Originally Posted by
Bilo
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.