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[sydbod]

Woodside Scraps $2.6 Billion Israeli Gas Deal as Talks Fail

Good article.

Woodside is only interested in projects if it can make significant profits from it.

Should be interesting to see what they do next.

NO ... it will not be a take over deal for IOC, or even OSH. The time span for IOC development is too long and the profits from a take ove of OSH (at above the current price) are way too small.

I suspect they will now concentrate very heavily on their Pluto LNG plant exploration and expansion.

[Stavros]

Woodside top management are a bunch of dorks.

How can they say that they see sovereign risk when it comes to PNG but offshore Israel was not too risky for them to invest?
They walked away from Levithan because the plan is now to pipe gas onshore instead of spend 10's of billion$ more for an overpriced LNG plant?

So now they'll develop Browse with a gigunda FLNG that's based on unproven Shell technology?
This is the same bunch of Shell guys who lost their shirts on the Pearl Gas-to-Liquids plant in Qatar using unproven technology.

Michael Hession was smart to leave Woodside and join IOC where he can make decisions and implement them.
At Woodside, all he could do was make plans and then watch them go down in flames.

NEXT ISSUE ... Outcome of Paris discussions among IOC/TOT/OSH.
Words continue to spew from all players that earliest possible monetization of PRL 15 gas is the desired outcome.
That can only happen if the gas goes to PNG LNG Trains #3 and #4.
BAM!

Mr Kavo will wait for Triceratops gas

[jft310]

Woodside top management are a bunch of dorks. How can they say that they see sovereign risk when it comes to PNG but offshore Israel was not too risky for them to invest? They walked away from Levithan because the plan is now to pipe gas onshore instead of spend 10's of billion$ more for an overpriced LNG plant? So now they'll develop Browse with a gigunda FLNG that's based on unproven Shell technology? This is the same bunch of Shell guys who lost their shirts on the Pearl Gas-to-Liquids plant in Qatar using unproven technology. Michael Hession was smart to leave Woodside and join IOC where he can make decisions and implement them. At Woodside, all he could do was make plans and then watch them go down in flames. NEXT ISSUE ... Outcome of Paris discussions among IOC/TOT/OSH. Words continue to spew from all players that earliest possible monetization of PRL 15 gas is the desired outcome. That can only happen if the gas goes to PNG LNG Trains #3 and #4. BAM! Mr Kavo will wait for Triceratops gas

Careful Stavros certain posters think there is zero chance any PRL 15 gas goes to Exxon. Maybe they know Rex will not pay enough ?But reality is no one knows if Rex will pay enough or not.

[Palm]

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.

Not enough upside left in pps? Where did you get that from syd? Or is that just your opinion. A year ago is when serious speculation was going on about interest from different players in buying OSH as production at PNG LNG neared. Talk has been that OSH would be a $20 stock by 2020 and that a buyout could come in the $12-14 range. Why does that now not make sense in your world? And that was all before their buyin to the "largest undeveloped resource in PNG."

[will2bgreat]

Woodside top management are a bunch of dorks. How can they say that they see sovereign risk when it comes to PNG but offshore Israel was not too risky for them to invest? They walked away from Levithan because the plan is now to pipe gas onshore instead of spend 10's of billion$ more for an overpriced LNG plant? So now they'll develop Browse with a gigunda FLNG that's based on unproven Shell technology? This is the same bunch of Shell guys who lost their shirts on the Pearl Gas-to-Liquids plant in Qatar using unproven technology. Michael Hession was smart to leave Woodside and join IOC where he can make decisions and implement them. At Woodside, all he could do was make plans and then watch them go down in flames. NEXT ISSUE ... Outcome of Paris discussions among IOC/TOT/OSH. Words continue to spew from all players that earliest possible monetization of PRL 15 gas is the desired outcome. That can only happen if the gas goes to PNG LNG Trains #3 and #4. BAM! Mr Kavo will wait for Triceratops gas

Stavros,

Why do you think the PNG LNG represents the fastest monetization of PRL 15?

While I would say that PNG LNG requires the least capital, I am having a hard time working out in my head how the PNG LNG is the quickest.  If you lay out the critical path schedule, the long lead items are the LNG equipment and the piping lead times and installation,  I believe all of the ancillary work in the CPS can be completed while this stuff in on order.  Therefore, whether a seperate plant is built or additional trains added tot the PNG LNG, the overall schedule will be about the same.  What am I missing here?

Good luck longs.

[jft310]

My take on OSH is the company today is about $10 Billion market cap with Woodside talking about $11 Billion in a buy out. OSH would be stupid to sell at such a small premium. But then again ya gotta start someplace . Appears Woodside wants a PNG discount. That's absurd Woodside needs to look at cost of development Australia vs PNG . Huge tax , regulatory and environmental costs in Australia that don't exist on PNG . Could easily be part of negotiations . Will it happen no clues on my end.

[Palm]

If OSH sells for $12, that's a 25% premium. At $14 it's a 55% premium. Very normal range for a premium from where it is today. If the $12-14 range worked last year when pps was at $8.50, it certainly works in the current $9 range.

[jft310]

[quote='Stavros' pid='43667' dateline='1400731363'] Woodside top management are a bunch of dorks. How can they say that they see sovereign risk when it comes to PNG but offshore Israel was not too risky for them to invest? They walked away from Levithan because the plan is now to pipe gas onshore instead of spend 10's of billion$ more for an overpriced LNG plant? So now they'll develop Browse with a gigunda FLNG that's based on unproven Shell technology? This is the same bunch of Shell guys who lost their shirts on the Pearl Gas-to-Liquids plant in Qatar using unproven technology. Michael Hession was smart to leave Woodside and join IOC where he can make decisions and implement them. At Woodside, all he could do was make plans and then watch them go down in flames. NEXT ISSUE ... Outcome of Paris discussions among IOC/TOT/OSH. Words continue to spew from all players that earliest possible monetization of PRL 15 gas is the desired outcome. That can only happen if the gas goes to PNG LNG Trains #3 and #4. BAM! Mr Kavo will wait for Triceratops gas

Stavros,

Why do you think the PNG LNG represents the fastest monetization of PRL 15?

While I would say that PNG LNG requires the least capital, I am having a hard time working out in my head how the PNG LNG is the quickest.  If you lay out the critical path schedule, the long lead items are the LNG equipment and the piping lead times and installation,  I believe all of the ancillary work in the CPS can be completed while this stuff in on order.  Therefore, whether a seperate plant is built or additional trains added tot the PNG LNG, the overall schedule will be about the same.  What am I missing here?

Good luck longs.

Some items that make an Exxon add on attractive would be lower capital costs, the pipe for the 3 rd train is in place to Port Moresby, Interoil needs to tie into that T at Kerema, shared infrastructure between all the trains exists at Port Moresby , quicker FID at a lower cost . Stavros would be best on this board to detail the savings in time and money . What ya say?

[sageo]

Woodside top management are a bunch of dorks. How can they say that they see sovereign risk when it comes to PNG but offshore Israel was not too risky for them to invest? They walked away from Levithan because the plan is now to pipe gas onshore instead of spend 10's of billion$ more for an overpriced LNG plant? So now they'll develop Browse with a gigunda FLNG that's based on unproven Shell technology? This is the same bunch of Shell guys who lost their shirts on the Pearl Gas-to-Liquids plant in Qatar using unproven technology. Michael Hession was smart to leave Woodside and join IOC where he can make decisions and implement them. At Woodside, all he could do was make plans and then watch them go down in flames. NEXT ISSUE ... Outcome of Paris discussions among IOC/TOT/OSH. Words continue to spew from all players that earliest possible monetization of PRL 15 gas is the desired outcome. That can only happen if the gas goes to PNG LNG Trains #3 and #4. BAM! Mr Kavo will wait for Triceratops gas

Careful Stavros certain posters think there is zero chance any PRL 15 gas goes to Exxon. Maybe they know Rex will not pay enough ?But reality is no one knows if Rex will pay enough or not.

jft- That is today's BIG question ! (??) . Will Rex "pay enough" now,or pay much more later ? Thanks for all you do to help us in our goals.(and we will still have enough gas in our leases to make Kavo happy at Kerema).

[sydbod]

If OSH sells for $12, that's a 25% premium. At $14 it's a 55% premium. Very normal range for a premium from where it is today. If the $12-14 range worked last year when pps was at $8.50, it certainly works in the current $9 range.

We don't know if the $12-14 range would have actually worked last year when pps was at $8.50.

The other important consideration happens to be that Train 1 is now working supposedly early, and therefore the project is properly de risked. Train 2 is also coming on line this year some time. OSH has confirmed it has the potential now to be in participation prospect for another 2 or 3 new trains of LNG. The Taza prospect becoming more advanced with earlier oil production possible. And lastly OSH has 2 large shareholders that in all probability do not want to sell their shares (and one pissy little shareholder called sydbod, that also does not want to sell his shares) at such a low price.

I also don't believe that Woodside would pay a premium price of $14 for OSH. Profit margin at that price is not enough for a company like Woodside.