10-28-2012, 11:20 PM
MS on IOC catalysts InterOil Corp. (IOC): Stock Has Lagged on Lack of Catalysts; Several Lie Ahead Why has the stock underperformed?We believe that the stock has underperformed because of a lack of news surrounding a number of catalysts that the market expected in late 4Q 2010, but which have yet to be announced. Why we still like it, and upcoming catalyst With an estimated Net Asset Value of $225/share at its current resource estimate, the stock is trading at a 70% discount to NAV. We expect that an upwards revision to resource estimates and execution on monetization of the asset base, including official project sanction, will close the value gap in the coming months. Catalysts that we expect in the next 30 days include 2010YE GLG resource assessment and clarity of LNG financing by partner EWC. Potential additional catalysts over the 60 days could also include an FLNG monetization deal, a strategic asset sell-down (1-10% of Elk Antelope), spud of next exploration well, and a gas off-take agreement (for up the 2mtpa).