However, while NZOG is building on the good timing of its increasing oil flows from its offshore Tui well coinciding with record global oil prices, it remains a possible target for a takeover bid, ABN broker Peter McIntyre believes.
Its Tui field began producing in July last year, with the light crude being directly shipped to Australian and Asian refineries from the production platform.
In January, its nine-millionth barrel was produced, coinciding with a $41.4 million after-tax profit for NZOG, compared to $500,000 a year earlier, and delivered an inaugural 5c dividend for shareholders - the first in almost a decade.
It's stellar 50% share value increase since July, on the back of global prices, Tui production, and Pike River Coal progress, has seen its value increase from $1.08 to $1.53, with ABN recently moving its recommendation from "speculative buy" to "buy" with a 12-month price target of $1.79.
Mr McIntyre said despite NZOG's share price gathering momentum, its positive outlook for future exploration made it an attractive takeover target, noting that Australasian Worldwide Exploration already has 42.5% stake in Tui's production, compared to NZOG's 12.5 % stake.
However, "Any offer would have to be above $2 [per share] to offer a premium," he said.
Other positives for the company included share options coming due, an increase in the estimated reserves of the Tui and Kupe fields, with a 15% share in the latter, and continued global oil demand"The Tui and Kupe licence areas hold very real potential for reserve upgrades.
NZOG is well positioned with management ability, technical expertise and access to capital to explore these opportunities," Mr McIntyre said.
Also making NZOG a potential merger and acquisition target is its 30.63% stake in listed Pike River Coal, a company it spun off its books in May this year and raised $85 million in an initial public offering.
Pike River is almost to the production stage of delivering specialist hard coking coal from its Brunner seam in the Paparoa Ranges near Reefton, at the end of a 2.3km tunnel it has been working on for the past 21 months in exceptionally rugged terrain.
Last month, Pike River struck $US300 per tonne delivery deals with foreign customers - triple the benchmark coal price of a year ago.
Earlier this month, Pike River shares broached $2 for the first time, its boosted market capitalisation displacing Hellaby Holdings from the stock exchanges's top company SE50 index.
Mr McIntyre's financial disclosure document is available on request.
