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+--- Thread: RJ downgrades IOC to Market perform(3) (/showthread.php?tid=10743)
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RJ downgrades IOC to Market perform(3) - TomCrooz - 06-17-2016
Pavel downgrades based on stock going nowhere until certification. Says to hold CVR till cert. Also says CVR could be worth $24. Why downgrade a potentioal 57% upside in 12-15 months Pavel?
RE: RJ downgrades IOC to Market perform(3) - Palm - 06-17-2016
He must also be part of the conspiracy!! He'll need security next.
RE: RJ downgrades IOC to Market perform(3) - ArtM72 - 06-17-2016
On a separate thread JFT posted a link of an analysis from Oxford Energy. https://www.oxfordenergy.org/wpcms/wp-content/uploads/2016/04/Asian-LNG-Demand-NG-106.pdf. One of my takeaways from that study is that, just as we've been told for years now, long term LNG contracts start disappearing quickly after 2020. Even while global LNG usage growth has slowed in the past 5 years it continues to take market share from coal and oil in most markets.
Pavel has authored many opinions on IOC with forecast market prices significantly greater than today's. Maybe Pavel's always been of the herd mentality, but whether he is or not, there is a market for Papua LNG's gas post 2020. Gas is not a renewable resource. Fields decline. Populations, whether they are growing or not, are driven by the improvements in the quality of life afforded by cheap, clean energy. Of all the hydrocarbon driven machines, those energized by natural gas are the cheapest to build and maintain.
The only pushback on NG use I see is the cost of the "last mile" facilities needed to deliver it to the customer. That didn't dissuade US consumers from building a huge network of pipelines, or European users. I doubt it will hold back Asia either.
RE: RJ downgrades IOC to Market perform(3) - jft310 - 06-17-2016
My guess is the first development we see is the extra train with Exxon We just want a larger slice of the pie .
RE: RJ downgrades IOC to Market perform(3) - ArtM72 - 06-17-2016
'jft310' pid='72354' datel Wrote:My guess is the first development we see is the extra train with Exxon We just want a larger slice of the pie .
There would be some irony in that given the length of time that notion has stood as the most logical progression of E/A development.
RE: RJ downgrades IOC to Market perform(3) - Putncalls - 06-17-2016
I don't know how one "holds the CVR"? RJ says:
Following the May 19 announcement that InterOil is being acquired by Oil
Search, the main near-term question has been: would IOC shareholders endorse this deal, or
instead go in a different direction as advocated by former CEO Phil Mulacek? This week the
question was answered as Mr. Mulacek lost the proxy fight for board control, and shareholders
delivered what can be seen as a decisive endorsement of the buyout. Following this, we are
downgrading InterOil to Market Perform from Outperform. From now until the expected deal
closing in 3Q, IOC shares will remain locked in arbitrage with Oil Search shares, reflecting the
fixed equity payment plus a small sub-$5 premium for the future contingent value right (CVR).
To be clear, we think the ultimate value of the CVR will end up being much higher than what is
currently priced in, thus we recommend IOC investors to hold their CVRs until resource
certification in 2017. However, since that amount will not be clear until long after the deal
closes, as a tactical matter, it is hard to see much outperformance in IOC shares between now
and deal closing.
Management decisively
RE: RJ downgrades IOC to Market perform(3) - katytrader - 06-17-2016
'Putncalls' pid='72368' datel Wrote:I don't know how one "holds the CVR"? RJ says: Following the May 19 announcement that InterOil is being acquired by Oil Search, the main near-term question has been: would IOC shareholders endorse this deal, or instead go in a different direction as advocated by former CEO Phil Mulacek? This week the question was answered as Mr. Mulacek lost the proxy fight for board control, and shareholders delivered what can be seen as a decisive endorsement of the buyout. Following this, we are downgrading InterOil to Market Perform from Outperform. From now until the expected deal closing in 3Q, IOC shares will remain locked in arbitrage with Oil Search shares, reflecting the fixed equity payment plus a small sub-$5 premium for the future contingent value right (CVR). To be clear, we think the ultimate value of the CVR will end up being much higher than what is currently priced in, thus we recommend IOC investors to hold their CVRs until resource certification in 2017. However, since that amount will not be clear until long after the deal closes, as a tactical matter, it is hard to see much outperformance in IOC shares between now and deal closing. Management decisively
I guess he thinks the CVRs will be tradeable (?)
RE: RJ downgrades IOC to Market perform(3) - jft310 - 06-17-2016
Botten stated on the slides they would apply for an ASX listing for the CVR's . Maybe we get drilling reports on Ant 7 , If we hit the dolomite again it bodes well for a nice resource payment . That drilling information could be available well before the finished appraisal ,
RE: RJ downgrades IOC to Market perform(3) - oliver.gump - 06-17-2016
'jft310' pid='72371' datel Wrote:Botten stated on the slides they would apply for an ASX listing for the CVR's . Maybe we get drilling reports on Ant 7 , If we hit the dolomite again it bodes well for a nice resource payment . That drilling information could be available well before the finished appraisal ,
If they hit dolomite again... we will never hear about it. the OSH/TOT goal right now is a low cert number. They will be carefully spoon-feeding the estimators and ensuring that they produce the numbers that best suit OSH and Total.
RE: RJ downgrades IOC to Market perform(3) - ArtM72 - 06-17-2016
1. Vote no.
2. Shut down remaining contract operations.
3. Negotiate A7 carry swap for A South carry IF cancelling A7 for immediate certification is not possible.
4. Claw back Hession bonuses and salary to the greatest practicable extent
5. Hope that when A7 finally gets drilled it finds a lot of dolomite.