Nationalistic interests have taken control of access to oil fields. The big oil companies are not able to guarantee supply.
· Yesterday, OPEC in response to the US call for lower prices stated clearly that they intended to turn off the tap first. I could not find the Bloomberg quote again – one assumes that it was removed /edited out (only the Chinese censor LOL )– perhaps it wasn’t an official position just a Saudi saying that Iran and Iraq were still recovering from wars and needed the money. It was better for Saudis to leave the oil in the ground if the price wasn’t USD100. Now we don’t know what currency hedging in use so there will be some variation. They are determined not to flood the market with oil no matter how far demand declines – but they will try to meet demand at their price. OPEC has been talking to Russia lately as well.
· These actions around the world to ease the credit crisis are inflationary. Gold is going up. The new gold – oil will go up as soon as OPEC stop being Mr Nice guys to these *****.
· The Americans need petro dollars to remain USD and to help them out of their credit crisis. They will have to ensure that OPEC’s price for oil is supported in the new economy.
· The same US commentator above said “who knows what the Arabs will do”. I think he will be shown that the Arabs mean to be good citizens of the world – more than can be said of Americans under Bush.
The world needs to figure out how to live with a high oil price and that means using less - a low price doesn't help anyone.
Yes, I've noticed that too. I was more referring to fact of how AUD was the currency to be in according to a few people...I thought it would hold up a little better myself! Australia was near parity with the states only months ago and now below 70cents!
Oil price is still declining in NZD terms and production costs rising.
FPH is looking attractive again...
AUD is more exposed to volatile commodity prices than NZD, despite the drop in dairy prices!
;)
I'm not sure who is in the dark, but if you were a shareholder or had visited our website, you would know that in our June Quarterly Report we stated that:
"The funds... have been invested in short-term banking facilities with a number of S&P AA or better rated institutions. We are not in the business of financial speculation with shareholder funds".
For further clarification, our cash holdings are spread across a number of accounts with half a dozen of the major banks, and we are receiving appropriate rates of interest.
Our September Quarterly Report due out in late October and our AGM on 29 October will provided shareholders with more information on the company's performance and current strategy.
Its nice to know that you do pay attention to what goes on in these forums. The point that i was raising is that with all the fundamental analysis being discussed over the last 400 pages on this thread nobody has spoken about the interest or what banks are involved. Banks are crashing in some parts of the world you can at least tell us which countries the share holders money sits in. The very volatile exchange rates are another consideration. Macdunk
Code:Oil price in USD / EXCHRATE = NZD/barrel
yesterday 88.95 / .63 = 141.19
today 88.52 / .60 = 147.53
Where is this price decline you are speaking of???
Why would production costs be rising??????
NZD/USD now at 59.80c, below 60!!! Better go down to the petrol
station to fill up the car now!
NITA asking the question is not something you should apologize for. I will ask you the question what countries have they invested your funds in and why. It should not be a big secret surely. I have had enough trouble working out banks for my funds in this economic collapse. There will be banks at high risk as there is countries i would have thought that a long term fundamental investor like yourself would be gratefull for all the information rather than condemn a person for asking. Look at the prices lately of some of our well known banks. Macdunk
Its ok to ask questions but your tone (my perception) is questioning the integrity of the nzo management and their decisions how how to protect their investments especially in these new economic conditions. Personally i dont think Chris from nzo needed to defend himself or the company by your earlier post. As Chris mentioned, perhaps next time when you want information from nzo you should at least dyor first. I am sure others value questions that may or should be asked to a company as you suggested however as i said, the tone of your comments suggest that managements intergrity is under question. ie. how safe is their money etc etc.
Remember, the shareholders are the ones that have entrusted the management in doing their job. If they dont have confidence then they will not be a shareholder.
For the record, i currently invest in Malaysia (property and private business) , NZ and Aus sharemarkets. Why? i live and do buasiness in Malaysia. By all accounts thecurrent econic conditions in Malaysia is very strong although it will not be immune to the global credit crunch but is currently better positioned than NZ and Aus. Why have i invested in oil companies in nz and Aus? Medium to long term my view is these companies, now with strong balance sheets will be in a better position to survive and take opportunites of future economic conditions. Not sure why my views are imporytant to you but here they are
id like to invest in a malaysian:)
NITA there you go again twisting every thing i say all over again. I dont care where your own money is invested. I asked you where NZO have your money [being a shareholder] invested, and at what interest. I also asked in what country or countries. Surely you being a staunch fundamentalist, that would be of some interest to you. Perhaps with your head in the sand approach to reality, you take every logical question as being an insult. How dare i question anything silly me. I know that lately i have given some considerable thought to that question with my own investments. Macdunk
[QUOTE=duncan macgregor;227315]NITA there you go again twisting every thing i say all over again. I dont care where your own money is invested. I asked you where NZO have your money [being a shareholder] invested, and at what interest. I also asked in what country or countries. Surely you being a staunch fundamentalist, that would be of some interest to you. Perhaps with your head in the sand approach to reality, you take every logical question as being an insult. How dare i question anything silly me. I know that lately i have given some considerable thought to that question with my own investments. Macdunk[/QUOTE
yes i agree,in todays mess where shareholders cash is placed should be made public,they might be aa+ but that doesnt stand for much atm,would you be happy mcdunk if it was all beneath the directors pillow?
Duncan. If you read Chris's post then that has satisfiend you enough. As to the specific details of which bank and in what country i am personally not too concrned. I do not think they will have their bank tied up with AIG, Iceland banks etc. You know there is risk with any bank going under. The simple answer is they are exposed but have diverisifed their risk. They have money in US and local currency. They have money on call in in term deposits. remember BNZ were on the brink some years ago and got bailed out by the goverment. If the whole banking system falls over then you cannot protect your investment anywhere. im sure if you stuff your money under your pillow you run a higher risk of being robbed.
Since you are not an investor i really think you should concentrate on your own investments without taking on all the shareholders problems and being mother teresa. If one can afford to invest then i am sure they cann afford to take their own responsibility. Welcome your pro and against views about stocks etc but you are overstepping the line by telling people what they should do and what the company should inform the holders. compare nzo to most other listed companies here and abroad before still seeking revenge for your loss on this company a couple of years ago
Now the good news. the sun will still shine and business will survive and grow.
Probably a good point in time to drop the fist-fight and get on with business.
By they way - NZO finished up 3c....if anyone noticed.
The most important reason to do a buyback is to stop a partial or full takeover at a time when panic has depressed the SP. It will stop the transfer of some or all of the company to opportunistic predators. This is essential insurance in this environment & far more important than eps, shareholder returns etc.
I hope the company management are capable of appreciating that SP & market cap are essential to the SURVIVAL of NZO in it's present form & shareholding structure.
For example I would not be surprised if 50% of NZO could be grabbed for $1.50 per share.
Why wouldn't a company protect itself and ensure survival if they had the cash on board - I think $20m would get the SP up to $1.50 and then any bid would have to be $1.80 or so but would likely fail since the number of acceptors would fall dramatically if the SP was rising. Also they make a profit as other posters have pointed out, ie sold options for $1.50 & buy back for less than that.
hey the sp has fallen but look at the aussie shares and everyone who is losing money is looking to blame someone,yes should have sold in july but didnt and hey life goes on...
nzo only needs to get income from kupe and prc to top off the tui income,they are doing this very well to date and its not all bad as the market is saying on nzo,sit tight like i have and your sure to be rewarded,but hang on ive recieved over 20 grand in dividends so far this year
Thought i would try to guage what NZO holders most wish to do with the company cash pile.
If interested in this survey please select from three options.
1/ Stay inside our comfort zone. Buy only what we fully have experience with in Taranaki or NZ. Just do what we are doing for the next few years.
2/On Buybacks or others that will lift the SP
3/ Just completely leave it to the directors which will include overseas acquistions
Also rate your holding as A,B,or C with A being less than 100000,B less than one million and C greater than one million.
So my vote will be 1 C for Digger
If there is a strong and suprising leaning to one option will make sure it is passed on to directors.
Digger
1A - Tight control of NZOGs capital is needed.
Cheers
b and none of the above
buy into some other co which is strong fundamental wise and just as hammered as nzo in sp terms,buy nothing in africa or eastern european nations or highly muslim asian countries
B
1 is fine with me. The company has a lot of local knowledge, and a couple of very promising permits to explore.
2 is fine, but only if NZO shares are very cheap (< 140c). I can't see this using much of the available funds.
3 only if there was a compelling case, and it did not involve more than a quarter of the total NZO assets being in any one offshore investment.
I must say I am reasonably relaxed about my holding, even in these volatile times. The high cash holdings, and the business acumen of the chairman are major pluses for the company right now. The only weakness I see at present is too little attention to growing the company reputation as a stable and shareholder friendly investment.
1A for me......
B Most comfortable with 1 or 2. If they make an acqusition in this market I would like it to be cashflow positive from day one.
(2&3)a - Theres room for both. I still think your misinterpreting what a share bb is about - its not about 'lifting the shareprice' its about maximizing future value through increased EPS.
Totally for B 2.
About time the independant Directors started thinking of the desires of the shareholders and actually voting against the stranglehold of a certain large holder
a & 2
If the directors are looking to acquire a stake in a company with excellent prospects, what better than the devil you know - NZO!
To my way of thinking, this would be just as profitable as increasing stake in PPP or buying AWE with the added bonus that no due diligence is neccessary and there are no unknown risks.
digger 1A for me
but if posed same question interms of PPP would be 1B
regards
M
Sure, Taranaki / NZ should be NZO's main focus, but I have no problem with them looking further afield. Not that fussed on buybacks, but it should be an option that is available ( by way of motion at the AGM ) I've been a shareholder since '95 and have built up a very high regard for TR. So put me down as a 3A.
saw above reference to a message which seemed to be asking where all our money is being kept . did anyone answer ? does anyone know where it is deposited , and , and , whether it is safe . this is a question i have asked before !
will someone ask it at the AGM . many fumds in uk and europs have been parked in 'fancy ' accounts abroad in banks which have gone under viz uk local councils depositing in iceland which is now on the ropes ! ! ! !
ps apologies for spelling above . it's late ! ! !
2 questiones for Snr Roberts
1 can you please advise the average price of oil you sold last financal year converted to NZ dollars
2 can you also advise the average since then to compare
Thankyou
pps sorry folks that post , above , was meant for the PPP thread , but the question still stands ,. mea culpa ! ! ! !
1. Can be answered by looking at our Annual Report: $222m in Tui revenue, NZOG's share of production 1.78 mmbbls. Average price per barrel approx NZ$125.
2. The average since then is considerably higher, and will be stated in our September Quarterly Report out later this month.
And for those posters continuing to ask questions about our cash holdings - all our arrangements are with NZ-based banks. Most of the funds are in NZ dollars with a portion in US denomination accounts.
NB I don't intend to make regular postings on this thread. Anyone can ask us a question at any time by emailing enquiries@nzog.com
FYI from 5/10 to 8/10 tui production was 40,000 boepd!
Thanks Chris
Snr Roberts
muchos gracias
1B for me ...
2 A for the 10m or so neccessary to protect the company from predation
everything else 1
2B (nearly C) for me, for part of available funds, then preference for 1B at present.
My feeling is that if NZO step outside of the comfort zone (which needs to also consider shareholders' likely comfort zone) in the current environment then the SP could well get hammered even further ...
1 c
2 c
Agree need to stay in nz and need to act soon to prevent the kind of hammering the sp is getting today .
I'm not sure about you, but when I look for oil price movements, I dont look for daily movements. Because if we did, you would never get the medium term/longer term view of the situation. By your calculations, now we are $84.60/0.6050 = $139.83 NZD.
All you had to do was look at the NZO website and it shows the 'peak' just after the financial year end, to what it is now. Heres a graph, Phaedrus would have a field day drawing a trend line!
http://farm4.static.flickr.com/3045/...97f4d5.jpg?v=0
What costs am I talking about?
As I'm sure you aware, the oil industry is usually denominated in USD, when our local currency experiences a depreciation versus USD, NZD prices will rise.
Some USD exposure that NZOG has with respect to production:
*FSPO announced in USD terms
*Shipping of oil products, in USD
Further, although not directly to production:
*Wages will have to be competitive, in USD.
*Drilling rigs, in USD - although not part of production of tui.
Some say drilling rigs will become cheaper, maybe, but remember there is a reasonable waiting list, and the marginal cost of oil that everyone talks about is with respect to the tar sands in Canada, not offshore drilling. The marginal cost is from an investment point of view, not ongoing production costs, so we cannot expect tar sand operations to close down until the cost of production is greater than the benchmark price.
so we cannot expect tar sand operations to close down until the cost of production is greater than the benchmark price.
-I'm pretty sure If oil falls below $80bbl tar sands becomes uneconomic
I think the Canadian oil sands companies are getting very worried about the drop in the price of oil (so am I considering I just bought BHP and AWE two days ago) OPEC will not be able to make a difference in trying to reduce supply, that's been well proven in the past. Supply and demand is in charge now.
With NOG at todays price it is mighty tempting to jump in and buy more but that would mean I'm 80% in one NZ share and we all know about diversification.
Been glued to the PC screen here in the US this morning as everything gets thrown off a cliff. Bit of herd madness taken over with the selling now. (selling the stocks I own so maybe I'm biased)
I'm talking about costs of 'production' are lower than $80 JB..
Costs of an 'investment decision' maybe at $80 - this would include buying all the infrastructure, equipment etc. Production costs of already in service operations dont include buying new facilities...
So, an 'investment decision' would be uneconomic, but 'production' is economic.
All this means is that we wont see growth in output from Alberta for a while, until costs associated with investment decisions come down or oil price goes back up, but remaining production will still continue.
At the moment, just hang onto your hats. There's one hellava wind blowing and its all blowing South!:mad:
B 2 for me
and def. B/B IF S/P goes south of $ 1.00 btw not far to go.
Got to be a supper op. and not just for gain in s/p but better than money in the bank.
Got to be a no brainer.
I am happy with management by and large but this is a new game for most and look overseas, where the executives with the best credentials got shot down in flames.
MR. SANDERS of Filthex springs to mind in NZ
CHEERS
Thanks Digger for the poll
I am all for the following in general but witrh some reservations
1.A
2 (primarily to prevent vultures taking over nzo. the purpose is to create value for the shareholders in my view and not just to prop up the sp short term. Who knows how many shares instos or otherwise are wanting to dump so any buy back may be very well muted at this time)
3. (ultimatately the management and board need to have their finger on the pulse so to speak There are going to be more and more opportunities for companies with strong balance sheets to take opportunities.)
Digger,
3.A
hang in there NZ oilers... last night some of the chch posters got together and we were talking about how opportune this time is, and over the next few years to buy amazing stocks...
We will survive and we will perform....
just got to wait this out for abit...
:cool:
.^sc
http://oilsandstruth.org/high-costs-...ction-advances
There we go...
'A new report found the break-even oil price required by new mining projects in the oil sands has jumped to $85 a barrel, an increase of $20 or 31% in barely more than a year.'
'The break-even price in May, 2007, was $65 a barrel, assuming an 8% rate of return, capital costs of $100,000 per flowing barrel and operating costs of $20.50 a barrel.'
Its the intial start up costs, ie project investment decision, that makes the $85 cost...with OPEX at $20.50 a barrel = No shutting down of operations just yet.
If oil sands are turned off
Won't that wipe out current spare capacity (based on current demand/supply)?
Hi Token,
What I'm trying to say is, that wont happen...
Operating costs are only ~$20...which means oil prices need to fall a lot further to close down tar sand operations already in production.
It will only affect the growth of new projects coming online...ie wont affect current production.
Some could shut down, if they are forced into bankruptcy from committing to projects at high oil prices and then having them tumbling down..but really, its best for them to continue as banks would get less from operations shutting down. I doubt any of them are 100% debt financed anyways....it will be the equity participants that take on all the risk.
......get out of NZO you guys. Recession?....what recession. This is just the beginning of a TOTAL UNPRECEDENTED WORLD ECONOMIC COLLAPSE! The American bull**** economy is bankrupt as we all know and all other major economies around the world cannot escape thier own demise. Oil will be one of (if not THE) hardest hit commodoty......I'm picking sub $50 barrel in the not-too-distant future. NZO WILL NOT BE A VIABLE COMPANY!!
you sound like a fearful capitulator GR8DAY
Excellent - now waiting for the key day reversal
Have a great day
Take a deep breathe and calm down GR8DAY. It's only money...
I'm beginning to take an interest in NZO again after selling out at 149. There is very strong support between 95c-110. NZO spent years there back when it was an explorer.
Might have to get that buy order ready.
NZO getting close to cash + pike value, free oil wells anyone??
NZO would still make decent money @ $50/barrel, especial with the NZD @ 50c which is where it will be shortly.
Thanks all for voting in my poll. I have avoided making any comments on NZO while this small poll is running and boy is the world haveing some action--the wrong way.
Will end the poll at 8-00 PM on sunday so any other comments or results are still welcome.Have two phone votes.
Cheers Digger
3A, certainly not 2.
Thanks digger
In this market nothing makes sense. PPP has net cash of more than 19 cents and the market is selling them at 17.5 cents. So figure that one out. NZO can go lower simply on fear alone. We may see below $1 if the world markets continue to tank.
nzo can go lower-much lower-its not fear alone-its a deadly combination of fear ,margin lending and need for liquidity .
All 3 could be combatted by a buy back programme-the sooner the better .
There is no one solution to the current financial crisis but lots of smaller remedies . If the board does not act to remedy the problem there may soon be much less value to an nzo share .
After saying that I do believe we have an experienced and brilliant board that has become shareholder friendly and will make the right decisions in this world crisis .
Interesting day today - the day that oil crossed back under where it was a year ago.
For the forseeable future I see low production cost energy (NZO) being far more lucrative than relatively high production cost steel making materials (PRC). Current very strong income streams (NZO) are much more attractive than dubious income streams that will not start in earnest for at least another 9 months (PRC). I think PRC is currently vastly overvalued compared to NZO.
Further falls in the value of the PRC stake may reduce NZO nta but will not impact on NZO earnings - which I calculate are running at about $300,000 net per day. That is about $9M a month, which is hardly the stuff of doom and gloom!
I do not see the world economic recovery being possible with significantly reduced energy consumption. I also do not see the OPEC states accepting oil below $50 - which looks like it may be around $100 NZ! NZO can live, quite happily, with that.
The NZO share price fall over the last few weeks has been disappointing, but not that unexpected given the combined impact of the NZOODs and the financial meltdown. Unfortunately the resultant volatility of the NZO share price has given the impression of a struggling junior oiler, when it is now a cashbox/producer. It would help the long term image of the company to get more stability into the share price. It would also be helpful to increase earnings per share. These are the reasons why I prefer a buyback, albeit on a limited scale, while shares are being offered cheaply. Bailing out overly leveraged shareholders is not a reason for a buyback - enhancing value for continuing shareholders is the objective.
I am remarkably relaxed about my NZO holding. The figures on paper are not particularly impressive at present, and on reflection my decision to ignore the investment for 6 months after the NZOODs to let things settle was a poor one. But I still see a lot of value in the investment, and I retain confidence in the management team.
Unicorn,
Surely the NZOOD cash raising is good for NZO for any shareprice under NZD1.50 ?
As share price moves downward below $1.50 the cash brought in by the NZOODs helps to buffer the shareprice by increasing the cash backing and therefore should mitigate against further downward movement.
Maybe somewhat academic given the global slaughter which is driving everything down, including PPP which as mentioned by another poster is now trading at below its cash backing.
NZO and PRC AGMs will be interesting !!
Z
I am also relaxed Unicorn - trying to keep a positive light on things. For many of us longer term shareholders, todays SP is still over triple what we paid for them a few years ago although I admit to being a bit dissapointed about it not being 5x more. Secondly, to people like McDunk who say NOGgers were foolish not to have got out earlier..... well, fair comment - but that would have required a willing buyer and I would not have been happy with the thought that knowing the market would crash I would then preserve my 5x advantage by selling my shares to someone who will tomorrow lose their house.
So, I remain relaxed and my lean-too at Coromandel will have to go without paint for a little while longer.
do nzo still have any hedging positions left to fill - if so may end up selling oil at a higher price than on the market
M
I am a big fan of the way that the board has handled NZO.
As I have already posted I sold out a week or so before the dilemmas of the crisis hit. I have never denied that I see this company as fundamentally strong compared to the market. I sold out down. I am in no way gloating after this. But at the same time I need absolutely rock solid value before I reinvest. For myself, looking at NZO this is around the 93c mark. Based on pure cash in hand that I can depend upon.
What an amazing lot some of you are. Some even say they would rather hang on long term than sell to some one else to take the loss [BULLSH*T]. Not one of you questions in this era of crashing banks, bailouts,and volatile cross rates where and at what percentage this money sits. America is going under, i wonder if any of your money is there.
Its bad enough to be that fundamentely stupid that that you dont insure your self with a stop loss, but even i would expect you to ask the real questions. Did it ever cross your minds that this money might be sitting at risk?. Management come out with the usual trust me, we know what we are doing, which simply keeps the faithfool content. Macdunk
Hmmm, I was merely going to observe that oil is down to $78.54 overnight and the DOW just 50 points so we could be getting near bottom....but I couldn't avoid reading McDunk's amazing, ignorant, lunatic rant which seemed to focus on 2 things both highly questionable and irrational
(a) he feels personally aggrieved if some shareholders choose to hold rather than sell (which would thereby actualise a theoretical loss, burning their boats and abandoning the recovery in their position and gifting it someone else)
(b) he says "America is going under" whatever that means.
If America was going to go under if would have done so in the 1930's Depression when their economy sank 50% and governments everywhere were abysmally ignorant as to what was happening and did stupid things such as heavily cutting government expenditure and trying to maintain a Budget surplus and tight money. But it didn't, it rebounded even then within 10 years.
Or during WW2. Or during the Cold War.
They will have a bit of a recession now and rebound stronger than ever within 2 to 3 years.
Look what Germany and Japan managed to do after WW2.
I think you have been at the wacky baccy McDunk and you are trying to accentuate your high.
Dow rallies 6% in the last half hour...could this be the bottom?
MVT to attack the person with childish sneering comments only shows you up as the irrational person that you are. The rational person sells up then comes back when the market rights itself. Your policy of holding at all costs, then averaging down buying more of downtrending stocks will lose out big time. I would imagine you will end up jumping out the window one day from a great height, shouting [THE WHOLE WORLD IS MAD EXCEPT ME]. I expect your portfolios value is down by half this year simply because of your self rightcheous attitude of never being wrong. I got this one right on the button MVT, you got it wrong, which is costing you read back the thread with an open mind and learn from it. Macdunk