Cash -or- Non-Cash Considerations

[ebster123]

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

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.

Palm,

  I both respect and appreciate your comments.  I am not aware of all the aspects and details of a LNG deal, let alone a very large LNG deal.  However, there seem to be a lot of individuals on both the long and short sides that do know these details.  Many of the longs I suspect are on this board.  If this is the case then why do we have repeated "knowledge" come out later or after the fact.  If this is known, expected or understood in a LNG deal then WHY wouldn't one if the people in the know share that ith fellow longs instead of sitting quiet while others publicly watch the 30 and 60 day windows come and go without the anticipated del.  This is not the first time this type of thing has happened and may be one of the reasons some on here get frustrated.  JMHO FWIW

[jft310]

I think things communication wise greatly prove with Tuesday's call. Everyone has the same questions

[Palm]

Ebster, this is not the first time this has been mentioned, even back in the Yazoo days and several times here on SHU. Some of these many contracts are somewhat boilerplate, some are not. Especially the complexity of LNG contracts has been mentioned many times over the last couple of years.

[Tree]

[quote='Movieguy' pid='26819' dateline='1376055521'] "A bird in the hand is worth two in the bush."

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.

Palm,

  I both respect and appreciate your comments.  I am not aware of all the aspects and details of a LNG deal, let alone a very large LNG deal.  However, there seem to be a lot of individuals on both the long and short sides that do know these details.  Many of the longs I suspect are on this board.  If this is the case then why do we have repeated "knowledge" come out later or after the fact.  If this is known, expected or understood in a LNG deal then WHY wouldn't one if the people in the know share that ith fellow longs instead of sitting quiet while others publicly watch the 30 and 60 day windows come and go without the anticipated del.  This is not the first time this type of thing has happened and may be one of the reasons some on here get frustrated.  JMHO FWIW

[/quote

eb,

such info has been on SHU and the zoo repeatedly.  LNG contract workshops are offered around the world. $6k to attend and get a base course in the world of 3000 page deals. Remember the 'oil is like dating and LNG is marriage' posts?  Oil goes anywhere easily while LNG is point to poing and requires billions in hardware and delivery guarantees,same with LNG feed gas. Posts of Conrad Kerr in cc expertly explaining how LNG is not timeline based but is checked box based. Problem is many dont study or remember or just miss all the great DD posts on SHU. Palms link to the enormity of contracts should not have come out of left field to anyone on this MB but it has. That explains frustration on part of those doing and sharing DD as well as those seeing that DD for the first time.

These facts help explain the volatility IMO

[ebster123]

Ebster, this is not the first time this has been mentioned, even back in the Yazoo days and several times here on SHU. Some of these many contracts are somewhat boilerplate, some are not. Especially the complexity of LNG contracts has been mentioned many times over the last couple of years.

correct, but we all here believe a healthy exchange is one that has all views (even if they are opposing).  So why didn't anyone say this back when, or did I miss it.....

[kommonsents]

Please correct me if I'm wrong, aging memory and all that....

But, aside from O'Neill's comment, wasn't the 30 to 60 day window in reference to "we should know more in 30 to 60 days" and not a "the deal should be done in 30 to 60 days"?

I don't recall hearing any real hint on timing of completed deal expectations from IOC, XOM or anyone else on their teams.

We also do not know that the "deal" has not been agreed to by the principals and is only waiting on PNG government to run the completed deal through their approval process.

Or am I missing something?

[ebster123]

Please correct me if I'm wrong, aging memory and all that.... But, aside from O'Neill's comment, wasn't the 30 to 60 day window in reference to "we should know more in 30 to 60 days" and not a "the deal should be done in 30 to 60 days"? I don't recall hearing any real hint on timing of completed deal expectations from IOC, XOM or anyone else on their teams. We also do not know that the "deal" has not been agreed to by the principals and is only waiting on PNG government to run the completed deal through their approval process. Or am I missing something?

i do not recall XOM or IOC saying 30-60 days either.  However, I don't recall people trying to correct the repeated comments about 30-60 days.  Just commenting not biotching.  I will hold my stock and wait like everyone.

[Getitrt2]

We have heard some indications/opinions from both within and outside the Company that there was a reasonable possibility of the deal being done in 60 days, although that was not a deadline.

Did anyone on this board express the opinion in late May or early June that it would NOT be done in 60 days or close to that?

[Palm]

Ebster, this is not the first time this has been mentioned, even back in the Yazoo days and several times here on SHU. Some of these many contracts are somewhat boilerplate, some are not. Especially the complexity of LNG contracts has been mentioned many times over the last couple of years.

correct, but we all here believe a healthy exchange is one that has all views (even if they are opposing).  So why didn't anyone say this back when, or did I miss it.....

Guess I'm confused.  "Back when" to me means in the past, and I just stated that several times in the past we have brought up that once parties agree to proceed in deal negotiations it will be a bit of a drawn out pocess due to the number of and complexity of the contracts involved.  We've stated that there are many companies, and usually countries involved.  The fact that Exxon and IOC have stated that major terms have been agreed to gives us a nice bone, but the time it takes to formalize these terms, etc is a real crapshoot for those of us on the outside.  This is certainly not new "news".

[efi426hemi]

If this is the case then why do we have repeated "knowledge" come out later or after the fact.  If this is known, expected or understood in a LNG deal then WHY wouldn't one if the people in the know share that ith fellow longs instead of sitting quiet while others publicly watch the 30 and 60 day windows come and go without the anticipated del.  This is not the first time this type of thing has happened and may be one of the reasons some on here get frustrated.  JMHO FWIW

Hey Ebs,

I shared information about the 30-60 day comment in this post here.

Now if the following sounds harsh, I apologize upfront, but it is the truth and Dad always told me that nothing bad will come from being honest.  So why do I sit quiet while some get frustrated?  Because I am invested in IOC to make myself money, not to do DD or hold the hands of other investors.  And to be honest I feel little obligation to share my DD with other investors that don't reciprocate, DD gathered by spending hard earned $$ on hiring specialists, attending company events in other countries and by selective networking.  *shrugs* maybe I should do more, but I see very little impact to my investment by posting on this message board.

Keep it on Ice,

Hemi