Another Try at the Legal Catalyst

[mikesioc]

Don't forget OSH and PNG are attached at the hip now. Total and XOM are SM's, OSH is PNG favorite and PNG wants fastest track to lining their coffers. Keep that in mind when predicting how this all shakes out.

[Palm]

Ok thanks mikey

[ArtM72]

Can we agree on the following?

Whatever happens OSH has to meet or beat the terms of the TOT agreement, leaving IOC in an ownership position in whatever/wherever the LNG unit is built to process E/A gas, thus leaving IOC unharmed in the worst case.

Whatever OSH's final percentage ownership their interests will coincide with IOC's interests. While OSH will have the clear majority interest the ultimate control of development will still be in the hands of the PNG government. That will be the case whether TOT is a part of this project or not. The PNG government interest is clearly to see to it this project moves forward as soon as practicably possible.

Could we accurately rename this thread "Much Ado About Nothing"?

[Getitrt2]

Can we agree on the following? Whatever happens OSH has to meet or beat the terms of the TOT agreement, leaving IOC in an ownership position in whatever/wherever the LNG unit is built to process E/A gas, thus leaving IOC unharmed in the worst case. Whatever OSH's final percentage ownership their interests will coincide with IOC's interests. While OSH will have the clear majority interest the ultimate control of development will still be in the hands of the PNG government. That will be the case whether TOT is a part of this project or not. The PNG government interest is clearly to see to it this project moves forward as soon as practicably possible. Could we accurately rename this thread "Much Ado About Nothing"?

Actually, no, I am not sure we can agree on ALL that.  I'm not at all sure whether development is through PNG LNG expansion or through Antelope LNG is "in the hands of the PNG government", although whether OSH can take the Total ownership on its own as LNG "operator" may be, assuming they won legal "preemption rights" and could exercise them, which I feel sure they will not.  I also think the real "PNG government interest" is more in which project "this project" is for PRL 15 , as long as it moves forward promptly as it currently is doing, than in which project would be completed first, as you imply.  I do not think replacing the Total competitor to Exxon in PNG with an Exxon monopoly would be in the best interest of anyone except Exxon, and possibly OSH.

I am also not sure about the name "Much Ado About Nothing", although I do wish this thread did not exist, with all due respect.

[Putncalls]

Why do you wisht this thread did not exist?

What about the FCF to IOC/OSH/TOT from LNG thread?
What about the separate pipeline(s) to PM thread?

[Getitrt2]

I've already expressed my views about this thread, and do not care to put more time into it.

[kommonsents]

Can we agree on the following? Whatever happens OSH has to meet or beat the terms of the TOT agreement, leaving IOC in an ownership position in whatever/wherever the LNG unit is built to process E/A gas, thus leaving IOC unharmed in the worst case. Whatever OSH's final percentage ownership their interests will coincide with IOC's interests. While OSH will have the clear majority interest the ultimate control of development will still be in the hands of the PNG government. That will be the case whether TOT is a part of this project or not. The PNG government interest is clearly to see to it this project moves forward as soon as practicably possible. Could we accurately rename this thread "Much Ado About Nothing"?

Actually, no, I am not sure we can agree on ALL that.  I'm not at all sure whether development is through PNG LNG expansion or through Antelope LNG is "in the hands of the PNG government", although whether OSH can take the Total ownership on its own as LNG "operator" may be, assuming they won legal "preemption rights" and could exercise them, which I feel sure they will not.  I also think the real "PNG government interest" is more in which project "this project" is for PRL 15 , as long as it moves forward promptly as it currently is doing, than in which project would be completed first, as you imply.  I do not think replacing the Total competitor to Exxon in PNG with an Exxon monopoly would be in the best interest of anyone except Exxon, and possibly OSH.

I am also not sure about the name "Much Ado About Nothing", although I do wish this thread did not exist, with all due respect.

What do you dislike about this thread, getit?  You've posted about 15 posts in it.  Seems like a lot for someone that dislikes it, but then, what do I know.

What would you prefer we discuss?

[Palm]

Agree Kommon; maybe Getit is confused as are many by this whole thing and wish it would just disappear. But it won't and it's important to understand for several reasons. No disrespect to him or Sydbod, but it's clear some things are still confusing even though myself and others have made these important points (Sydbod even had an "aha" moment a while back when I explained to him that it's NOT SPI 208 that has been sold by IOC to Total, but now he's saying it again and it's a pretty important distinction). To summarize:
1. Per the SPA between IOC/SPI 208 Ltd and Total/Total Holdings Int'l BV what was sold by "IOC" was SPI 200 as spelled out as "Company" in the definitions. SPI 200 existed for many years and was not just created recently for this transaction. In fact IOC several years ago created subsidiaries specifically for holding interests in PRL 15 as they anticipated this day.
2. SPI 208 is not "a holding company". If one does a little research you'll find that several things have taken place in SPI 208. One of the Moose wells were drilled using SPI 208 and other operations also took place through SPI 208. Total's attorneys likely said that they wanted to buy the PRL 15 interests within a "clean" company and have that company be the participant in the PRL 15 venture. Not an uncommon thing at all. So SPI 200 was used and 100% of the shares were sold to Total Holdings Int'l BV.
3. Again, IOC had planned on dropping various PRL 15 interests out of SPI 208 to various entities and this was spelled out back in 2011 in their AIF. The intent has been there all along.
4. The IPI interest holders; the now famous Pac LNG companies, likely knew that it would be hard to invoke the preemption with the IOC company structure. Pac LNG companies failed to attempt preemption within 30 days from Dec 9th, possibly because they knew the structure set up by IOC would make a preemptive challenge very tough and expensive.
5. If it is the Pac LNG companies making the Dispute (which it is as done by OSH via these entities), they failed to try to preempt in December. In doing so an arbitrator might easily say that they implied they had no intention of invoking and for them to then come back and say the final deal is a totally different deal and now they want to invoke should cause the arbitrator to chuckle a bit.

Some important clarifications which are by no means comprehensive, but it's at least (again) important to get the companies involved correct as well as the fact that IOC had planned long ago to drop % interests from SPI 208 into other "clean" companies within their structure and then sell those to partners in PRL 15. This is likely why IOC and Total are as confident as they are that they will prevail. I hope people keep some of these facts straight going forward.

[kommonsents]

Agree Kommon; maybe Getit is confused as are many by this whole thing and wish it would just disappear. But it won't and it's important to understand for several reasons. No disrespect to him or Sydbod, but it's clear some things are still confusing even though myself and others have made these important points (Sydbod even had an "aha" moment a while back when I explained to him that it's NOT SPI 208 that has been sold by IOC to Total, but now he's saying it again and it's a pretty important distinction). To summarize:
1. Per the SPA between IOC/SPI 208 Ltd and Total/Total Holdings Int'l BV what was sold by "IOC" was SPI 200 as spelled out as "Company" in the definitions. SPI 200 existed for many years and was not just created recently for this transaction. In fact IOC several years ago created subsidiaries specifically for holding interests in PRL 15 as they anticipated this day.
2. SPI 208 is not "a holding company". If one does a little research you'll find that several things have taken place in SPI 208. One of the Moose wells were drilled using SPI 208 and other operations also took place through SPI 208. Total's attorneys likely said that they wanted to buy the PRL 15 interests within a "clean" company and have that company be the participant in the PRL 15 venture. Not an uncommon thing at all. So SPI 200 was used and 100% of the shares were sold to Total Holdings Int'l BV.
3. Again, IOC had planned on dropping various PRL 15 interests out of SPI 208 to various entities and this was spelled out back in 2011 in their AIF. The intent has been there all along.
4. The IPI interest holders; the now famous Pac LNG companies, likely knew that it would be hard to invoke the preemption with the IOC company structure. Pac LNG companies failed to attempt preemption within 30 days from Dec 9th, possibly because they knew the structure set up by IOC would make a preemptive challenge very tough and expensive.
5. If it is the Pac LNG companies making the Dispute (which it is as done by OSH via these entities), they failed to try to preempt in December. In doing so an arbitrator might easily say that they implied they had no intention of invoking and for them to then come back and say the final deal is a totally different deal and now they want to invoke should cause the arbitrator to chuckle a bit.

Thanks for that explanation, Palm.  It helps to get back to the facts of the matter.  It does sound like OSH has more to gain by settling the matter than taking it all the way through arbitration.

[Palm]

Agree Kommon. And another thing to realize is that SPI 208 doesn't just disappear. It is the entity which received the closing payment from Total BV and is slated to receive the certification payment(s) etc in the future per the SPA. It could not have been the company sold to Total BV.