Kia Ora, this discussion is about Z Energy the dual NZX/ASX listed fuel company. 

Back in August, Ampol made an acquisition offer and the shares jumped about 15%. Ampol is still in due diligence and if the offer comes off the table, it is expected shares will fall again.

CEO Michael Bennetts is a career oil guy with a 20-year history in BP. For the CEO of what is effectively still an petroleum company he is surprisingly critical of the industry, but I guess that is a good thing as change is approaching that could decimate companies like this if they sit still.

The company is looking to the retail arm (to compete against traditional supermarkets for convenience using the servo network), and alternative fuels to provide this future.  They do a decent job of the convenience retail revenue, driving nearly 50c per litre of fuel sold. 

Interestingly the company in the last 12 months closed NZ last remaining oil refinery and will now import all consumption fuels from refiners in Asia. This is also playing out our side of the ditch, with the Australian government supporting Ampol and Viva Energy to maintain their local refining operations until 2030. 

This is really a confirmation that essentially there is no money in oil without incentives. Z is looking at alternative fuels, including bio fuels (which the NZ gov’t has mandated by 2022) and hydrogen, to move away from carbon. 

Bennetts seems like a good operator, and he seems committed. This is the reason I even bothered to look – he was a recent guest on Lunch Money the podcast by Shareies. 

This one is already playing out. If Ampol acquire it, then it’s off the table. If they don’t, I wouldn’t want to be a bag holder.