cosmos, tunisia, kisaran, genesis (kupe) & div, page-6

Dargie,

As always the price has to be right, but secondly the size of the asset is important. NZOG already gets 70% of its revenue from its 15% of this asset. I wouldn't want it to take another 31% and have to raise a fair bit more equity and/or debt to be left with all the vulnerabilities of a single project company, one platform, one pipeline, one process plant and a single set of geological and market risks.

I'd be happy with NZOG taking another 5 to 10% as good utilisation of its currently surplus cash.

NZOG is at an advantage as you've noted wrt tax, but only insofar as it pays the earnings out as dividends. This has never precluded foriegners outbidding locals for most corporate assets, and indeed is only material to them in a few cases such as Australian companies with imputation credits, but even then it only effects them to he extent that they would be paying dividends in excess of their Aussie profits. Hard to think of one where the matter is more than academic.

I am not so sure Genesis will be sold before the next election, nor that It is desirable for Genesis to offload before the IPO. Market might just have electric fatigue after digesting the first two, never mind the political headwinds.

If NZOG can get another 5 to 10% at a lowish realistic price then great, but to take the 31% would be foolish. The operatonal risks are too high, it's sp too cheap to issue discounted equity at, and debt a further risk and entirely undesirable.

EL