Hey, want a quick 33% profit?

**********

September 15, 2015

ACTION Buy InterOil Corp. (IOC) Return Potential:  33%

Equity ResearchReecent M&A highlights unrecognized value in PNG; up to CL-Buy Source of opportunity We add InterOil (IOC) to our Conviction List with a 12-mt PT of U$45.00/sh, (33% potential upside) given strong flow test results (Antelope-5 well), share price weakness and the recent takeover approach from Woodside for Oil Search (highlighting industry M&A interest in PNG gas assets).  We expect further well data, resource certification and a major payment from Total SA (GSe US$715mn) in the next 6-12mths. While the market has concerns with LNG & oil market weakness, IOC’s liquidity and uncertainty around resource size, we believe this is overplayed and see 95-105% risked upside in bull scenarios (9Tcf) vs. 15-25% risked downside in bear scenarios (6Tcf).

'Tree' pid='62778' datel Wrote:

Hey, want a quick 33% profit?

**********

September 15, 2015

ACTION Buy InterOil Corp. (IOC) Return Potential:  33%

Equity ResearchReecent M&A highlights unrecognized value in PNG; up to CL-Buy Source of opportunity We add InterOil (IOC) to our Conviction List with a 12-mt PT of U$45.00/sh, (33% potential upside) given strong flow test results (Antelope-5 well), share price weakness and the recent takeover approach from Woodside for Oil Search (highlighting industry M&A interest in PNG gas assets).  We expect further well data, resource certification and a major payment from Total SA (GSe US$715mn) in the next 6-12mths. While the market has concerns with LNG & oil market weakness, IOC’s liquidity and uncertainty around resource size, we believe this is overplayed and see 95-105% risked upside in bull scenarios (9Tcf) vs. 15-25% risked downside in bear scenarios (6Tcf).

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So Hession is spending all next week in the US meeting with investors.  He could market anytime - why now?  My guess he is there to  1) will discuss Ant 4 ST results with a press release sometime (Monday?)  2) Solicit investor input prior to any M&A discussion  3) Get the stock up so any discussions don't start at $35,  4)  Meet with energy investment bankers to discuss strategy  5) Lunch with his new best friend Stevie Cohen

Geez the SHU board voted 12 T's . How come Goldman didn't model that number ?didn't Calio say at least 9 T's for the Sept 21st call??

*******

Although it is conceivable that there might actually be 12T's, I think it's naive to think that IOC will end up getting paid based on that figure.  Don't we all anticipate a higher estimate and a lower estimate by the two entities?  Those numbers will be averaged.  If either party has any ability to influence/manipulate an estimate at all, I would presume it would be TOT. 

If there's actually 10T's in the ground and IOC's estimator says so, I would not be surprised to see TOT's selection come in considerably lower.  There are hundreds of millions of dollars at stake.   

'CAC' pid='62788' datel Wrote:

Geez the SHU board voted 12 T's . How come Goldman didn't model that number ?didn't Calio say at least 9 T's for the Sept 21st call??

*******

Although it is conceivable that there might actually be 12T's, I think it's naive to think that IOC will end up getting paid based on that figure.  Don't we all anticipate a higher estimate and a lower estimate by the two entities?  Those numbers will be averaged.  If either party has any ability to influence/manipulate an estimate at all, I would presume it would be TOT. 

If there's actually 10T's in the ground and IOC's estimator says so, I would not be surprised to see TOT's selection come in considerably lower.  There are hundreds of millions of dollars at stake.   

While it's entirely conceivable that the two reports will differ, these are organizations with reputations at stake and the reports will be available to many, I don't think its likely they will be doctored in any way.

'admin' pid='62789' datel Wrote:

[quote='CAC' pid='62788' dateline='1442328607']

Geez the SHU board voted 12 T's . How come Goldman didn't model that number ?didn't Calio say at least 9 T's for the Sept 21st call??

*******

Although it is conceivable that there might actually be 12T's, I think it's naive to think that IOC will end up getting paid based on that figure.  Don't we all anticipate a higher estimate and a lower estimate by the two entities?  Those numbers will be averaged.  If either party has any ability to influence/manipulate an estimate at all, I would presume it would be TOT. 

If there's actually 10T's in the ground and IOC's estimator says so, I would not be surprised to see TOT's selection come in considerably lower.  There are hundreds of millions of dollars at stake.   

While it's entirely conceivable that the two reports will differ, these are organizations with reputations at stake and the reports will be available to many, I don't think its likely they will be doctored in any way.

******

"Doctored" might be a little strong.  But this is not an exact science and there is a range wherein reasonable minds could plausibly (and defensibly) differ.  TOT may hire one of these firms another 20 times over the next decade...and I presume the firms like getting hired.  So, seeing one come in on the lowest point within the "reasonable range" does not seem far-fetched to me.  

If the two estimates come in within 10% of each other I will gladly stand corrected.