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+--- Thread: Heres a scenario (/showthread.php?tid=1655)
Heres a scenario - jft310 - 09-22-2012
The Blair Price article must have some truth to it. One Analyst thinks this is whats going on. The PNG govt will buy 50% of PRL 15 from IOC. They own 22.5% already remember or buy an additional 27.5%. The rumored price is $2-3 to IOC for this 50% interest. Then the PNG govt will mark up the NG and sell some to Exxon at $4-6 per mcf and the PNG govt has some cash in the marked up price.They the PNG govt can keep some of the NG for domestic operations. The drilling partners still own with Civelli's 20% @22% and 18% will be clawed back to IOC after this transaction. They will get bought out by IOC but not at $2-3 but less.. And IOC will have the cash to develop Triceratops and drill ahead . See EWC at T-2. And someone else developing E/A besides IOC. Best guess today. Could hear more about this next several weeks. If the govt is the buyer they don't need NEC approval huh.
See Tree's buy out ideas in a seperate post.
RE: Heres a scenario - jft310 - 09-22-2012
Heres Trees interesting post earlier.
Looking like Buy-out attempt
After morning CC discussions this coud well be the begining of buy-out bidding.
The new article in whole makes no sense, in part it may. Money quote is:
“They are gearing up for some big announcement on Thursday which they will clearly try to dress up and say that the state will buy the gas at the same terms PRE paid, which the state may well try and hawk around for a carry on those terms but it will never get it,” the source said.
PNG needs present revenues. Future revenues do no good today and ultimately there will be several LNG/Oil projects throughout Gulf and Western Province.
What if PNG has a deal with, say RDS as they are obvious choice to deliver 50% of PRL15 at a discount $/M?
PNG owns 20% at no cost as State and the source alludes to PNG buying another 30% at PRE prices, giving PNG 50% of PRL15. Discount that $2.85? PRE price presently and cash out IOC. Phil would sell at those rates. PNG would then sell all or most of their 50% of the project at present value to Shell at much less than $2.85. PNG could be happy with almost giving away their initial 20% stake. This gives Shell half the project at way less than PRE prices, PNG is liquid and IOC has cashed out. Shell can say they didn't pay Phil's price as PNG's share lowers their $/M costs.
That would leave PAC LNG an option to sell out at same present value which they would likely do as it is based on PRE #s.
Net is IOC has minor stake at most in Gulf LNG or they sell all to Shell or whoever the buyer is.
IOC moves on T-2 with EWC/FLEX and is to market in 2015/16 if exploration is fruitful
RE: Heres a scenario - sltibbs - 09-22-2012
jft,
I appreciate you sahring what you hear, but I have a problem with this because it says to me that PNG is preventing IOC from selling directly to XOM.
Sam
RE: Heres a scenario - Palm - 09-22-2012
My only comment on this is that the 22.5% for sure the governmnet gets at sunk-cost, not market. I would hope that anything above that IOC would be able to sell to them at the $2-$3 price. From there it all gets more fuzzy. The 22.5% piece could still be back-end loaded out of production, but the balance would have to be cash it seems; PNG has no stock to give in exchange. "Soft loans" most likely from Japan/Korea, China etc, or do they have something else they can "exchange"?
RE: Heres a scenario - bertl05 - 09-22-2012
If that is the outcome, I think many long term holders would be quite disappointed.
RE: Heres a scenario - jft310 - 09-22-2012
Bert do the math, whats 27.5% of 9 T's.Thats 2 T's times $2 bucks or $4 Billion.If its $3 bucks that $6 Billion.
Buy out the left over partners and IOC has enought to drill all the rest of the prospects and to develop T-2,
Never forget T-2 is at least as large as E/A and some say twice as large and the then we can drill the rest of the prospects with 236 being the best they say.IOC would still own 48% of E/A.We are at 58% now less the 27.5 % plus the 18% buy back or @48%. We lose 10% of E/A and get the cash to go ahead. Not bad. appears Petromin wants to be the next Petronas.
RE: Heres a scenario - tarulestheday - 09-22-2012
'bertl05' pid='10167' datel Wrote:If that is the outcome, I think many long term holders would be quite disappointed.
I think longs would be better off with a total company buyout. PNG is really the winner in this scenario. Smells a bit like partial forced nationization of resources to me. I'm sure Phil doesn't like this deal but he may not have a choice.
RE: Heres a scenario - bertl05 - 09-22-2012
If XOM will pay $4-$6 from PNg Govt as you say, why leave $2-3 on the table? That seems like a terrible transaction. I doubt Phil would do that, IF in fact XOM has already expressed interest in an upfront Offtake at $4-$6. The PNG govt has less than no money, so either payment would be in the future, or XOM would pay PNG and then PNG pays IOC. If thats the case why not sell it directly to XOM? Is that price to get NEC approval? If so they are strong arming IOC. I dont like it one bit. But I think its highly unlikely anyway. I see JKM in for 20% their operator for 20% ( i think petronas) and the offtake going to kogas...perhaps all off it that isnt sold to XOM (If XOM is involved). I think the Govt of Japan and Korea provide IOC the funding. Perhaps Civelli and the other investors will sell their gas to PNG. Clean up the IOC stucture too.
I'd
RE: Heres a scenario - jft310 - 09-22-2012
'tarulestheday' pid='10170' datel Wrote:
'bertl05' pid='10167' datel Wrote:If that is the outcome, I think many long term holders would be quite disappointed.I think longs would be better off with a total company buyout. PNG is really the winner in this scenario. Smells a bit like partial forced nationization of resources to me. I'm sure Phil doesn't like this deal but he may not have a choice.
Taru I bet you are right long term IOC sells almost all of E/A before its all over in order to stay a seperate company and to develop their assets.Whats wrong with that??
RE: Heres a scenario - tarulestheday - 09-22-2012
'jft310' pid='10172' datel Wrote:Taru I bet you are right long term IOC sells almost all of E/A before its all over in order to stay a seperate company and to develop their assets.Whats wrong with that??
Nothing wrong with that, it all depends on the price paid.