Forum Archive Index - May 2003

[Marilyn Munroe <who.c@res.co.nz>]

Mike Hudson a contributor to the mailing list once described NZ Oil & Gas 
(NOG) as an employment scheme for the directors and management. I am more 
open minded than Mike and acknowledge that while the above live a comfortable 
life they may eventually return value to shareholders.

NOG is speculative investment engaged in the business of oil exploration. The 
revenues from producing fields, mainly Ngatoro, are used to drill further 
holes in the ground.

A proven field Kupe has been around for years. NOG holds 19% of this field. 
Development has been held back by cheap plentiful Maui gas. With the run down 
of Maui and and current electricity shortages combined with Genisis Power 
major holding, it is likely that development of field will take place. This 
may place a strain on NOG balance sheet as I would imagine off shore gas 
fields are not cheap to commission.

The Tui offshore prospect was drilled earlier this year with interesting but 
indeterminate results. More interpretation of the drill results by the 
boffins seems to be required.

A level of healthy skepticism is required when interpreting NOG's public 
announcements. Their tone suggests that all that is needed is for the hole to 
drilled and oil revenues will flow straight into shareholders pockets. Alass 
as we know from our life experience nothing is ever that easy. Oil 
exploration is a hit and miss affair with a lot more misses than hits.

I jokingly refer to my NOG holding as my Lotto ticket. Who wouldn't love to 
participate in the discovery of a major oil field and then move to Beverly 
Hills, movie stars swimming pools & blonds driving sports cars.

So should you hold NOG? The answer depends on you appetite for speculation and 
your assessment whether the management will drill holes in the right places.

Boop-boop-de-do Marilyn



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