Stock Guru: Leader coasting along nicely

Tuesday 30th March 2004

Further gains by New Zealand Oil and Gas and its options helped keep the top three placemakers from last week ahead of the pack by the end of the third week of the second Sharechat Stock Guru game.

The latest news from the company last week was that the Ocean Bounty drilling unit was on location off Taranaki and preparing to start drilling the Amokura-1 well in the PEP38460 area in which NZOG has a 12.5% interest.

It says it expects drilling to reach the Kapuni 'F' sands at about 3,700 metres in mid-April and that it will made weekly reports on progress increasing to daily reporting as the target is reached.

By the end of the third week, the shares were up 28.3% and the options were up 27.3%.

NZOG's Australia-based oil and gas explorer, Pan Pacific Petroleum, further boosted two of the top three portfolios, rising from being up 8.3% at the end of the second week to up 25% by the end of the third week.

Late last week, Pan Pacific reported drilling of its Taunton-4 well had reach 1,410 metres and that its target formations have been slightly higher than predicted. "Electric log data recorded while drilling confirms the extension of the Taunton Field into TP7 by indicating that both the intra- Mardie sand and the uppermost 8 metres of the underlying Barrow Group are hydrocarbon-bearing," it said.

Pan Pacific owns 4.157% of TP7. It says once the Taunton-4 operations are complete, the rig will book three kilometres east to the Backthorn-1 location which is also within TP7.

The leading contestant, Coaster, is now streets ahead with their portfolio up nearly 41%, or $4,086.65 (calculated on an initial investment of $10,000 equally invested across the five stocks in the portfolio). The second placemaker, BTN, saw their portfolio up just over 18%, or $1,808.80.

The most favoured stock, The Warehouse Group, which was chosen by 95 of the contestants, dragged their portfolios back as it slid from being down nearly 0.7% at the end of the second week to just over 3% by the end of the third.

But the second most popular stock, Tower, went from being down 2% at the end of the second week to being up 2.7%.

While there was no news last week from the retailer, ratings agency Standard & Poor's affirmed its ratings, including the BBB+ rating of Tower Australia, although it said the outlook is negative.

The ratings reflect the marginal, although improving, operating performance in Australia, partly offset by the strong market position of the New Zealand operations, S&P says.

"Despite the financial turnaround achieved by Tower in the second half of 2003, which has continued into the first quarter of the current fiscal year, the negative outlook stems from Standard & Poor's concerns about the delivery of Tower Australia's business model," it said. It Tower Australia can demonstrate its business model is successful, the outlook could be revised to stable.

Among the worst performing portfolios, Bogart jumped from last place to 349th as they regained some of the losses, largely thanks to Smiths City Group moving from mildly negative territory to mildly positive.

Mason's portfolio is now bottom, down 8.l8%, or $881.94, largely thanks to Genesis Research & Development, down 15% since the game's start, and Wool Equities, down 26.5%. Neither company has reported anything since the game started.

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