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'admin' pid='24742' datel Wrote:["To bring in new partners into the PNGLNG project is almost impossible with the current mix of partners, no matter what Exxon may or may not want."] Apparently, Exxon has a different opinion..
I can only talk from my understanding of what has been officially stated so it should not be taken as 100% accurate by any stretch of the imagination.
My understanding from what Exxon has publically stated, from what OSH has publically stated, and from what santos has publically stated is that the Exxon/IOC gas will be processed at the PNGLNG plant. There always has been the option for that sort of activity to happen at the PNGLNG plant.
To maximise returns on investment the goal is to expand the PNGLNG plant as fast as possible and none of the partners are against this.
IOC does not have the billions to actively buy their way into a share of PNGLNG plant.
OSH, Santos, Exxon and the others will not dilute their own share of the plant for an outside new partner. (money talks).
I have not seen any official Exxon release that makes me think Exxon has a different opinion.
We will see once all the information is released (I may have egg on my face then) but for now I can not agree with your interpretation of what Exxon intends.
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[quote='admin' pid='24742' dateline='1371913842'] ["To bring in new partners into the PNGLNG project is almost impossible with the current mix of partners, no matter what Exxon may or may not want."] Apparently, Exxon has a different opinion.. [/quote
STP-Please provide an Exxon link to your statement . Not a Citi link or a WM link but an Exxon link. or well its just your opinion.
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'sydbod' pid='24746' datel Wrote:
'admin' pid='24742' datel Wrote:["To bring in new partners into the PNGLNG project is almost impossible with the current mix of partners, no matter what Exxon may or may not want."] Apparently, Exxon has a different opinion..
I can only talk from my understanding of what has been officially stated so it should not be taken as 100% accurate by any stretch of the imagination.
My understanding from what Exxon has publically stated, from what OSH has publically stated, and from what santos has publically stated is that the Exxon/IOC gas will be processed at the PNGLNG plant. There always has been the option for that sort of activity to happen at the PNGLNG plant.
To maximise returns on investment the goal is to expand the PNGLNG plant as fast as possible and none of the partners are against this.
IOC does not have the billions to actively buy their way into a share of PNGLNG plant.
OSH, Santos, Exxon and the others will not dilute their own share of the plant for an outside new partner. (money talks).
I have not seen any official Exxon release that makes me think Exxon has a different opinion.
We will see once all the information is released (I may have egg on my face then) but for now I can not agree with your interpretation of what Exxon intends.
At just a $1 per mcf will receive Billions in an Exxon deal. And exactly what will IOC do with that money.????What IOC can do is offer in kind NG for a buy into the plant. Ya see money talks. Which is where the talk of second train from IOC to Exxon may lay today. Subject to negotiations.
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Although I have a feeling you're being ironical here, nevertheless; would they be in talks, let alone in exclusive talks, if they didn't think it was feasible to engage IOC in supplying gas to an additional train(s)?
I guess if one like conspiracy theories, one could argue they just want to stall IOC as a competitor, but would IOC fall for that, and would it be in their interest? Bigger plant means bigger sales, profits. The nice thing about capitalism that it usually isn't a zero sum game, both parties profit from a transaction.
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06-23-2013, 01:50 AM
(This post was last modified: 06-23-2013, 01:55 AM by sydbod.)
'Investor1979' pid='24744' datel Wrote:
OSH may be cashstrapped, but, Total isn't. If they are spending on seismic surrounding IOC's discoveries , they obviously would " love " to have IOC's currently certfied resources, since they may have already made a bid. As a financial decision, it appears that it would be the much better decision to buy all of IOC, than just some of its assets. i.e. Paying only $200 /share would be paying about $1.70 a certified mcf. Plus you get the bulk of TRI for free ,plus the refinery and all other potential targeted fields. Very attractive to OSH/TOTAL or any number of many cash heavy majors, NOCs, etc.
This is just an assumption, and then a line of reasoning is developed from that assumption.
I can just as easily argue that the seismic work being carried out is "obviously" to see if an early start could be feasible for a joint venture new LNG plant between IOC / OSH/ Total as partners. (this is what I think has a high posibility to happen)
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sydbod-Excellent thoughts you have here.
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@ admin,
I have faith that it is a valid deal being worked out between IOC and Exxon, and yes the gas will in all probability be processed at the PNGLNG plant.
I just worry that the big money many of us are waiting for, for that gas will not come in as one big chunk, but will be paid over the life of the delivery of the gas with a much smaller chunk at the beginning. (I am a born pessimist )
@ jft310,
Gas for 2 trains for PNGLNG may be enough to purchase in a share in the plant, but it would only be a small share and probably not as profitable for IOC in the long run as a new LNG plant venture.
We are all speculating here, so anything is possible. Maybe we should just wait for official news before we become too hung up on our own pet theories.
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sydbod-I can say with 100% certainty that IOC would like to participate in PNGLNG and its being talked about. When the deal news came out it was said by IOC mgt two persons this was not just a NG deal.But no details. Several possibilities.
In my opinion IOC might be able to do both get continual revenue from the sale to Exxon and a seperate deal with OSH/.TOT for a deal at Triceratops.
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@ jft310,
Thanks for that reply.
I am also leaning towards what you just said, but it is just a private opinion, I can not join up all the dots 100% to confirm it.
I just feel that the price that IOC would have to pay for a slice of PNGLNG may be a bit too high.
The IOC/ OSH/ Total deal (should it happen) looks a lot more valuable in the long run to my way of thinking, but we will see.
Lets hope that whatever outcome does happen we will all be happy.
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'sydbod' pid='24753' datel Wrote:@ admin, I have faith that it is a valid deal being worked out between IOC and Exxon, and yes the gas will in all probability be processed at the PNGLNG plant. I just worry that the big money many of us are waiting for, for that gas will not come in as one big chunk, but will be paid over the life of the delivery of the gas with a much smaller chunk at the beginning. (I am a born pessimist ) @ jft310, Gas for 2 trains for PNGLNG may be enough to purchase in a share in the plant, but it would only be a small share and probably not as profitable for IOC in the long run as a new LNG plant venture. We are all speculating here, so anything is possible. Maybe we should just wait for official news before we become too hung up on our own pet theories.
Well, my own pet theory is fairly unassuming, as it happens. I believe in the quality and quantity of E/A (everything starts from there) and as a result, there will be parties interested in partnering with IOC. Since they need a partner, I believe there is ample scope for reaching agreement, especially with Exxon as negotiations with them have unusually large margins due to the fact that it's much cheaper (and faster) to build additional trains compared to building a plant from scratch. I also assume that a deal will:
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Derisk IOC's shares to a considerable extent (and thereby solicit more institutional buying)
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Set the clock ticking toward monetization of gas and liquids (that is, slowly reducing the discount for their first cash flow, thereby slowly increasing the value of the company)
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Provide IOC funds for accelerated exploration (there is a pretty good chance they'll find more intersting stuff)
I simply work on the basis of some fairly simple stylized facts, stuff that, while perhaps not 100% proven, all available info points at having a high degree of probability. The stylized facts here are the quality and quantity of E/A and the merits of adding a train to an existing plant versus building a new plant, but I believe these are as good as facts.
I have uttered some reservations about Exxon's partners possibly not being too happy about this before, but since I don't have insight in their mutual legal obligations (nor am I a legal expert), it remained with some utterances. The fact that Exxon is in exclusive talks tells me they are likely to regard a deal as acceptable to their partners, although perhaps after some sweetners.
Whether there will be a large up-front payment, I have no way of knowing. I don't really care all that much either, to be honest, as long as IOC can do what they do best, exploration. I would like multiple wells drilling and Pet meticulously going over drilling reports.
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