Cash -or- Non-Cash Considerations

[Tree]

More cash today?  Everyone understands cash today, it's better for today.

More non-cash considerations today.  Not everyone understands non-cash contributions today, but it's better for tomorrow.

I'd take less cash today for less expense later and a larger train ownership.  An in-kind gas contribution.

EnnerOle is apparently selling 1/2 of resource  in  their first PRL, first PRL of many.  Far from a 1-trick pony.

Maybe the non-cash considerations will trump the cash?  I hope we get an LNG boat-load of N-CC's.

Which way better positions the Gov't for buy-in and back-in obligations?

Hmmmmmm......

[strategyguy536]

More cash today?  Everyone understands cash today, it's better for today.

More non-cash considerations today.  Not everyone understands non-cash contributions today, but it's better for tomorrow.

I'd take less cash today for less expense later and a larger train ownership.  An in-kind gas contribution.

EnnerOle is apparently selling 1/2 of resource  in  their first PRL, first PRL of many.  Far from a 1-trick pony.

Maybe the non-cash considerations will trump the cash?  I hope we get an LNG boat-load of N-CC's.

Which way better positions the Gov't for buy-in and back-in obligations?

Hmmmmmm......

Even in a world that does not exist-- having nearly perfect information and great foresight-- sometimes it is hard to know which alternative of these is best.  And it may be even harder for the experts to explain to the decision makers.  This is not a simple NG sale, as you state.

These considerations may well be part of why all is not yet finalized.  Let's say that IOC and XOM entirely agree at this moment to formulas, terms and conditions on a combo of front end cash and many operational and financial tradeoffs over a longer term.  Geting to that point alone took time.

There are then partners and the PNG govt. as stakeholders to include in the mix, and they may not see the various terms in the same light.  Next, any little changes to accommodate various interests will ripple through what some have described as a 1200 page document, with various lawyers, accountants and microeconomists, and senior managers providing assessment, input, and editing.

Getting it right upfront is very important.  A common understanding, mutual good will and trust, and a sense of fairness should result from a good deal and a good contract.  Legislation in contrast is often the lesser of several evils, and its process has been described as a lot like making sausage, something one should not wish to see.  The USA's "Obamacare" is a great example of how NOT to do it, so as to have a tangled mess years later.

I'd like to see that all parties take the time to get this right the first time.  The resources and intentions are there, let's make a complex deal or deals as clear as possible and as lucrative for the long term.

[Movieguy]

"A bird in the hand is worth two in the bush."

[Palm]

Then you have some of the hard facts that make up petroleum deals. The average petroleum deal is made up of some 130 different contracts between all of the groups involved. And we know that the LNG contracts are some of the most complicated, and contracts with the government(s) involved are not far behind. We know that these discussions involve the PNG government because both IOC/Exxon and the PNG government (outside of in-the-dark Duma) have acknowledged that they have had many discussions with the government. To expect all of this to happen in 30 or even 60 days is a bit unrealistic. When Exxon bought XTO Energy the decision to approach XTO was made in July and the deal was announced in December. Both Exxon and XTO were (are as XTO is now a subsidary of XOM), US based fortune 500 companies.

The fact that Exxon stated that the major terms have already been agreed to is huge as for them to say anything regarding a negotiation process takes many levels of approval. But it doesn't necessarily mean all formal contracts have been worked through and finalized by ALL necessary parties. I'd love for this to be done yesterday, but I know that's very unrealistic when you understand the complexity of these deals and ALL of the parties involved.

[kommonsents]

"A bird in the hand is worth two in the bush."

I have always found that one hand in the bush was more than enough.

[Palm]

In deal negotiations like this it's been said that a bird in the hand for one is a snake in the grass for the other. When you have upwards of 100 contracts to put together and review between many parties, you better be sure that the bird is real and will live beyond the time it takes the ink to dry.

For those willing to take the time, this link has a PDF document within entitled, "Oil Contracts- How to Read and Understand Them. It was put out last November and notes that these contracts now also apply to natural gas. Even a quick skim gives one an idea of what it takes for the may parties involved to finally sign on the dotted line.
http://openoil.net/2012/11/06/oil-contra...m-out-now/

[ellerslick]

In deal negotiations like this it's been said that a bird in the hand for one is a snake in the grass for the other. When you have upwards of 100 contracts to put together and review between many parties, you better be sure that the bird is real and will live beyond the time it takes the ink to dry. For those willing to take the time, this link has a PDF document within entitled, "Oil Contracts- How to Read and Understand Them. It was put out last November and notes that these contracts now also apply to natural gas. Even a quick skim gives one an idea of what it takes for the may parties involved to finally sign on the dotted line. http://openoil.net/2012/11/06/oil-contra...m-out-now/

In fact this is so complex it will take forever.

[Tree]

In deal negotiations like this it's been said that a bird in the hand for one is a snake in the grass for the other. When you have upwards of 100 contracts to put together and review between many parties, you better be sure that the bird is real and will live beyond the time it takes the ink to dry. For those willing to take the time, this link has a PDF document within entitled, "Oil Contracts- How to Read and Understand Them. It was put out last November and notes that these contracts now also apply to natural gas. Even a quick skim gives one an idea of what it takes for the may parties involved to finally sign on the dotted line. http://openoil.net/2012/11/06/oil-contra...m-out-now/

In fact this is so complex it will take forever.

Chin up Eller!

Remember, Palm's link is only 'how to read and understand' Oil contracts.  I'm sure creating an LNG agreement with multiple partners in likely a few languages and a couple of Gov'ts using templates of the world's largest company designed to make XOM look good will speed up the process.  It's a snap.

The hard part is over...... Convincing XOM that the well Phil sank in the middle of absolutely nowhere cannibal-ville, where other's failed, does hold at least 4.6T's gas for their purchase.

[Palm]

In fact these agreements have been negotiated for many decades and the deals get done. But Exxon is primarily running this show and they are like any large multinational company; they are deliberate and very experienced. And they don't make many mistakes. And when it is done, all parties involved better be able to execute on time.

[Tree]

In fact these agreements have been negotiated for many decades and the deals get done. But Exxon is primarily running this show and they are like any large multinational company; they are deliberate and very experienced. And they don't make many mistakes. And when it is done, all parties involved better be able to execute on time.

And the gal helping keep it all straight:

http://shareholdersunite.com/mybb/showth...p?tid=1476