Good Oil Search article more details

[my2cows]

Somehow I can't imagine ANY deal being done until reports are receive from wells currently being drilled. Somehow I think if any of these three current exploratory wells are successful OSH won't have enough money to put in a competitive bid. Screw 'em. Let any bad karma be reflected clearly by the man in Botten's mirror.

But what if Woodside has just been playing chess:

Interoil management is Woodside management ---check

Woodside executes purchase of Oilsearch vis-via "Oilsearch's purchase of 15% of PRL15" means Interoil gets into Exxon plant. (that story was backwards) --- check

Interoil Management (Woodside executives) sells interoil to woodside who already bought Oilsearch.... IF IF IF woodside was playing chess, they're playing it perfectly.

[jft310]

Can't gauge the diabolical nature of Woodside but can see that both Oil Search and Interoil are tasty morsels .

[ebster123]

[quote='ArtM72' pid='42464' dateline='1398304743'] Somehow I can't imagine ANY deal being done until reports are receive from wells currently being drilled. Somehow I think if any of these three current exploratory wells are successful OSH won't have enough money to put in a competitive bid. Screw 'em. Let any bad karma be reflected clearly by the man in Botten's mirror.

But what if Woodside has just been playing chess:

Interoil management is Woodside management ---check

Woodside executes purchase of Oilsearch vis-via "Oilsearch's purchase of 15% of PRL15" means Interoil gets into Exxon plant. (that story was backwards) --- check

Interoil Management (Woodside executives) sells interoil to woodside who already bought Oilsearch.... IF IF IF woodside was playing chess, they're playing it perfectly.

Nice thoughts but if, if, if then it would seem logical that RDS, TOT,  China SWF and XOM among others might not let Woodside off that easy.  Add another if but could be nice.  Time will tell...

[sydbod]

The probability of Woodside getting involved in PNG is small. They are too busy with other projects around the world. The latest push by Woodside looks to be in Cyprus.
http://www.theaustralian.com.au/business...6893737797#

[ArtM72]

The probability of Woodside getting involved in PNG is small. They are too busy with other projects around the world. The latest push by Woodside looks to be in Cyprus. http://www.theaustralian.com.au/business...6893737797#

Maybe, but Leviathan is by no means a done deal according to this article: http://www.theaustralian.com.au/business/mining-energy/israeli-clouds-gather-over-woodside-leviathan-deal/story-e6frg9df-1226889453803#, or http://www.bloomberg.com/news/2014-03-30/delek-drops-as-woodside-delays-leviathan-deal-tel-aviv-mover.html.

I've always wondered how real the actual Leviathan project is.  They drill one well to 17,000 feet in 5,000 feet of water and declare there is 16 TCF of gas.  Then, to up the ante, they claim down another 7,000 feet there is 9 TCF more and 600 MM BBLS of oil.  Just how many wells has IOC drilled in E/A with the resource still in question?  How much credibility does anyone really believe there is in the Leviathan claims?

For those suspecting clandestine intentions in PNG by Woodside I suspect their current dispute and refusal to ante up the shekels last month could suggest Woodside might have more interest in a much more likely prospect, much closer to home, in a far better political climate and where you can stand on dirt while you drill.

[sydbod]

Hi ArtM72,

The current dispute and holdup with Leviathan has to do with accelerated depreciation and the tax system. Once this gets sorted out (hopefully), then the deal should be a go. We will know much more about it when the paper work gets signed, or the deal gets cancelled. We have to remember that Woodside has already put money into that project, and now looks to be interested into Cyprus also.
Leviathin is just one of many projects that Woodside has a finger in the pie.
They are restarting deep water drilling to add resources to Pluto project.
They are exploring in NZ.
They are exploring in the UK area.
They are exploring in Myanmar,
They are working on potential FLNG projects
etc.

Woodside has enough long term projects up its sleeve. It would not be interested in OSH, because OSH is already priced too high, and it would not be interested in IOC, because it already has enough long term projects for its books. It is the medium term projects that Woodside is lacking. Things where it can just add pipeline to direct gas to a ready market and such things.

[my2cows]

It is the medium term projects that Woodside is lacking....

Oil search starts shipping gas this year... add in another 2 trains in 2-3 years.... that is their medium term project.

[sydbod]

Oil search starts shipping gas this year... add in another 2 trains in 2-3 years.... that is their medium term project.

I agree, that it would be a valid candidate, but the price for OSH is just too high. OSH does not have enough price upside left in it to warrant a takeover bid, and also OSH is being protected from a takeover offer by its 2 largest share holders.

OSH may have a  current market value approaching $10 at the moment with a market price of $8.60. Woodside considers at that level that the takeover target is way too overpriced for them to be interested.

[jft310]

The future cash flow of OSH's 2 LNG train position in Ping Ling is not fully reflected in the current price and that's why on PNG they say $20 a share by 2020. Abu Dabai refused to give up their shares. With LNG stocks one needs to look forward not back.
With Interoil there is zero dollars in the price for a good certification, zero for new prospects and zero for LNG with anyone. That's why its stupid cheap.
Possibly next week we get drilling result. The last few days is option noise and is short term and means nada.
If I can do the math on future cash flows it's 100% that Woodside can punch in the numbers. What that means for Woodside is not known.
See Relkers interactive model for LNG scenarios.

[Brew Swillis]

Hi ArtM72, The current dispute and holdup with Leviathan has to do with accelerated depreciation and the tax system. Once this gets sorted out (hopefully), then the deal should be a go. We will know much more about it when the paper work gets signed, or the deal gets cancelled. We have to remember that Woodside has already put money into that project, and now looks to be interested into Cyprus also. Leviathin is just one of many projects that Woodside has a finger in the pie. They are restarting deep water drilling to add resources to Pluto project. They are exploring in NZ. They are exploring in the UK area. They are exploring in Myanmar, They are working on potential FLNG projects etc. Woodside has enough long term projects up its sleeve. It would not be interested in OSH, because OSH is already priced too high, and it would not be interested in IOC, because it already has enough long term projects for its books. It is the medium term projects that Woodside is lacking. Things where it can just add pipeline to direct gas to a ready market and such things.

Door #2.

http://www.bloomberg.com/news/2014-05-20...-fail.html

Woodside Scraps $2.6 Billion Israeli Gas Deal as Talks Fail

By James Paton - May 21, 2014

Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, scrapped an agreement to buy a quarter of Israel’s largest natural gas field for as much as $2.6 billion after talks to complete the deal collapsed.

“Negotiations between the parties failed to reach a commercially acceptable outcome,” the Perth-based company said today in a statement. Woodside had been in talks with a group including Noble Energy Inc. (NBL) to invest in the Leviathan venture.

A deal would have put Woodside in the middle of Israel’s nascent natural gas industry as the company’s proposed projects in Australia face delays. Woodside last year ditched plans to build an onshore processing plant in Western Australia to exploit its Browse gas resources. The company estimated that proposal would have cost more than A$80 billion ($74 billion).

“Leviathan felt like Browse,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said today by phone. “It was going to be hugely costly for a very low rate of return.”

Woodside rose 0.8 percent to close at A$41.23 in Sydney trading, while the benchmark index climbed 0.1 percent.

Woodside will probably look for acquisitions to boost production as the world’s biggest oil and gas producers sell assets, Nik Burns, a Melbourne-based analyst at UBS AG, said today in a note. The company also may consider giving back $1 billion that it would have set aside for Leviathan this year to shareholders through a special dividend, he said.

Oil Search

The company faces growing pressure to make an acquisition to provide growth, according to a Macquarie Group Ltd. report last week. While a bid for rival Oil Search Ltd. can’t be ruled out, Woodside will probably look at smaller acquisitions, Macquarie analysts wrote in the May 14 report.

Oil Search, Exxon Mobil Corp.’s partner in a natural gas project in Papua New Guinea, rose 1.4 percent to A$9.14.

“Woodside has made it clear they are looking for offshore overseas assets,” IG’s Lucas said. “They want to diversify their portfolio away from Australia and Oil Search is a clear standout.”

The move to pull out of the Leviathan agreement comes 17 months after Woodside signed an initial accord to acquire part of the project. The discussions dragged on amid concerns over possible changes in Israeli tax and regulatory policies, while the focus of Leviathan shifted from production of liquefied natural gas, Woodside’s specialty, to pipeline shipments.

Moving Ahead

Noble is moving ahead with plans to develop Leviathan, the Houston-based company said in a separate statement. The emergence of regional markets accessible by pipeline “has pushed the need for LNG into a later phase of development versus our earlier plans,” Chief Executive Officer Charles Davidson said. Issac Tshuva, the controlling shareholder of Delek Group Ltd., a partner in the field via its units Delek Drilling-LP and Avner Oil Exploration LLP, said today development continues as planned.

Delek Group shares dropped as much as 1.4 percent today following the news and were trading 0.8 percent lower at 5:04 p.m in Tel Aviv. The shares of Ratio Oil Exploration 1992 LP, also a partner in the field, fell 4.1 percent, the most since Feb. 3. Nobel Energy rose 0.7 percent in New York trading.

The shekel weakened 0.2 percent to 3.4891 versus the dollar as the deal was supposed to bring in a cash flow of dollars, Tal Zohar Avda, the chief executive officer of the Tel Aviv branch of FXCM Inc. U.S. said today by phone.

Earlier Deal

Woodside earlier this year agreed to pay the Leviathan partners, including Delek Drilling LP, Avner Oil Exploration LLP and Ratio Oil Exploration LP, an initial $850 million. The 25 percent stake it sought to acquire is smaller than the 30 percent negotiated in the December 2012 deal.

“After many months of negotiations it is time to acknowledge we will not get there under the current proposal,” CEO Peter Coleman said in the statement.

For the development of Browse, Woodside now is proceeding with plans to liquefy the gas on giant ships offshore, using Royal Dutch Shell Plc’s technology. A decision on whether to go ahead with that proposal is expected in the second half of 2015.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Rebecca Keenan, Matthew Brown