Friday Fact

[Getitrt2]

The stock price issue is an interesting one. Energy prices are obviously outside of management's control but a very sizable chuck of value has a locked in price per mcf by the Total selldown. The biggest thing that will make a difference over the next year is the Elk/Antelope certification number. You may note that Hession has never explicitly stated any number or range for the expected certification at Elk/Antelope. The closest Hession has come is in the most recent presentation when he spoke about having enough for a two train development. The problem was when an analyst asked if this mean 7.0TCF he declined to say anything other than enough for two trains. Management has spoken about shifts in their high case to mid case for specific parameter assumptions. This is certainly a good thing but we don't know what current managements mid or high cases were to begin with and they were certainly different than previous managements. Also, this is only one or two parameters out of many that are needed to estimate reserves. The well data has been great so far but it remains difficult to piece together the big picture for people that are very versed in it. Its nearly impossible for people who aren't specialized. Once a Elk/Antelope is certified at X.X TCF this becomes a much more straightforward story. I appreciate that Hession is trying to establish a conservative approach but if he wanted to put a floor on the stock all he would have to do is say "We are expecting Elk/Antelope to be certified at no less that 7.0TCF and up to 9.0TCF pending drilling results" The analysts would run with this and it would be instant stock appreciation. He obviously doesn't want to miss this number to the downside but at this point management must have a pretty good idea of what the range is going to be. I think its likely we hear nothing until the actual certification but thats all it would take.

Then Hession needs to go...imo.  My conclusion on this has been for several months that mgt is deliberately dragging on progress and news.  Reason to me?  They are very afraid of being bot out.  Trying to drag out the process means that a buyout suitor likely needs more data to determine what ioc is worth.  If a buyout, I would say TOT and they absolutely bring another 1 or 2 SM's in to accelerate development and lower their risk exposure.  The lack of info clarity is inexcusable to me, and is there for a mgt reason.   Wake up BOD,or excuse yourself...fwiw     trans

These conspiracy theories and demanded solutions are laughable, imo.  Every single analyst covering the Company is already assuming 7 Tcfe and basing their NPVs and share price targets on that.  They do not need any further information to do that.  Furthermore, IOC already has an independently certified (GLJ) set of P10, P50, and P90 resource estimates much higher than 7 Tcfe disclosed in their filings with the SEC.  I don't think the securities regulators would take kindly to their issuing on their own a different set of estimates, potentially creating all kinds of potential legal problems and liabilities.  Also, how could they "put a floor" under the share price that way if the independently certified figures and the analyst NPVs well above the current price have not?!

[MRP]

Maybe it wouldn't make any difference but the fact remains that Hession has never put a number on it. There are a number of reasons not to do this but at some point in time it will happen. Maybe it has to wait until the actual new estimates come in but I don't see a good reason for it to wait.

GLJ already has a certified number and two other estimators are going to make estimates that will assuredly be different from GLJ's. GLJ's latest estimate was as of year end 2014 and there has been lots of new well information in the mean time so there would be no problem with management discussing that.

Management has implied a number of times that the number will be over 7.0TCF but they have never explicitly said it. OSH has said "Elk-Antelope field has sufficient resources to underpin one 5 MTPA LNG train (basis for entry into PRL 15) with ~5 tcf 2P, or depending on outcome of appraisal, potentially two PNG LNG-sized trains requiring >7 tcf 2P"

Hession and others said six times on the last call "We believe the data confirms we have sufficient gas for two trains." I don't see the harm in putting a number behind that statement. He was asked to do so by one of the analysts and declined to do it. If you don't think it matters that is fine but I think it would make a difference.

There are two things that matter for this company in the next 12 months: 1. What is the new Elk/Antelope resource number and 2. when will we hear it.

[MartiniStocks9756]

I think we have a number of what a train needs to operate. And I think the company may have said it. Therefore, you could deduce that if it is 3,500 TCF per train and Hession has said it is enough for two trains 6 times in the last CC, then I think he declared 7.0 TCF is the floor.

[will2bgreat]

Gator, I would really like to hear your "factual" description of exactly how they "should have controlled the time to certification better". The suggestion by a shareholder that the stock action of IOC should be comparable to the majors, which have suffered extremely heavy declines for them historically, and that as a result of what's happened Hession should now be fired, seems to me so incomprehensible and frankly ridiculous that I can't help wondering what world that shareholder is living in, or whether he is really even a shareholder. IMO, and you are, of course, welcome to your opinion as well, fwiw.

That's easy Getitrt2, a timeline with a damages clause would easily accomplish this.

For all of the great upside that some continually state that MH was able to obtain in his agreement with Total, no one is asking why there was not a timeline with damages clause.

Good luck longs.

[jft310]

MRP- with the West side of Antelope under drilled Hession can't say how large the coffin might be . They can use seismics and estimate but without more wells and PET suggested up to 7 West to figure out how far West we go . Hession surely has his opinion but that surely doesn't  mean that's the number the 2 Certifiers will use . How much credit to West will the Certifiers give us ?? He doesn't know .

[Getitrt2]

Gator, I would really like to hear your "factual" description of exactly how they "should have controlled the time to certification better". The suggestion by a shareholder that the stock action of IOC should be comparable to the majors, which have suffered extremely heavy declines for them historically, and that as a result of what's happened Hession should now be fired, seems to me so incomprehensible and frankly ridiculous that I can't help wondering what world that shareholder is living in, or whether he is really even a shareholder. IMO, and you are, of course, welcome to your opinion as well, fwiw.

That's easy Getitrt2, a timeline with a damages clause would easily accomplish this.

For all of the great upside that some continually state that MH was able to obtain in his agreement with Total, no one is asking why there was not a timeline with damages clause.

Good luck longs.

Oh, really?  I doubt it. How exactly would that have worked and accomplished that?

[will2bgreat]

Gator, I would really like to hear your "factual" description of exactly how they "should have controlled the time to certification better". The suggestion by a shareholder that the stock action of IOC should be comparable to the majors, which have suffered extremely heavy declines for them historically, and that as a result of what's happened Hession should now be fired, seems to me so incomprehensible and frankly ridiculous that I can't help wondering what world that shareholder is living in, or whether he is really even a shareholder. IMO, and you are, of course, welcome to your opinion as well, fwiw.

That's easy Getitrt2, a timeline with a damages clause would easily accomplish this.

For all of the great upside that some continually state that MH was able to obtain in his agreement with Total, no one is asking why there was not a timeline with damages clause.

Good luck longs.

Oh, really?  I doubt it. How exactly would that have worked and accomplished that?

Your kidding right? It's the same way that Papua LNG project is going to do with the general contractor. The way every new custom home builder in the US works. The way every large construction/engineering project in the US works. You lay out an agreed upon schedule with a completion date and you assign damages if the schedule is not met.

[Putncalls]

I think the 7Ts is recoverable gas. IOC gets paid on gross gas plus condensate BTUs. If IOC has enough for two trains they get paid for more than 7Ts.

[Palm]

Need to read the SPA Puts. They get paid on recoverable per the instructions to the firms who will do the estimates.

[Putncalls]

Stand corrected.