The last 30 days

[ArtM72]

I'm telling you guys. There is no mystery in the current stock price. 62 bucks is the current value based on FCF in 2020.

I suspect your 62 is based now on E/A at around 7 TCF with the value of Triceratops and the 3+ million acres of PPL at zero?  What is the risk coefficient used for the 7 TCF in that calculation?

[jft310]

Macquarie who knows more than all of us has done all this work . WAG by us board posters dims when compared to Macquarie's model. Best to use written reports by experts

[SamAdams]

These very smart guys at Macquarie have an $80 price target. NAVs are not price targets. Energy companies trade at discounts to their NAVS for various reasons including growth rates, reserve quality, management credibility, balance sheets etc. The market sets the discount. The report is excellent though as it outlines the risk adjustment you can make or choose not to make to that NAV. But be clear, their price target is $80 as in their own words EA is under appraised, FID is in '16 and exploration is not 100% all the time. They also thought Wahoo was shallower than apparently it is. They are also pretty conservative in that price target so I wouldn't take them lock, stock and barrel either. Can't cherry pick just the best stuff. Best read with a balanced look at what they're saying, which is very positive but not without uncertainties.

[Putncalls]

Did you notice that there is no date for the McGuire 80+ target? My model's 80+ date, is DEC 14, if there is no upside from the drilling. I think the market is using GCA and 15 bucks PS for exploration just as is McGuire. The current E/A discount is 90% in my model and dropping to 80% by 2015 and 60% in Q1 of 2016. I'll betcha that is close to McGuire's model.

[SamAdams]

Usually these are 12 month targets but I would think your discounts are much too high as we pass Certification, FID and I would assume some E&P success. Antelope Deep could be the sleeping giant in all this.  Look at how long it will have  taken to get full credit for EA.  Even with new gas finds, they still have to be appraissed properly and fully, unilke EA, before we get full price or a lower discount.  The black stuff changes all that but that's another story or thread.  There is risk is assuming too much as there is in discounting too much.

[Putncalls]

If FID is in two years my discount would then would be about 50% for IOC E/A NG. The exploration value of IOC remains at 15 bucks until there is firm news. That would put the value of the IOC E/A NG at 100 bucks per share in two years.

[Getitrt2]

I'm telling you guys. There is no mystery in the current stock price. 62 bucks is the current value based on FCF in 2020.

Oh, really?

There is always "mystery" in the stock price!

62?  What discount rate?  How many years FCF in what amounts?  Any value for 2015 resource payments?  Antelope Deep bonus?  FID payments?  Cash?  Triceratops?  Exploration prospects?  Always lots of variables, huh?

Have you read the Macquarie report?

[ArtM72]

If FID is in two years my discount would then would be about 50% for IOC E/A NG. The exploration value of IOC remains at 15 bucks until there is firm news. That would put the value of the IOC E/A NG at 100 bucks per share in two years.

My bet is if E/A appraises out FID occurs by 3Q 2015 with Japan more than happy to commit for gas purchases.  Time is money and I don't doubt for a moment engineers are currently working scenarios for development.  Once they have the reserve number everything will move very quickly.

[Putncalls]

Art; I think PM already tried the quick path to LNG? FID 3 months after certification?
Getit; I was clear that the upsides you mention are not in the PPS or my model unless they occur.

I'm guessing that FCF in 2020 from IOC's E/A share to be around 1.25 billion dollars/year. (36% of 7MTPA+condensates).

My model has been fairly correct now for almost 7 months.

[SamAdams]

Puts. I think you have a very reasonable model and expectations. Not sure where the literacy campaign started, but i for one can read. And, I have read the Macquarie report. I'm not sure where the disconnect between price target and NAV came up but it is obvious to anyone who not just read, but understood, the report. I'm not sure it's all that controversial as the report lets you make your own assumptions but some just keep saying, " ..have you read the report?".