Oil Search Latest Announcement

[Kaliboo]

http://www.oilsearch.com/

See below excerpt from the release heading dated February 28

The Independent State of Papua New Guinea (the " State" and Oil Search Limited ("Oil Search" have today reached agreement under which the State will subscribe for 149.39 million shares in Oil Search Limited at A$8.20 per share. This agreement is subject to the execution of final financing documentation with UBS AG, Australia Branch, and the receipt of final State approvals which are expected to be received on or before 6 March 2014. Settlement of the subscription is expected  to take place by mid-March 2014.              

[Putncalls]

HMMM.... Is this a coincidence? or might there be more than 7 Ts to discuss. 149 million shares at A$8.20 works out to 1.1 Billion US$. A bit more than 900M$.

[Putncalls]

There were quite a few questions about the 7Ts versus 5.4Ts used by other analysts during the OSH CC. I wonder why that is?

[SamAdams]

I'll answer your question at face value Puts although I know that's not what you meant ( no angle here on my part nor none inferred on yours), but I tihnk some of the sell side were/are actually confused about the resource size.  One asked why OSH would pay such a huge premium to the TOT deal.  A few still doubt or think there might not be 5 Ts there.  Botten stated very frankly that they were comfortable with the GC 7Ts and at that level they were paying the same price.  I was frankly surprised, though I shouldn't be I guees, that some of these ANALysts still haven't done th work on E/A.  I think that's still a major problem and I don't think its contrived, its just lazy or negligent.  I think those questions on the CC were honest ones that exposed those ANALysts ignorance of what's going on.  It was pretty clear Botten wanted to convey his confidence in the 7Ts + upside without sounding too bullish.  Sorry if I'm not following your meaning.....

[SamAdams]

...and you are right there is a little more headroom there.  Botten addressred that as well saying it give them more flexbility but it wasn't material.  He clearly believes/knows there is more than 7Ts there, that's why I think this part of the larger puzzle is actually great for OSH.  Who would have thought they could have have bought into E/A for their share of up to 10Ts for what will amoung to something in the mid $0.60 per mcf range.  Certainly not I.

[Putncalls]

We are on the same page Sam.

OSH got a better deal than they would have from TOT or IOC. PAC LNG got a better deal than they would have from IOC. TOT couldn't get a deal with PAC LNG because PAC LNG had no control over PRL 15 or the other PPLs AND not enough gas. It's all so clear in hind sight. These 5.4T estimates do annoy me though. So does any value placed on IOC using the OSH price.