Dr Hession's trade

[Getitrt2]

The market thinks IOC is worth $48 as I type. So obviously someone disagrees with all of the analysts and since the article was written we are down further. Listening to all the excuses from everyone has become a tired joke. The most anyone should be looking out into the future for results is 12 months. In that time we'll know preemptive rights, whatever is going on with WBR and re-certification. Hession can't play games forever. Somewhere in there IOC will be bought out and there is nothing Hession can do about it but he is certainly doing his best to minimize the upside.

What "games" do you think Hession is playing?  Are you claiming he is deliberately "doing his best to minimize the upside"?

[CAC]

I agree, but a bidding war would not get the price over $100. I agree with mike. If a couple of major holders become disgruntled, we could see a sale. Even a $2.5B payment from Total does not get the stock price over $100.

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And it certainly doesn't if the payment isn't made "to shareholders".  The $500M they already got (which could have gone to shareholders as part of a buyout) is now being spent on expensive wells and ongoing operating costs.  I hope these wells are successful but I would like to think that Hession has a "cash out strategy" in mind if they are not...or actually...even if they are. 

[admin]

Payment to shareholders?? They're running a business that is VERY capital intensive, both the drilling and especially coughing up their part of an LNG plant requires billions. They're nowhere near in a position to make payments to shareholders.

Only in the most rosiest scenarios, if the recertification shows that E/A exceeds the GLJ figures and they make a couple of discoveries could they start to think about that, IMHO.

[CAC]

Payment to shareholders?? They're running a business that is VERY capital intensive, both the drilling and especially coughing up their part of an LNG plant requires billions. They're nowhere near in a position to make payments to shareholders. Only in the most rosiest scenarios, if the recertification shows that E/A exceeds the GLJ figures and they make a couple of discoveries could they start to think about that, IMHO.

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Sorry.  I articulated my point poorly.  I was not suggesting that IOC should have taken the cash payment and paid something to shareholders (i.e. Like a dividend).  I was saying that IOC could have solicited a buyout offer that would have passed the $500M through to us.  If TOT hypothetically valued IOC at 5B they could pay that all at once (in a buyout) or they could give us 500M as part of a transaction, IOC could spend the $500M on operations, and if there are no new discoveries...TOT is now only willing to spend 4.5B to buy us out.  That was not management's choice obviously and that is fine, but it is possible that they are spending part if our buyout money on a daily basis. If the wells "hit" it will have been a good decision.