A fair amount has been written already about the improving operating performance of CUE which has not been reflected in the share price. This thread is instead about the controlling interests of CUE and its number 1 shareholder NZO. This thread is an extension of a discussion started by invertedva's research on the controlling interests position in both CUE and NZO.
A review of the controlling interests of these companies highlights the potential for a takeover of CUE or consolidation with NZO.
Ofer Global is a private portfolio of international businesses principally focused on shipping, real estate, energy, banking, technology and investments. Their business interests span Europe, North America, Australasia, the Near East and Asia. (www.oferglobal.com)
O.G. Oil and Gas Singapore Pty Ltd is a subsidiary company of Ofer Global group.
O.G. Oil and Gas own 69.86% of NZO.
NZO in turn own 50.4% of CUE.
So control of both NZO and CUE rests ultimately with Ofer Global.
Ofers interests in NZO and CUE are currently valued at $79m with a further $49m in outstanding capital.
Market Cap Ownership Value Outstanding Capital NZO $75m 70% $52.5 $22.5 CUE $53 50% $26.5 $26.5 $128 $79 $49
O.G Oil and Gas initially took its 70% position in NZO in January 2018 after a successful partial takeover. At this time NZO already had a 50% interest in CUE.
A second takeover bid by O.G. in 2019 for the remaining NZO shares was unsuccessful.
In 2016 NZOG delisted from the ASX stating that "trading in the company's shares on the ASX consistently suffers from poor liquidity and low daily trading volumes and that "the cost of continued listing on ASX outweighs the benefits". (AAP, 2016)
In 2020 NZOG, under the guidance of its new majority shareholder, returned to the ASX. At the time Andrew Jefferies, Managing Director stated "As Shareholders are aware, the Company strategy has been reviewed and refreshed". However, the poor liquidity and very low trading volumes remain.
NZOG and CUE have also not been Ofer Globals only investment in Australian Oil and Gas.
In 2018 OG Energy, another subsidiary of Ofer Global, acquired a 40% stake in Beach Energy's Victorian Otway Basin assets at a cost of $344m.
At the time Mr Ofer, the Chairman of Ofer Global, stated that "with this acquisition, we have acquired a cornerstone producing asset around which we intend to continue to build the portfolio and grow our presence in Australia and the region". (SMH 5/10/2018)
So an extremely well resourced private company holds a controlling interest in both NZO and CUE. They have a stated position of wanting to grow their oil and gas portfolio in the region. Finally the capital required to complete the aquisition of NZO and CUE would likely be less than a third of the capital already invested in their 40% purchase of Otway.
IMO there is potential to consolidate CUE, NZO and Otway assets to produce a mid sized Oil and Gas entity with a strong production and exploration portfolio. This is alongside the obvious economies to be achieved by consolidating these assets.
Given that CUE's current SP doesnt truly reflect both their recent great performance or the continued high oil and gas prices that consolidation may occur sooner rather than later.
CUE Price at posting:
7.3¢ Sentiment: Buy Disclosure: Held
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