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My take this AM - jft310 - 03-11-2013
It should be clear to all that IOC had a bid the Board was willing to accept or why put out a final bid date .We further know that bid was amongst the 2 Super Majors , 1 NOC and 1 Utility bids announced by WA at IPAA. Why because the Board set up a final date!!!
Could IOC have received more bids after IPAA and before the bid deadline of course they could. To not announce today to me means that one of those late bids was of sufficent interest to ask more questions and must be superior to the prior bid they had selected as acceptable. Or we are getting more for our assets in a sell down than the Board expected. Thus it must be quite bullish.
If the bids were weak one would accept the previousely aceeptable bid...If the bids were complex the IBers were hired to uncomplicate them and figure the value of each bid.
I don't know when we hear but the lack of news raises the bar !!
RE: My take this AM - Petro2458 - 03-11-2013
I would expect that a press release would require a quote from the SM... Could take a day or so to organize
RE: My take this AM - jft310 - 03-11-2013
pickboone take
The Exxon wild card and implications for IOC
.
On March 6, Exxon issued a presentation for its annual meeting in which the second "New Development" in the entire presentation is its PNG LNG Project. The fourth bullet on slide 32 of the presentation states, "Adding resource for a potential third train" and there's talk about adding additional trains beyond this.
On the previous day, an article in Islands Business included the following quote from Oil Search head Peter Botten, “If Oil Search was to keep growing in PNG it has to make major acquisitions and it has to buy the major companies”.
Given the marginal cost of adding LNG trains (a 2003 EIA paper estimates capital costs of less than $200 per ton of annual liquefaction capacity for trains at existing plants) and the accelerated time horizon for commencing new production at PNG LNG, InterOil's gas should be worth way more than the ~$3 per mcf at which PNG LNG transactions have occurred in the past. XOM's ~7 mtpa plant will cost almost $20 billion, but if an additional train costs even $500 per ton to build, that would equate to less than $2 billion. Adding another $500 million for the pipeline, XOM and OSH could theoretically increase PNG LNG's capacity by 50% for an additional investment of 10-15% of its cost for the first 2 trains.
The XOM & OSH option has major potential implications for not only the Elk/Antelope sell-down, but also for Triceratops and for increasing the probability that IOC will soon be acquired. For those who listened to XOM's annual meeting presentation, you would know how upbeat XOM is on PNG at the moment
RE: My take this AM - jft310 - 03-11-2013
in response to pickboone we see this
iluvioc•10 minutes agoFlag
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.
The fog begins to lift.
RE: My take this AM - Stavros - 03-11-2013
Hey JFT
I agreewith your take based on three singing birdies in my bushes.
They're whispering that two bidders are shortlisted for further nego.
Translation .... "bidding war"
Thank you very much .... Elvis is in the building!
RE: My take this AM - ltinvest - 03-11-2013
I think too much is being read in to the timing of an announcement. I agree, IOC had an acceptable bid in late January and allowed them to put a deadline on the partnering process. I don't know if they received any bids that exceeded expectations but I am confident they received bids that met expectations. There have been some excellent and detailed posts here of why a lag may exist from the time Interoil makes a decision to the time that decision is announced. Nothing negative should be inferred from that gap other than there are housekeeping items to tend to prior to making a public announcement. The company has tried to guide us away from having expectations of an immediate announcement. My personal expectations are for the partner to be announced the 2nd half of this month. The market seems to agree when you look at April options premiums.
Some of the prices I am seeing here seem on the high side. The 4 year average of deals in the region is approximately $1.20/mcf. There are compelling reasons why that should be higher for the Gulf LNG. However, there will also be a discount applied due to this beng an Interoil lead project a few years out from production. I expect anything from $1.25 to $1.50.
Finally, I would not be suprised to see JKM, Total, or even Exxon as the winning bidder. My conversations have led me to believe the November 15th approval by the NEC of a contract operator for the Gulf LNG was significant and I've leaned towards JKM. Tree made a great case for Total and Exxon would have every reason to want "cheap" IOC gas. Of course, I still can't fathom why a SM wouldn't want to attempt a complete buy out of IOC. It makes so much sense! And i can also ad with confidence that each bidder was pre approved by the PNG govt!!
RE: My take this AM - Palm - 03-11-2013
Agree that this is likely going on and it makes sense since until January the Ant3 well was just confirming the IOC statements that Ant is a continuous structure and the bid deadline was announced. To that point the best bids had not necessarily been submitted. What all came in through Feb 28th likely contained at least one pleasant surprise and based on that the company has said they will be meeting with the IBs continuously and that means some Q&A for clarifications with bidders as well as the government. As well teh government needs to conclude negotiations with IOC regarding their ability to take anything more than their normal ownership interest. My guess is that O'Neill is (or has already) telling the PNG Negotiating Team responsible for the up to 50% option that the time is up and please report back to the Gas Committtee what your final answer is. You've used up all of your life lines.
Bet Maui's ears are burning with all of the airwave activity.
RE: My take this AM - jft310 - 03-12-2013
Everyone should reread stavros post he flys in the right bird flights.
RE: My take this AM - jft310 - 03-12-2013
The Japanese have been interested in E/A since 2007. The interest included full financing for the LNG plant as stated by Phil M at the RJ Institutional meeting in July 2007. Spartina sent me the audio disk to play in my car and I did.I can't imagine that they are going away quietly if they are the low bidder. The Exxon rumors were reinforced with the T placement in their pipeline at Gulf Province.OIl Search was supposed to find more NG and they havn't done such a good job of that. We can talk Total and Chevron but the cases for JKM and Exxon seem to be the strongest. How will it all play out?? With Cove Energy the bid and counter bid process was 8 months long as the stock price rose 4 fold.The Cove board selected someone and then viola there was a counteroffer. Will this B the same? Does IOC have a wall the expiration of the 2009 agreement ?? I think yes and IOC will certainly try to conclude this quickly so that expiration does not come into play.Is that even an issue?? When will we get out first aceptance from the IOC Board?? Will this be the last acceptance.? Who does the PNG govt want to win?? Its been said they want another major besides Exxon for diversity. If true how does that impact the bidding.? Is JKM acceptable to the PNG govt?? I would think so. For diversity sake will IOC cut a deal with the Japanese.??? Whats surety of LNG plant financing worth?? Some say 50 cents per mcf.The JKM deal would have that as a sweetener. I expect others opinions these are my early Tuesday thoughts.
RE: My take this AM - Palm - 03-12-2013
"Is JKM acceptable to the PNG government?"
They must be because all final bidders are approved by the PNG government. The only alternatives are:
1. JKM didn't participate in final bidding
2. CV is a liar and cheat like the rest of management and BOD.