What is IOC's 30% LNG ownership worth?

[Relker]

At present the market value does not reflect the true value of the company. With all the license payments coming it must be possible to buyback some shares. I fancy that the new management is smart enough to make use of the present leverage effect. With a successful drilling programme a $ 30 B stock value is not a dream.

Are you suggesting that a share buyback somehow increases the market capitalization?  $30 billion market cap is $613 per share.  A dream would be putting it kindly.  Tap the brakes.

Woodside has a net income amounting to $ 3 B. Based on a PE of 10 the marketvalue is $ 30 B. The 30% stake in PRL 15 will yield IOC approx $1.5 B net income based on 2 trains. It is not unlikely that the string of pearls outside PRL15 will generate 2 extra trains.

[jft310]

Relker

We have 2 reefs confirmed by the drill bit. Both have fish bones and shell pieces. In the past the Board engineers have looked

at the IOC information and think we might have a total of 13 reefs. Has to be one of the reasons for all this drilling.  More

assets found yields a larger LNG plant maybe. Might yield us a seperate deal within Exxon at Tricefatops that was discussed

on the roadshow.

Lets drill ahead now!

[mikesioc]

At present the market value does not reflect the true value of the company. With all the license payments coming it must be possible to buyback some shares. I fancy that the new management is smart enough to make use of the present leverage effect. With a successful drilling programme a $ 30 B stock value is not a dream.

Are you suggesting that a share buyback somehow increases the market capitalization?  $30 billion market cap is $613 per share.  A dream would be putting it kindly.  Tap the brakes.

Woodside has a net income amounting to $ 3 B. Based on a PE of 10 the marketvalue is $ 30 B. The 30% stake in PRL 15 will yield IOC approx $1.5 B net income based on 2 trains. It is not unlikely that the string of pearls outside PRL15 will generate 2 extra trains.

Woodside has been delivering gas since 1984.  Giant leap to assume IOC gets to $30 billion in the next 20 years.  If we can replicate Oil Search over the next 7 years that's a reasonable expectation.

[kerekesc]

Relker

We have 2 reefs confirmed by the drill bit. Both have fish bones and shell pieces. In the past the Board engineers have looked

at the IOC information and think we might have a total of 13 reefs. Has to be one of the reasons for all this drilling.  More

assets found yields a larger LNG plant maybe. Might yield us a seperate deal within Exxon at Tricefatops that was discussed

on the roadshow.

Lets drill ahead now!

At present the market value does not reflect the true value of the company. With all the license payments coming it must be possible to buyback some shares. I fancy that the new management is smart enough to make use of the present leverage effect. With a successful drilling programme a $ 30 B stock value is not a dream.

Are you suggesting that a share buyback somehow increases the market capitalization?  $30 billion market cap is $613 per share.  A dream would be putting it kindly.  Tap the brakes.

Woodside has a net income amounting to $ 3 B. Based on a PE of 10 the marketvalue is $ 30 B. The 30% stake in PRL 15 will yield IOC approx $1.5 B net income based on 2 trains. It is not unlikely that the string of pearls outside PRL15 will generate 2 extra trains.

Woodside has been delivering gas since 1984.  Giant leap to assume IOC gets to $30 billion in the next 20 years.  If we can replicate Oil Search over the next 7 years that's a reasonable expectation.

I don't believe a company's share price is significantly influenced by the fact that it has been delivering gas in the past.  IOC's share price will be influenced by the facts of proving reserves and proving that it can get those reserves to the market.  The more it proves, the higher the share price.  Therefore, yes, IOC has the potential to be valued at $30 billion....and it will not take 20 years!

[mikesioc]

Relker

We have 2 reefs confirmed by the drill bit. Both have fish bones and shell pieces. In the past the Board engineers have looked

at the IOC information and think we might have a total of 13 reefs. Has to be one of the reasons for all this drilling.  More

assets found yields a larger LNG plant maybe. Might yield us a seperate deal within Exxon at Tricefatops that was discussed

on the roadshow.

Lets drill ahead now!

At present the market value does not reflect the true value of the company. With all the license payments coming it must be possible to buyback some shares. I fancy that the new management is smart enough to make use of the present leverage effect. With a successful drilling programme a $ 30 B stock value is not a dream.

Are you suggesting that a share buyback somehow increases the market capitalization?  $30 billion market cap is $613 per share.  A dream would be putting it kindly.  Tap the brakes.

Woodside has a net income amounting to $ 3 B. Based on a PE of 10 the marketvalue is $ 30 B. The 30% stake in PRL 15 will yield IOC approx $1.5 B net income based on 2 trains. It is not unlikely that the string of pearls outside PRL15 will generate 2 extra trains.

Woodside has been delivering gas since 1984.  Giant leap to assume IOC gets to $30 billion in the next 20 years.  If we can replicate Oil Search over the next 7 years that's a reasonable expectation.

I don't believe a company's share price is significantly influenced by the fact that it has been delivering gas in the past.  IOC's share price will be influenced by the facts of proving reserves and proving that it can get those reserves to the market.  The more it proves, the higher the share price.  Therefore, yes, IOC has the potential to be valued at $30 billion....and it will not take 20 years!

It will take at least 7 years to match Oil Search if everything goes nearly perfect.  Advocating $30 billion is pie in the sky today, IMHO.  If your expectation is $30 billion good luck.  I hope you are right but not holding my breath.

[jft310]

Today with zero more discoveries IOC has more NG than Oil Search . We have at least 8 wells being drilled in the next 12-15

months. Several persons believe we have more is obvious.

Mike- companies are valued off cash flow . A 2 train LNG plant which all 3 reservoir engineering firms agree IOC has enough to

provide today yields $1.5 billion . That gets us to Oil Search's cash flow . But that ignores the from the sky picture. Get a google

earth picture of what IOC lease area looks like . Phil Mulacek saw what looked like to him an old extension of The Great Barrier

reef on land . He found 55 areas where oil and NG were leaching out of the ground. Tusker so named this theory to be

the String of a Pearls . It's quite visible with google earth. They so far have confirmed 2 reefs . There is no where in the world

where there are only 2 reefs. There are more reefs 100 percent for sure . The purpose of this drilling campaign is to get the size

right of elk/antelope and to prove out more reefs.

Now those wells have not been drilled yet that's true but the odds are quite high IOC can find and prove more. Certainly

Total believes or they would not be paying for 4 wells and $613 million down payment.

Worst case we become a $10 billion dollar market cap just like Oil Search . Best case can't be defined but the seismics

oil and gas seeps and the google earth theory has a great chance it's right. The Schlumberger Singapore office thinks

IOC has well more than 10 T's at just Elk/Antelope and the former CEO of Marathons Int , Henry Aldorf believes we have 12-16

t's video taped saying . These are experts and I trust they know more than others and invest accordingly.

[kerekesc]

Good post, Jft.  It clearly states why IOC cannot/should not be compared to Iol Search, and why IOC has the potential to be a $30 billion company.  The only possible agreement I have with Mike regarding his reply to my post, is that I, too, believe that there is a chance that we may not attain the $30 billion valuation.  Not because it is a "pie in the sky" idea, but because I have a great fear that we will be bought out much earlier.  I just hope that Hession can deliver his goal of a $30 billion company!

[mikesioc]

Today with zero more discoveries IOC has more NG than Oil Search . We have at least 8 wells being drilled in the next 12-15

months. Several persons believe we have more is obvious.

Mike- companies are valued off cash flow . A 2 train LNG plant which all 3 reservoir engineering firms agree IOC has enough to

provide today yields $1.5 billion . That gets us to Oil Search's cash flow . But that ignores the from the sky picture. Get a google

earth picture of what IOC lease area looks like . Phil Mulacek saw what looked like to him an old extension of The Great Barrier

reef on land . He found 55 areas where oil and NG were leaching out of the ground. Tusker so named this theory to be

the String of a Pearls . It's quite visible with google earth. They so far have confirmed 2 reefs . There is no where in the world

where there are only 2 reefs. There are more reefs 100 percent for sure . The purpose of this drilling campaign is to get the size

right of elk/antelope and to prove out more reefs.

Now those wells have not been drilled yet that's true but the odds are quite high IOC can find and prove more. Certainly

Total believes or they would not be paying for 4 wells and $613 million down payment.

Worst case we become a $10 billion dollar market cap just like Oil Search . Best case can't be defined but the seismics

oil and gas seeps and the google earth theory has a great chance it's right. The Schlumberger Singapore office thinks

IOC has well more than 10 T's at just Elk/Antelope and the former CEO of Marathons Int , Henry Aldorf believes we have 12-16

t's video taped saying . These are experts and I trust they know more than others and invest accordingly.

JFT, I've owned IOC for many years and have a vague idea of what's going on here so I beg to differ on your worst case scenario.  Let's all hope we have experianced the worst case by losing 40% market cap immediately upon the announcement of the transformational deal.  After waiting years for that experience, for my money if an offer comes in anytime soon at Movieguy's mean poll estimate of $138......SOLD!  If I didn't believe IOC had enough gas to satisfy a 2 train facility I would have been long gone years ago.  But I don't necessarily want to wait around another 6 or 7 years to get to $10 billion ($204) either.  Setting an expectation for a $30 billion market cap is a set up for more disappointment.  Even best case drilling results and execution don't guarantee the stock will see $10 billion anytime soon, let alone $30 billion.  If that rains on anyone's parade so be it, we are talking about IOC here.  Anyone that's been around long enough knows what I mean.  I believe Hession is finally the right person to lead the company but he got his head handed to him on December 6th.  We know all too well what happens when IOC is perceived to have underachieved or makes any misstep.  It would serve everyone well, including Hession, to stay away from hyperbole and flaunting best case scenarios or using words like elephant.  It leaves no room to overdeliver. Even when IOC does something right the lying crooks control the narrative.  Everything gets skewed to the negative or branded as a promotion, the stock gets hammerred and IOC winds up making clarification statements. Can we underpromise and overdeliver with well crafted PR just once?  After all the drilling if we haven't been bought out by then let's see where we stand.  In the meantime I remain confident in a rosier future but am not putting on the glasses just yet.  Have a great day!

[jft310]

Mike-You fail to give credit to the changes. This is NOT the same IOC.
The resource has more proven out today than in the past and a massive campaign to prove out more is underway.
You judge IOC on what Phil tried to do and promised. The people making unfulfilled promises are GONE!
To drive home my point get a management list from 7 years ago
See who was in what slot 7 years ago and whose there now.
When you do that you will see Wayne is the Lone Ranger left.
Further compare resumes of whose left and today with who has extensive LNG experience.
More important we are weeks away from the signing of a Super Major with deep pockets .
This is NOT your Mothers IOC.
Please embrace the changes for what they are and can be.
The players have changed and well different people do different things.
Some look back and moan and others look forward and see what can and will be.
Your call.

[SamAdams]

Lloking to the past is not moaning or whining or being an options player or being short as it relaites to IOC - it is instructive.  Unfortunately the new management team has suffered from some, but not all, of the issues of the past.  While they delivered a deal on time, they delivered one below expectations ( only $ per mcf) and botched the dlelivery of the message.  This is not an indictment of the deal, as I think it is excellent, but it was the expectations aroudn price.  Shareholders were unrealistc, not managmenet.  MH knew what the market price of the gas was and delivered on this.  He was realistic about where the deal would get done.  But he also knew where expectations were - that was the issue. Perhaps that is why CV is gone.

That being said, I agree with both Mike and JFT on this.  JFT's upside is spot on, and one I believe in.  But I also agree with Mike that we all need to be realistic.  All the drilling activity is great, but what if the first couple of wells are dissapointing?  Perhaps the next 5-6 are awesome.  I am certain at least a couple of the wells will deliver the results and confirmation we are all waiting for, but we don't know whether they will be well 1 or well 6.  The timing could impact the share price in the short to intermediate term either positively or negatively and here is where being realistic is important.

The IPI resolution could also being messy or miscontrued.  Even the team has not shown the ability to deliver a clean message so this could also create short term volatility.  MH stated in Boston on 12/13/13 that the IPI deal was done and just being papered - and yet here we are 44 days later.

Would major holders sell at $150 before drilling results?  Sure.  What tihe drilling program is dissapointing or just ok? A triple from here?  not many would turn their backs.  We all waited for $1.25/$1.50/$2.00 per mcf and that did not happen - and won't.  MH delivered that best deal he could and that was for $0.80 gross.  He dealt with reality.  I think he would deal with a takeover offer in the same way.  he would not say (like PM) I'm not seliing becaues I'm worth $500 pps, he would say at this point in our life cycle this is what SMs pay in this situation and what's fair is fair.  I honestly don't know if that $125 pp or $150 or $200, but Hession would deal with it in that way.  The good news is that generally speaking I don't there is too much in the way of expectations built into the stock at this point, which is always good as it presents the opportunity for positive catalysts to get the stock going again.  Low expectations  and positive surprises are what will move the stock.