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While I am not overly surprised by the shorts using this call as an opportunity to push the pps down (cc's have proven to be binary events in share price short term), I am surprised by some of the comments coming from fellow posters. This is what I got from the call:
1) As per the 2009 project agreement and stated publicly many times, IOC will have an internationally recognized operator of any LNG plants (and CSP for that matter). Is anyone surprised by that fact? It has been a tremendous source of contention with the PNG govt over the years. Dr. Hession made it very clear they will work with partners who will operate LNG plants.
2) They will focus on their strengths and simplify their business. Namely, Interoil will look to discover and monetize gas and liquids going forward and exploit the many promising prospects they have in their portfolio. Many here have been advocates for just such a strategy and encouraged IOC management to focus on drilling over the years......even to the point of selling all of E/A now. That is precisely what they are going to do. I suspect they are sitting on at least 30T.
3) Farm-in Agreements...they will partner with others to expedite the drilling process. I've heard this many times but Dr. Hession reiterated the point.
4) It was clear they all were marching to the same orders and had no intention of commenting about ongoing negotiations. Which company does comment on ongoing negoiations? Generally, not good business. I heard them state they remain in excusive negotiations with Exxon. Any further comments or announcement was not realistic nor should have been anticipated.
5) Phil got himself in trouble many times by making public comments that irritated the PNG govt (i.e Duma). Michael Hession is playing it smart and not overstepping his bounds. His respecftul position towards the PNG govt will play well.
The direction of IOC is changing with Dr. Hession at the helm.....and it's what the board wanted. Instead of IOC being the little engine that could and fighting, scratching, clawing to create their own place in the world while largely going it alone...........Hession will focus on establishing their niche in the LNG world by continuiing their highly successful exploration and partnering with the largest energy players to monetize those resources.
I like what I heard
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'ltinvest' pid='27072' datel Wrote:
While I am not overly surprised by the shorts using this call as an opportunity to push the pps down (cc's have proven to be binary events in share price short term), I am surprised by some of the comments coming from fellow posters. This is what I got from the call:
1) As per the 2009 project agreement and stated publicly many times, IOC will have an internationally recognized operator of any LNG plants (and CSP for that matter). Is anyone surprised by that fact? It has been a tremendous source of contention with the PNG govt over the years. Dr. Hession made it very clear they will work with partners who will operate LNG plants.
2) They will focus on their strengths and simplify their business. Namely, Interoil will look to discover and monetize gas and liquids going forward and exploit the many promising prospects they have in their portfolio. Many here have been advocates for just such a strategy and encouraged IOC management to focus on drilling over the years......even to the point of selling all of E/A now. That is precisely what they are going to do. I suspect they are sitting on at least 30T.
3) Farm-in Agreements...they will partner with others to expedite the drilling process. I've heard this many times but Dr. Hession reiterated the point.
4) It was clear they all were marching to the same orders and had no intention of commenting about ongoing negotiations. Which company does comment on ongoing negoiations? Generally, not good business. I heard them state they remain in excusive negotiations with Exxon. Any further comments or announcement was not realistic nor should have been anticipated.
5) Phil got himself in trouble many times by making public comments that irritated the PNG govt (i.e Duma). Michael Hession is playing it smart and not overstepping his bounds. His respecftul position towards the PNG govt will play well.
The direction of IOC is changing with Dr. Hession at the helm.....and it's what the board wanted. Instead of IOC being the little engine that could and fighting, scratching, clawing to create their own place in the world while largely going it alone...........Hession will focus on establishing their niche in the LNG world by continuiing their highly successful exploration and partnering with the largest energy players to monetize those resources.
I like what I heard
I agree with all that you said Itinvest -- "I like what I heard." - is correct. The problem is that we didn't hear the phrase "the deal has been signed". Sigh - I hate to see that the winning strategy with this stock is just to assume that they will not get things done in a timely fashion. (And, yes I do think that 90 days give or take should be enough to finalize a deal if all the "major terms" have been agreed to...)
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Nothing has changes between today and yesterday. The deal was not discussed and it is not signed. That is why we are down.
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["Many here have been advocates for just such a strategy and encouraged IOC management to focus on drilling over the years......even to the point of selling all of E/A now."]
Yes, I was one of them, although hoping and expecting they will have a stake in LNG/CSP plants.
Do agree with the rest of your post as well.
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Nice post Lt. And as far as expectations on the XOM deal, Pavel says it:
"Selldown: You weren't expecting a play-by-play update, were you? At the risk of repeating what we have written before many times, let's be clear: management did not, will not, and should not specify any precise timetable for making a deal announcement. The new CEO, Michael Hession, is sticking with the approach, which we think is entirely correct, of not self-imposing arbitrary deadlines, nor publicly discussing the "inside baseball" of how the talks are proceeding. The key questions that remain vis-à-vis the Exxon (XOM/$89.89/Outperform) transaction are the same as we have previously had: (1) the amount of resource to be monetized; (2) the multiple ($ per Mcf) underpinning the resource selldown; and (3) whether InterOil will thereafter move forward with a stand-alone liquefied natural gas (LNG) project.
Hession lays out his strategy. While (predictably) not giving any meaningful detail on the Exxon talks - other than confirming the exclusivity of the talks - Hession made several comments about what he envisions with regard to long-term strategy. First, he clarified what has already been entirely apparent: InterOil does not plan to be the operator of any major resource development projects, but remains open to future partnerships, including vis-à-vis a future LNG project (after, of course, the Exxon transaction is finalized). Such a project is a viable possibility, but emphatically not a near-term priority. Second, as the company gets ready to resume exploration after an extended hiatus, the aim is to bring in more drilling partners, thereby reducing cost exposure and operational risk. The drilling program on the PPL 236 block includes the multi-Tcf Wahoo prospect, long mentioned by the company. Third, Hession mentioned his desire to streamline corporate structure, with resource monetization at the center of the business model."
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Many IOC longs are their own worst enemy when it comes to earnings expectations. I have posted many times both here and on Yazoo that the SD deal is too large to wait or time for an earnings call. Many expected deal news or a major update on deal status but that was never going to happen.
Nothing has changed other than the shorts pressuring the stock post-earnings (which they always do) and many longs helping them out by selling because of disappointment with the lack of news.
The only negative that I took away was the tone did not indicate that the deal is close. I think we will be lucky to hear of the SD deal before the end of this year. As soon as the stock recovers in the $80s, I will be hedging for Sept and October. It would not surprise me if this stretches into 2014 now.
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'tarulestheday' pid='27080' datel Wrote:Many IOC longs are their own worst enemy when it comes to earnings expectations. I have posted many times both here and on Yazoo that the SD deal is too large to wait or time for an earnings call. Many expected deal news or a major update on deal status but that was never going to happen. Nothing has changed other than the shorts pressuring the stock post-earnings (which they always do) and many longs helping them out by selling because of disappointment with the lack of news. The only negative that I took away was the tone did not indicate that the deal is close. I think we will be lucky to hear of the SD deal before the end of this year. As soon as the stock recovers in the $80s, I will be hedging for Sept and October. It would not surprise me if this stretches into 2014 now.
It's a mistake to read into Hession's tone, as he had no intention of tipping the public off on deal timing. I believe the deal is about to be closed very soon, and I believe its scope and terms will significantly exceed the market's expectations.
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'Resourcearb' pid='27082' datel Wrote:
It's a mistake to read into Hession's tone, as he had no intention of tipping the public off on deal timing. I believe the deal is about to be closed very soon, and I believe its scope and terms will significantly exceed the market's expectations.
RA - go back and read through this one example thread from January. Same urgency then as now.
http://shareholdersunite.com/mybb/showthread.php?tid=2526
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Agree TA, the negotiations could well continue into the new year. Hardly surprising considering what's at stake.
1. IOC's banking BIG on PNG LNG - It's their first gas deal, first of many one hopes, got to get this right, sets the benchmark. Plus:
2. XOM's banking BIG on PNG LNG, said so in their CC. Almost certain that other IOC prospects are in the mix. Plus:
3. PNG is banking BIG on PNG LNG - the future of their economy rides on it. Plus:
4. The multitude of other considerations - PNG LNG partners, obstruction from DPE and associated politics, more politics, fate of preexisting IOC agreements, change in IOC management, change in IOC priorities, etc.
Any Fugazi fans? "I am a patient boy, I wait, I wait, I wait, I wait"
Brew
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08-14-2013, 05:28 AM
(This post was last modified: 08-14-2013, 05:30 AM by steve3752.)
While no one could expect any detail regarding the current negotiations with Exxon, I was disappointed there were not any words said at all beyond the no comment. A question had to be asked about whether the negotiations were still exclusive because of vague language in the presentation. Not good.
Saying, " We are happy with the progess in our exclusive negotiations with Exxon and are confident of a successful outcome" would have been enough to give some reassurance that things are ok. That's all we needed.
No comment is just not enough considering the past history of IOC.They have to give some flavor to where we are at. Nothing specific. Just a bone.
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