ppp and nzo

Another bit of trivia that may be worth mulling over is what effect is any rise in NZ Oil and Gas sp going to have on PPP.

Both NZO and PPP are on record as saying that they are not going to rest on their laurels now that TUI is producing. They have to replace this prime resource.

For NZO there is considerable pressure on to produce the goods because it has a lot to lose in 6 months time if it doesn't (about NZD$208,482,000 to be precise )

How come ? NZO has 138,988,000 Options expiring on June 30, 2008. They are exercisable at NZD$1.50.

The present NZO sp has just risen in the last week or so by about 10cents to around NZD$1.16. (PPP moved up today by 1 cent on the NZX to 27 cents.)

So NZO has to lift the sp a lot if it is going to convince shareholders that it is worth shelling out for the Options at NZD$1.50

OK NZO has Kupe started but no production till 2009. It also has Pike River Coal ( NZO has a 31% stake) which is being developed and should start producing about March 2008. But those alone are not going to do the trick.

So what else could help. What can you suggest ?
I personally think that it will want to surprise with the Dec Quarter result to show what a money spinner TUI is. It will project very positive figures for what will be attained by the end of the March Quarter and indicate a strong position by end of June.

It will, if it can, indicate a drilling programme going forward. Ok it has indicated a wish to drill the Momoho area around Kupe which will have no real spinoff for PPP.
But if it was to indicate that the JV was going to drill the Toke prospect near the Maui field then that would spark interst and benefit PPP.
Now I don't know how close the Toke prospect is for drilling. In reality it could be a year or two away.

But no doubt NZO will be pulling out all stops to get that additional money flow in if it can possibly do so.

Obviously some move to farm-in to other operations, perhaps with PPP as an ally. Doubt if it would consider repurchasing a share of PPP having just sold out its shareholding earlier this year. But something has to happen and fast.