Am I confused about how this OSH buyout would work?

If OSH buys IOC then they should be entitled to all of the benfits listed in the SPA between IOC and Total.

So OSH would get the "full" interium resource payment, the FID payment, the first cargo payment and the right to the second resource assessment after production begins.

So the only people being screwed here are the IOC shareholders. At the present time we own all of the above. We are just not being paid for all that OSH is getting. The IOC shareholders are getting another "transformational" deal.

'MRP' pid='70468' datel Wrote:OSH will be getting 40% of all those payments and Total gets 60% which is really just them not having to pay it.

This deal is unlike any I have ever heard of. Normally we should get a cash amount, a stock amount or some of both. But you can calculate what you are receiving. In this case we do not know what we are selling for. It may be $40.25/sh if the resource volume is 6.2 TCF. Or it may be some unknown amount higher at sometime in the future if the resource volume is higher. But we don't know when or how much we will receive on the buyout.

I don't remember ever selling anything that I did not know the amount I was selling for.

'petrengr1' pid='70470' datel Wrote:

This deal is unlike any I have ever heard of. Normally we should get a cash amount, a stock amount or some of both. But you can calculate what you are receiving. In this case we do not know what we are selling for. It may be $40.25/sh if the resource volume is 6.2 TCF. Or it may be some unknown amount higher at sometime in the future if the resource volume is higher. But we don't know when or how much we will receive on the buyout.

I don't remember ever selling anything that I did not know the amount I was selling for.

In a way, we've done it before with the SPA for PRL15, but not for the whole company.

Do you think Phil has a point when he argues that there might be a large gap between the interim certification and the final certification (under the SPA)?

Phil seems to argue the latter, executed a couple of years into production, could be much higher at 12 or even 15Tcf, versus 7Tcf now (these were the figures he mentioned, if my memory doesn't deceive me).

'petrengr1' pid='70470' datel Wrote:

[quote='MRP' pid='70468' dateline='1464122887'] OSH will be getting 40% of all those payments and Total gets 60% which is really just them not having to pay it.

This deal is unlike any I have ever heard of. Normally we should get a cash amount, a stock amount or some of both. But you can calculate what you are receiving. In this case we do not know what we are selling for. It may be $40.25/sh if the resource volume is 6.2 TCF. Or it may be some unknown amount higher at sometime in the future if the resource volume is higher. But we don't know when or how much we will receive on the buyout.

I don't remember ever selling anything that I did not know the amount I was selling for.

******

Yes.  And how much faith do you have in the fairness of the upcoming certigfication after learning of the behind the scenes "cooperation" between TOT and OSH to get this deal done (at the expense of shareholders)?  Before, we had TOT picking an appraiser and IOC picking the other one.  This protected IOC.  Now we will have TOT picking one and OSH picking the other...both of which will have to "pay more" with higher appraisals. 

I understand the concerns of the certification process, but there are two elements that lessen mine:

1. These firms put their reputation on the line, although the chosing of the firms isn't ruled by the SPA anymore, but it would look really bad if they chose firms outside of that shortlist from the SPA. Besides, two of these are already working at Elk/Antelope for OilSearch own consumption.
2. They need to right-size the plant, if there is indeed a plant going to be constructed (I still assume so but not with absolute certainty).

My bigger worry, potentially, is losing the final resource certification as pointed out by Phil.

yep, we are all somewhat dazed and confused. This deal does not smell right.

I cant believe Oil search would attempt a takeover that includes a payment based on the Gross  resource size without being super confident

of their data.... If they are way wrong they could be in financial strife.

So , has Hession been wrong on the resource for the past three yars... hard to believe as he had all the testing and data.

Someone here speaks with a forked tongue.... lets hope its not Hession.

'admin' pid='70476' datel Wrote:

I understand the concerns of the certification process, but there are two elements that lessen mine:

1. These firms put their reputation on the line, although the chosing of the firms isn't ruled by the SPA anymore, but it would look really bad if they chose firms outside of that shortlist from the SPA. Besides, two of these are already working at Elk/Antelope for OilSearch own consumption.
2. They need to right-size the plant, if there is indeed a plant going to be constructed (I still assume so but not with absolute certainty).

My bigger worry, potentially, is losing the final resource certification as pointed out by Phil.

I'm afraid I have no idea, Katy. But Phil made the argument that the final certification, a couple of years into production, is likely to yield a substantially bigger resource number and we're giving that up in advance with this deal.

I have no idea whether he is right, but I do know it's not uncommon for gas resources to turn out to be considerably bigger after production has started. Gas that has been taken out can be replenished from lesser quality rock when the resource pressure lowers.