Posts: 574
Threads: 27
Joined: Nov 2012
Reputation:
101
06-23-2013, 05:33 AM
(This post was last modified: 06-23-2013, 05:37 AM by kommonsents.)
(06-23-2013, 02:47 AM)admin Wrote:
(06-23-2013, 02:09 AM)sydbod 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:
-
Derisk IOC's shares to a considerable extent (and thereby solicit more institutional buying)
-
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)
-
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.
It's quite easy to structure a deal that provides IOC with a share (20% to 30%) of a train at PNG LNG without changing the partnership structure of the present partners in trains 1 & 2.
For example, if IOC gets 20% of train 3 for their contribution, whatever that is, the present partnership would own the remaining 80% and each partner's share would be proportionate to its present share in the PNG LNG partnership. Even proportionate percentages could change in train 3 based on contributions. It's done all the time and I do not believe any of the partners would have any objection.
As others like to say, money talks. A partnership with IOC is MONEY!
Posts: 6,851
Threads: 697
Joined: Dec 2011
Reputation:
441
06-23-2013, 06:14 AM
(This post was last modified: 06-23-2013, 06:16 AM by Palm.)
Agree Kommon. We've shown here a couple of times recently where partners are different on subsequent trains. It's business and it gets figured out. If government were doing it all it would never happen, but this is big business. We'll see them get it figured out.
He who has developed the resource has a bit of say also.
Posts: 8,568
Threads: 1,342
Joined: Dec 2011
Reputation:
380
Ah to this STP I agree , will this be the case ?! At what percentage, even 20 percent participation is Billions per year for IOC , no wonder IOC called in the SEC for an investigation.
Posts: 485
Threads: 45
Joined: Mar 2013
Reputation:
57
'jft310' pid='24733' datel Wrote:. Fact at just $1 per mcf IOC is worth $11 Billion today.
Jft, could you please give your math or rationale for this valuation at $1 per mcf? Based on the way Interoil and others on this board calculate it, the worth would be more like only $5-6 billion. Are you throwing in your subjective views on what certain cash flows should be worth, etc.? Please give details. Thanks.
Posts: 41
Threads: 7
Joined: Mar 2013
Reputation:
6
'Movieguy' pid='24764' datel Wrote:
[quote='jft310' pid='24733' dateline='1371909910']. Fact at just $1 per mcf IOC is worth $11 Billion today.
Jft, could you please give your math or rationale for this valuation at $1 per mcf? Based on the way Interoil and others on this board calculate it, the worth would be more like only $5-6 billion. Are you throwing in your subjective views on what certain cash flows should be worth, etc.? Please give details. Thanks.
Keep in mind, that IOC does have some negotiating power to ask for a slice of any trains they would be selling their gas for, since it is most likely that , no IOC gas- no additional trains ( or at least no train w/o alot more drilling success and expense .). Better for OSH , Santos et al to get a percentage of 70-80 % of new trains ,than get nothing of no new trains. They don't need the same % of the new trains to come out winners.
Posts: 8,568
Threads: 1,342
Joined: Dec 2011
Reputation:
380
One has to make assumptions since the deal details are not revealed. Since IOC mgt two persons stated this is more than a NG deal then what does that mean??Tolling??LNG revenue??If so what rates and percentages. What value do you put on Triceratops. What value do you put on the condensates?Will IOC use those condensates at their refinery? Please feel free to fill in the answers and do your own calculations.
Posts: 1,670
Threads: 49
Joined: Jan 2012
Reputation:
91
'admin' pid='24756' datel Wrote:
'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:
-
Derisk IOC's shares to a considerable extent (and thereby solicit more institutional buying)
-
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)
-
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.
stp-Thanks for your post. The last paragraph was a "stand-out" . It seems that what IOC "does best" was pushed aside for too long a time imho. While Tuna , Wahoo ,Raptor/Duckbill and others are still "bridesmaids", someday they will become "brides". Can't wait ! (but I guess I will have to) . Have a good day.
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
You too, Sageo, yes the wait is frustrating, but they will continue to drill when all this is worked out, no doubt. These prospects are way too promising just to leave them alone..
Posts: 12,025
Threads: 1,809
Joined: Apr 2008
Reputation:
227
And that's another stylized fact, haha
Posts: 8,568
Threads: 1,342
Joined: Dec 2011
Reputation:
380
The cool thing is Exxon will pay for new wells in PRL 15 ,IOC has the rigs. More wells maybe 2-3 at E/A and then drill the 3 additional prospects within PRL 15. That drilling will not slow down a deal. And IOC will get some cash upfront to copay on Triceratops drilling.
|
