What if OSH bought out the minority?

[ltinvest]

Current scenarios being negotiated would be beneficial to all parties. OSH stake size would not be small.

[Thylacine-2]

In the PR the other day it was stated "Work continues on completing the Total agreement by the end of Q1 2014, including the buy-out of minority interests."

There are alternate ways a statement about completing the Total agreement and the buying out minority interests could have been written which would not have tied the two actions together so closely. The way it was written, "including", might be read as indicating that the buy-out of minority interests will be part of the Total agreement.

[mikesioc]

Something is going on that has made Hession conclude it is better to NOT close the minority buyout by Jan. 31st and take the hit for not delivering by 1/31. The minority group cannot hold IOC over a barrel because that is effectively shooting the golden goose. So I lend no credibility to the theory that they are putting the screws to IOC. We have OSH noted as a buyer by multiple sources, they are linked to Total, PNG, and we know PNG LNG is looking for gas to expand and dovetail into a third train. Throw in the Woodside contingent that is now running IOC and the pot is stewing with opportunity. I wouldn't be surprised to see the government get cash for some of their PRL 15 stake and use the proceeds to pay off the loan on their OSH interest together with some renegotiated financing that IOC is bringing to the table from Japan. Lots of moving parts but we have the team and the connected parties with mutual interests to pull it off. The waiting is ponderous but it a very interesting situation that I believe plays out very well for IOC.

[ebster123]

I would not be surprised if it has to do with being prey once the IPI is closed. If there is not clear closure with Total then IOC owns the lot and is a cheap takeover. The other option is he is full of BS statements like the old IOC and I choose not to lean on that one. Time will tell...

[mikesioc]

I would not be surprised if it has to do with being prey once the IPI is closed. If there is not clear closure with Total then IOC owns the lot and is a cheap takeover. The other option is he is full of BS statements like the old IOC and I choose not to lean on that one. Time will tell...

Relevent points. IOC is a takeover target whether the minority gets bought out now or later.  However, the more parties in the mix makes it more complicated and expensive for the acquirer and gets Hession further down to road to his long term goal for IOC than simply buying out the minority interest.  If OSH offers to take a chunk of E/A whoever might have an interest in buying IOC would either need to wait for drilling results or up their offer.  Regardless of what happens IOC may be in a position of leverging a better result.  I believe that is why the minority interest transaction has been pushed back.

[Stavros]

The Wahoo well will spud soon.
Wahoo is near PNG LNG.
XOM wants more gas (but just like OSH they can't find any).
IOC most likely wants a major partner involved to develop Wahoo assets

==> Might we soon hear new rumors of XOM also being in the mix???
==> Might a share of Triceratops be part of a large deal with OSH??

Time will tell. I see closure by the end of March. Earlier would be better.
I don't reach retirement age for another 4 years so I'll hang onto all my IOC shares since the PPS should appreciate faster than the overall market.

Perhaps the manipulators will move along in April after the deals are done.
FWIW ... I believe IOC is ready to initiate action against them.

[ebster123]

The Wahoo well will spud soon. Wahoo is near PNG LNG. XOM wants more gas (but just like OSH they can't find any). IOC most likely wants a major partner involved to develop Wahoo assets ==> Might we soon hear new rumors of XOM also being in the mix??? ==> Might a share of Triceratops be part of a large deal with OSH?? Time will tell. I see closure by the end of March. Earlier would be better. I don't reach retirement age for another 4 years so I'll hang onto all my IOC shares since the PPS should appreciate faster than the overall market. Perhaps the manipulators will move along in April after the deals are done. FWIW ... I believe IOC is ready to initiate action against them.

Stravos, on what do you base your  last sentence on?

[Stavros]

Sorry Ebster I can't tell you my sources on this.
Others have posted similar sentiments in the past few weeks.
Let's see if they're correct.

[jft310]

Carlo Civelli represents somehow all the minority interest . Most likely because he drives hard bargains. It's reported several

months ago he was shopping his controlled block of IOC to potential buyers . Asian and London based potential buyers. I share

this because Interoil would have to approve of the buyout of these interests the way I read the IPI agreement. If OSH is the

buyer they would have to pay a premium is my take. I also feel OSH has been trying to slow down monetization for years but

today it's in their financial interest to get gas for train 3. With the financial parameters of train 3 the buyers of IOC 's gas can

afford to pay a premium. Remember the current deal with Total is for PRL 15 only . A minority buyout would include interest

outside PRL 15 and one of those interest might provide gas for Exxon/OSH expansion.

With OSH owning all or part of the minority interest they would vote part of their share of the IOC gas to Exxon and the PNGLNG

Project would then have two votes with over 60 percent control wanting to use the IOC gas . This sale to them does not impact

the seperate Total/IOC LNG plant build or sell down .

This fits with the roadshow comments that a module of gas mentioned  as 2.5 T's could be sold to Exxon. Not to say Wahoo

would not work also. Appears Wahoo gets spudded first so first new gas might go to the PNGLNG project.

FWIW wahoo seismics are reported to be better than E/A before it was drilled and the sandstones can be reached from

this location it's also been stated they hope. Exciting times for those that get the big picture.

[sydbod]

Hi Stavros,
I dont think it is such a big secret that sources become all that important, one just has to look and see what is happening around there.
OSH is already earning interests from Kina Petroleum into PPL 338 and PPL 339. Both adjacent to area covered by IOC.
Triceratops may possibly extend into PPL 338.
OSH has a tie in with Total.
The seismic from Triceratops extension into PPL 338 was finished some time ago and outcome of that study has been kept very very quiet. (something OSH does not tend to do no mater what the outcome information happens to be, positive or negative).
It is only a matter of time before IOC and OSH would happen to have common interests in that area of PNG if we believe that that area is so prospective.
It may be within the realm of possibility that some sort of understanding is trying to be nutted out between IOC, Total and OSH about common interests in that area.

However, I don't see anything to suggest (at the moment ) that XOM is involved in any way.