Woodside Petroleum Offers $8.1 Billion for Oil Search

[jft310]

Palm- whoever makes the first bid , it will not be the final offer . A bidder better know their max number cause they will find themselves in a war . How do we know this ?? Look at the monster investment banks who follow little ole Interoil , their coverage gives them access and more than one monster bank will sell Interoil to their client as a good buy . The banks are following Interoil to make money . I doubt if Total makes the first move for the reasons I stated but that's not to say they will not be a bidder . Yes I expect an offer near certification . Will the offer be sweet enough to get BOD approval then shareholders interest . ?
A low ball goes no where that's why they ran all the seismics outside PRL-15. So they have reasons to hold on as an independent firm . Develop the assets do more sell downs . Will they get the chance? Will the government protect Interoil? These Super Majors all left PNG in the past and Interoil stayed and found all these assets . That has never been forgotten . The government is a hurdle .

[Palm]

Not telling me anything I don't already know JFT.

[Getitrt2]

The certification payment from Total pays for its 40/31% in PRL 15; it gets it zero ownership interest in InterOil and its various ownership interests. I doubt anyone here knows what is "in Total's mind".

I think the dollar investment/risk may be a more important threshold than the percentage, such as 40%.

I think whether a merger with OSH would be good for IOC shareholders depends on the terms, and I think IOC's much greater prospective resources would reduce the probability of its getting full value and being beneficial for shareholders in the long term.

[jft310]

Without drilled wells looking at GCA type reports one doesn't get paid on those assets . Depends on what Interoil certifies . If it's equal or better than Oil Search's 9 T's there is something to talk about .Some oil and gas stocks are sold on a deal price plus then paid on production of assets . The more you produce the more you get paid . Hession had his version of that with the Total 2 payments deal . Oil Search has the production and Interoil the assets they need. Could they merge??What percentage ?It's possible.

[Kaliboo]

Palm- whoever makes the first bid , it will not be the final offer . A bidder better know their max number cause they will find themselves in a war . How do we know this ?? Look at the monster investment banks who follow little ole Interoil , their coverage gives them access and more than one monster bank will sell Interoil to their client as a good buy . The banks are following Interoil to make money . I doubt if Total makes the first move for the reasons I stated but that's not to say they will not be a bidder . Yes I expect an offer near certification . Will the offer be sweet enough to get BOD approval then shareholders interest . ? A low ball goes no where that's why they ran all the seismics outside PRL-15. So they have reasons to hold on as an independent firm . Develop the assets do more sell downs . Will they get the chance? Will the government protect Interoil? These Super Majors all left PNG in the past and Interoil stayed and found all these assets . That has never been forgotten . The government is a hurdle .

So Total owns part of EA and will be paying more upon recertification.  They also are now the operator.  What recourse do we have if Total changes their mind and chooses to not move forward?  I think when an operator fails to operate, then partners can take over that role.  But we're not going to build an LNG plant.  But what if Total wants to simply delay.  Can we stop that?  I've forgotten the SPA terms.  Anyone recall.  Yeah I know the govt won't like it.  But what recourse does IOC have?  Thanks

[Putncalls]

Here is what Pavel said to me:
At $50 oil, LNG economics worldwide would be subpar, and IOC’s LNG project is no exception. That’s one reason why we certainly don’t look at $50 oil as something that will continue forever. But, in any case, let’s underscore that IOC’s resource selldown to Total – which will hopefully result in a $1 to $2 billion cash payment by mid-2016 – is an entirely separate matter. Total is contractually obligated to buy this gas resource, no matter what. The decision on whether to proceed with the actual project construction will probably not be made until 2017, after the resource selldown is completed.

[Getitrt2]

Without drilled wells looking at GCA type reports one doesn't get paid on those assets . Depends on what Interoil certifies . If it's equal or better than Oil Search's 9 T's there is something to talk about .Some oil and gas stocks are sold on a deal price plus then paid on production of assets . The more you produce the more you get paid . Hession had his version of that with the Total 2 payments deal . Oil Search has the production and Interoil the assets they need. Could they merge??What percentage ?It's possible.

Of course it's POSSIBLE they could merge, but you helped make my point, in saying one doesn't get paid on those (prospective) assets; and IOC has a great deal more of those than OSH, making it a worse deal for IOC shareholders and less likely.

Woodside is going for the birds in hand and the other birds more visible and closer, and hoping to take advantage of the difficulty OSH may have funding its interests in two major projects, and doing so with no significant amount of other gas interests to sell.

[Getitrt2]

Here is what Pavel said to me: At $50 oil, LNG economics worldwide would be subpar, and IOC’s LNG project is no exception. That’s one reason why we certainly don’t look at $50 oil as something that will continue forever. But, in any case, let’s underscore that IOC’s resource selldown to Total – which will hopefully result in a $1 to $2 billion cash payment by mid-2016 – is an entirely separate matter. Total is contractually obligated to buy this gas resource, no matter what. The decision on whether to proceed with the actual project construction will probably not be made until 2017, after the resource selldown is completed.

That aspect of the cash coming due to IOC is an extremely important factual point that I think most here already understand, but which I doubt is fully understood in the market, as reflected, or perhaps I should say not fully reflected, in the share price.

Perhaps I should mention, by the way, that Pavel appeared on CNBC today, with a corner insert showing three stocks he was recommending, Occidental, Marathon, and InterOil.  The interviewer discussed the first two with Pavel, then ended the interview without any discussion of IOC, probably because of a policy of not mentioning on air stocks below a minimum market cap.