AND we won't get properly compensated for the E/A Gas Certification.
I want to see a sweetened deal ... I don't want to kill the deal.
The deal should have a minimum value of US$ 85 per IOC share; NOT THE US$ 64 per IOC share that we're getting
1. Percentage ownership of OSH
Look at the Market Caps of the two companies prior to acquisition:
InterOil: $1.55 Billion
Oil Search: $7.51 Billion
By simple 3rd Grade Math: (1.55) / (1.55 + 7.51) = 17.1%
Since this is a takeover, we should be getting a minimum premium of 25% which brings IOC up to $1.55 Billion x 1.25 = $1.94 Billion
Doing the math again gives us a MINIMUM percentage ownership of the "merged" company of: (1.94) / (1.94 + 7.51) = 20.4%
WHY DID IOC'S BOD AGREE TO US HAVING ONLY 14% ownership of OSH?
Considering we're getting NOTHING for our ownership of 6 Tcfe gas in TBRW, I think we should get 25% ownership of Oil Search
2. Payment for E/A Reserves
We IOC Shareholders, as the owners of all InterOil's Assets, were to be paid directly by TOTAL after the Certification was compleed. The payment Tranches were to be:
US$ 0.60 for each mcfe of 2C Reserves in excess of 3.5 Tcfe to a maximum of 5.4 Tcfe
US$ $ 0.80 for each mcfe of 2C Reserves in excess of 5.4 Tcfe up to a maximum of 6.5 Tcfe
US$ 1.00 for each mcfe of 2C Reserves in excess of 6.5 Tcfe with no maximum
INSTEAD, we will get 1 CVR for each IOC share we currently own that will pay us US$ 0.77 per mcf of 2C Reserves in excess of 6.2 Tcfe
This is not high enough to my opinion.
WHY DID IOC's BOD AGREE TO US GETTING PAID ONLY US$ 0.77 per mcfe?
I think we should get paid the full US$ 1.00 per mcfe for 2C Reserves in excess of 6.2 Tcfe. After all, we're getting paid later than promised because TOTAL and OSH are responsible for the delays.
That comes to US$ 7.85 for each Tcfe above 6.2 instead of US$ 6.05 - - - prorated, of course, which means 0.1 Tcfe pays US$ 0.785 per mcfe, etc
