• The final resource payments at FID and first LNG cargo
• A big stake in the Papua LNG plant
• The exploration licenses, where several discoveries already amount to 6.0Tcfe (Raptor, Triceratops, and Bobcat), according to GLJ, apart from some 40 other prospects and leads (like Antelope South, which used to be mentioned as a possible giant). 
• The possible upside of a further resource evaluation which InterOil could trigger at any time.  

It's not a terrible deal but our board could have held out and not caved immediately.

Much also depends on the certification, of course.

Additions (subtractions) welcome..

I'm not happy with this deal at all on first blush. But I'm trying to find some upside to it to relieve my frustration at seeing the 'string of pearls' getting spilled all over the floor and swept up by Total and OSH.

OSH shares were at a high of AU$9.82 (US$7.09) in June 2014 before oil prices began their downhill plunge. If oil goes back up to the range of $100/bbl in the next few years (as some have predicted will happen), will OSH recover to that level? Who knows, but if it does, then the value of each share of IOC in the current deal becomes $57 (8.05 OSH shares per 1 IOC share X US$7.09). Add in a CVR payment of $6.05 X 3 to 6 tcfe [approx 9.2 tcfe to 12.2 tcfe certified] (CVR value = $18.15-$36.30) and we're at $75 to $93.

If the synergies that Botten has been going on about with Exxon actually happen and the Papua LNG plant can save up to $3 billion in costs, then OSH shares should actually go higher on Papua LNG FID, perhaps as early as late 2017.

If OSH can make a deal with Exxon for the third train using part of our(!) assets from TBR, OSH shares again should rise accordingly.

Not that I ever wanted any of this to happen, but I can certainly see the wisdom in such a deal from everyone's perspective--other than that of a small retail IOC shareholder.

Yes, I would also prefer we had been able to develop some of these pearls ourselves, or at the minimum prove some of these out helped by cashflow from an LNG plant. But on the other hand, that is a pretty distant picture, timewise.

Since we have a bigger stake in the other licenses we could farm some of them out, or sell a small part in PRL15 to finance that.

But this alternative is one for the long-term..

I would have been happier if OilSearch (of which we'll become shareholders) had not instantly offloaded 60%-62% to Total.

'Palm' pid='69753' datel Wrote:OSH had to unload assets to Total to help pay for both this deal with IOC and the Certification pmt to PAC Lng shareholders. Total can now bring in one or more other strategic partners to drive and market the project(s) that come out of this.

Yea, I realize that, but it gives us very little stake (4.5%-6%) in the upside of the exploration pearls and the Papua LNG plant cash flow.

'ArtM72' pid='69775' datel Wrote:Is there ANY reason why a white knight in the form of a major Japanese trading company or Indian utility could not make a public bid for IOC shares and bail us out of this whole mess?

I don't think that's very likely, these parties usually prefer smaller stakes. However, there were other parties interested though, per Hession.

'admin' pid='69754' datel Wrote:

'Palm' pid='69753' datel Wrote:OSH had to unload assets to Total to help pay for both this deal with IOC and the Certification pmt to PAC Lng shareholders. Total can now bring in one or more other strategic partners to drive and market the project(s) that come out of this.

Yea, I realize that, but it gives us very little stake (4.5%-6%) in the upside of the exploration pearls and the Papua LNG plant cash flow.

Yes but you will now have that stake in TWO LNG PROJECTS that collectively may become the lowest cost operation in the world, bar none; one that is already succesfull and WILL EXPAND  to an additional train AND of course Papua LNG.  I think the deal right now stinks.  But let's face it, IOC stinks more.  Good riddance AFTER we get a better offer.  The future there is bleak going forward for a long long time if they continue.  No one has stomach for more PM or MH and the miserable IOC soap opera.  OSH has a much brighter future, it's profitable, it pays a dividend (albeit small).  They are much smarter.  Things will move much faster.  More transparency and rig reports.  More opportunities.  Perhaps the worst thing of all for longs is that OSH are selling two much of IOCs assets to Total.  This will reduce OSH leverage in PNG with XOM and TOT.

Well, they're certainly smarter, here is what 2126 just spotted a couple of minutes ago:

An additional consideration: Total, by acquiring 60% of the E/A field from OSH pending closure of the IOC/OSH deal will, in a brilliant move, remove its liability for payment of 60% of the Interim Resource Payment to IOC, now OSH (if the deal goes through). If the IR payment is around $2 billion, Total just paid for its 60% share of E/A ($1.2 billion) with the removal of its 60% payment of the IRP ($1.2 billion). OSH will get 40% of the payment, which at $2 billion, would give them $800 million. OSH is providing a fund of $770 million to pay IOC shareholders who elect to take their payments in cash rather than OSH shares. Quite the deal by OSH and Total...bummer This deal is being funded by the Interim Resource Payment which until yesterday was ours (IOCs).

Don't be Fooled by the CVR "Carrot"