XOM seeks 4.6 T - Major Terms Agreed To

[Palm]

The point is we didn't get a /mcf number from IOC. And when the PRE deal was first announced we DID have a flurry of estimates. Even from $2.85 to $3.85 is a pretty good swing percentage-wise. But (again initially) bonk and others highly discounted what the /mcf was. I'm saying when we first get the dollars Exxon is putting in there will be some time before anyone settles on a "reasonable" /mcf amount, but it won't likely come from IOC.

[jft310]

Palm is right on-At least two analyst will compute the math on the deal.
None of which matters.
What matters??
A deal with Exxon
Monetization of the assets
Early cash flows.
The right to go it alone with anyone we chose
Drilling Fund
No dilution
Booking of assets
Cash on balance sheet
And more

[Palm]

Exactly JFT. The real things to be concerned with are what IOC gets up front etc and will they get to the production phase and generate cash flows without needing to dilute shares? I doubt they are negotiating a /mcf price as much as here is the plan, here are the estimated costs for this and that, here is what we (Exxon) will pay as our share and what we will pay and carry for your share. There are too many variables and unknowns to initially come up with a /mcf price that means a whole lot.

IOC did state a /unit price in the initial PR with PRE but then it said less this and less that and that PAC LNG received a % commission under certain circumstances etc. So what was the net actual /unit price? Uhh not exactly sure, but by all accounts they received what they need based on the agreement negotiated with PRE.

Getting to production means everything and if they know the gross dollars likely needed to get there which will then allow them to get to the next level and provide a very good return to shareholders. Some will end up saying all in the mcf price is $1.25, others will say no, it's $2.50 because of this. OK who's right? Doesn't matter much as long as the "gross" deal negotiated gets it done.

[ebster123]

Palm is right on-At least two analyst will compute the math on the deal. None of which matters. What matters?? A deal with Exxon Monetization of the assets Early cash flows. The right to go it alone with anyone we chose Drilling Fund No dilution Booking of assets Cash on balance sheet And more

JFT, I do not disagree that in the long run what matters is this.  Given this, if IOC does not get a buyout from somewhere,  this will provide the launching pad for a fertile and prosperous future for us longs.  However, if one was looking for a rapid rise with buyout pps SOON I do not believe this is the way (unless we do get bought out).  I am fine with that and I have a long standing approach but the near term will still be met with pps manipulation and the sort until just before production.  Easy to ride the wave when you are in at $6.50 but not as easy who may have gotten in at $65.00.  Time will tell...