[quote='jft310' pid='57248' dateline='1429803944']
[quote='CAC' pid='57244' dateline='1429802015']
Oil Search and Exxon sold off pieces several times each time the price rose per mcf as risk was reduced . Or is there more project certainty with a Total paid in and signed on or it with out ? Therefore later sell down slices receive a higher premium per PNG history . I do agree to sell it all now makes zero sense with these 17 T's hanging out with 35 more prospects to drill . I expect further drilling to confirm more assets and further sell downs to occur . The PRL machine Dr Hession speaks of .
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I understand why potential bidders may want to wait, but I understand less why IOC management (or IOC shareholders) would. My concern with this type of approach (take the money and just drill more) is that I would like to see an "exit strategy" at some point for shareholders. Getting the E/A money from Total will presumably help pps some...but it won't be a dollar for dollar pass-through to shareholders like a buyout would be. What if IOC gets 2B from TOT but then depletes it for operations for the next 5 years? Drilling costs a lot and the money could go quickly. It sounds great to "assume" that the next prospect will end up like E/A...but it might not. Then, from a shareholder's perspective, we've wasted lots of what could have been "buyout money" on 5 years of expensive operations. That would be money that shareholders can't get back. It is not implausible to think that E/A might actually be unique (I've heard it called the largest find in decades so we know it is "rare" in that regard) and that there won't be a "string of pearls" with several more "E/A's". If so, our opportunity for the highest shareholder value will be behind us. And even if Wahoo or Tri hits and 7 years from now we get another lump sum from a second sell-down, would the same mindset lead us to "not cash out" again, and drill more? Do we just keep spending the money on "hits" that could go directly to shareholders...until we "don't hit". I would just like to see an end-game.
CAC - take a minute and study what happened to Oil Search . At certification the per mcf was 50 cents at FID was 70 cents at plant open $5 and higher today or a more than 10 fold increase in price . You should be happy with those type returns or best to go to Vegas . Per the latest interview with Interoil they plan to start selling the exact same mcf quantity that Oil Search sold . The numbers therefore work . The BOD would not sell E/A without surety in other assets . Thus we have more drilling before the Total deal closes outside PRL 15 . Other LNG projects had this same type price rise .
Or your end game is right in front of you ! Either develop E/A or others or do both that's an end game . That's actually a dream for stock price appreciation post certification and payment .
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My "caution" is based on a very real track-record of dissapointment with the PPS. As you know, there has been a long list of "events" that we were told would create pps appreciation over the last 5 years. None of them did so. Credibility about these statements is understandablty in question. But, yes, if in 5 years IOC has a market cap equal to OSH's current one, that would indeed be a tremendous end game.
