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Life is tough Fish. Money (dividends) has been controlled and now even our thoughts.
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Thanks for the apology.
A dividend cannot of course increase a companies wealth . However in the case of nzo it would likely increase a shareholders wealth-if only because of return of tax credits .
It would likely be more than that-Nzo has more than 1/2 its cash hoard in US dollars which is now probably obtaining a negative return-this will do nothing for the sp
NZO has stated they will pay a reasonable annual dividend if circumstances permit . Now that bank investment returns are so low I think they should reconsider this policy-paying a smaller dividend twice yearly is surely preferable to leaving profits to be paid as a dividend in the bank -for the bank to make profits on rather than nzo shareholders .
There is a good reason to annually pay a dividend and have a history of doing so. Banks still are the biggest lenders and as i discovered some bankers have little understanding of of share appreciation as compared to a regular dividend.I have argued until blue in the face without a dividend the company has more money and this should be just as valuable without a dividend. During the last option conversion i had a lot of trouble getting a loan simply because the company did not have a regular dividend history even though plenty of security was offered.It is crasy but we do have to be pragmatist and accept that banks do require dividends if any future monies are to be loaned to purchase shares in a given company.
Again shares in lieu of dividend is my prefered way to go.
NZO has booked some nice foreign exchange gains of late, but now could be a good time to switch there $US back into $NZ. (At least get some better interest returns without the currency risk!)
Should they do that in time for the AGM then the accummulated gains to date could easily fund a fully imputed 5 - 10c dividend.
Of course dividends come down to individuals circumstances & preferences. (My position is that i'm not usually in favour of them)
I wouldn't want NZO paying out 5c twice a year & then coming back to shareholders again to fund an acquistion!
NZO management have a bit of a conundrum, they want to remain prudent & fully appraise all options, yet have a lot of cash earning bugger all interest in $US, & could be getting stung on the FX rate.
Then again with interest rates low, using some gearing/leverage to acquire something earnings accreditive would be a smart use of shareholders funds.
NZO without some debt is open to a takeover itself, & for a company with a market cap of > $500m, & with reliable, sustainable cashflows, NZO could easily fund a $200m loan.*
With alot of O&G companies showing signs of SP appreciation, perhaps NZO is missing a trick here, or are they waiting to sell off PRC to go after a decent acquistion (all of PPP or TAP, or perhaps swipe up LMP?).
With Tui tickling along nicely, the price of Tapis holding up & Kupe costs all paid for, & just awaiting first commercial production - perhaps the last piece of the jigsaw is Pike River.
When Pike is up & running, cashflow positive/profitable, then NZO will act?
* Any such loan could be repaid by the proceeds of the Pike River sale???
shasta, expect monies held is usd$ required to pay for tui drilling
IMO it is more cost effective to come into an aquisition at grass roots level comparedto buying a producing asset
if posters read everything they could about romania then will understand the play has an enormous amount of upside
time has now passed to buy a cheap asset
look back at what nzo have done in last periid - for starters 100% play west of kupe has huge upside.
northern nz basins have scope for nzo to go 100% for first couple of years before gets to dri$$ing time
nzo - do not borrow $$$
M
M
correct. NZO is virtually hedging their bet by having some in US and NZ currencies. As you pointed out, the US money will be to fund drilling activity.
Strong gains in oil and on the dow on friday may see the sp push through the magical $1.50 mark on Monday. For all you TA people out there the $1.50 mark represents a significant number. It is the price that many of us (including mwa) paid to convert the options. Therefore we may see some extremely strong resistance as this level where many will see this as an opportunity to break even. watch for volume and im convinced it will also give the bigger players scope to pick up a sizable handful of NZO without affecting the sp too much.
Agree completely with your arguements Nita. It will take a hugh volumn to go from 150 to 160,then a small fraction of that volumn to do the next proportional step.
A stuck record with NZO faithful is to say you will never see NZO below price X again. Years ago before production it was one dollar.Myself and a few other had egg on our faces over that. Now i think shortly [weeks] we will never see NZO below 1-50 again. My only caveat on that one being the world does not completly fall into a deep depression,mass die off of dieseas or convert to the Amish religion. And if the world does convert to the Amish way of life i will have wished i invested in horses rather than oil.
Still from 1-50 to 1-60 is a long haul.
I wonder if NZO has maybe allready missed out on investing in a bargain, if and it is a big IF, the tide has turned?
In which case a good dividend would help to ease the pain.
Any takes on that?
they sure have missed out on buying 'bargains' if there were such a thing to be had. I don't really think NZOG would know what a bargain and appear to be stunned rabbits in the headlights when it comes to buying other companies assets or farming in on projects. Rest assured they have passed up on some good ones given their technical team worry about risk. No doubt the company will follow past behaviour and the board will make the decision for them and throw their lunch at some turkey investment (there have been numerous ones in this companie's history).
They are not the masters of their own destiny given their minority holdings in their non-operated permits.
Nita I doubt if those who have toughed this out since paying $1.50 (expecting the SP to go to and stay above $2.00) will fold at this point. Selling options converted at $1.50 is a loss because dividends have been much less than interest costs over this period and the options were frequently worth more than 10cps over their history. I certainly don't consider it break-even - individual investors may consider that there are better investments for them though - as many have over the last couple of years. $1.60 to 1.70 would be my "break even" range.
$1.50 may be a level where a 1 for 4 offer to PPP holders might be triggered...this is hanging over the NZO SP..
Returns from Pike and Kupe are heavily discounted by risk and inflated cost of money rates despite scheduled to come on stream within 6 months, if included in NZO valuations at all.
The POO holds the key and most commentators seem to indicate USD75 currently supports the industry while the world develops some alternatives. That would seem to support a continuation of more than NZD100 per barrel to NZO which is fantastic for producing assets. This time last year when people were considering the option conversion the NZO expectation was for over USD100 per bo (NZO activities report qtr ended 31 March 2008).
The nice thing about dividends is that they support long term holders to hold. Obviously not paying dividends forces shareholders to sell to realise any gain. Isn't that dumb? I think if I was honestly trying to have a neutral stance towards holders and traders, I would favour awarding quarterly dividends...paid annually if the amount was smallish..Dividends also help the imbalance between fundamentalists and TA traders - but that is a debate for another thread.