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clock Created with Sketch. 11/12/22
18:40
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Originally posted by Mitchdon:
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It would be hard to criticise the fundamentals of CUE energy. For a relatively small cap O&G they have developed a profitable business with geographic spread and development upside. They booked a Net Profit last year of $16m (2021- ($12.7)) and on my cashflows should book a similar NP for 2023. OG/NZO takeover OG's wider interests are mainly privately held. In addition they have previously attempted to T/O NZO under a Scheme of Arrangement. "for the right price". 3rd Party T/O While less likely given OG's stated intention to "expand in the Asia Pacific region" there is the possibility OG/NZO would sell "for the right price". Dividend While this would rerate the stock I think it is probably not on the radar for OG. They would only receive 35% of any dividend paid (OG 70% of NZO, NZO 50% of CUE.) Conversely they currently have effective control of where/when CUE directs its income for only 35% contribution. Share Buyback This has the potential to benefit the major SH's by indirectly increasing their %age holding. It also could assist minorities as it will leave more on the table for a future T/O. Do nothing This is my least preferred, and CUE's current, position. I am concerned that OG have decided that a T/O at this stage is to difficult. Instead CUE will become their vehicle to carry out CAPEX and exploration/development effectively burying profit and ensuring the SP remains low.
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Hi Mitchdon, this is a great idea of yours. CUE has unrealised potential, and anything that can help unlock that has my support.
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