05-01-2013, 02:21 AM
Good question Movie. I cannot (will not) cite specific deals, but can say that I have worked a few in similar type countries/similar political challenges: and this one is relatively lengthy. A bit of blame to go around. On one hand, the sell down effort didn't really start until the NEC approved a 3.8 mtpa plant late last year; but on the other, IOC pushed its own agenda well beyond Q4 2011 when it first "engaged" with international banks to find an acceptable operator (In fact, I'd argue Phil was pushing a "more control" strategy for quite some time...and agree with Gator, that there is more on his departure than we will ever know.). On one hand, the political situation was very difficult to navigate until the Prime Minister was made official in July? 2012. On the other, IOC didnt' take advantage of the less sophisticated PNG setup...meaning if IOC had fully switched its strategy to sell down earlier, I believe the deal would have been done months or years ago. i.e. the stock drop from 99 back to the 50's in 2012 was the stocks indication that a delay had occured (and it was right).
I'm assuming the subsurface work done by interested bidders confirmed the GLJ/GCA range of recoverable resources. That is a big IF. All companies will do their own subsurface work and from a timing perspective it takes 1 month minimum...2 months time to do the work..which puts us probably end January 2013 before this was done...
Overall, it doesn't really matter, as those days are behind us (I hope). But the company has made mistakes here...and they have cost shareholders time and value.
Bam - regarding $/MCF target. I agree with you. The language in the deal announcmet and details of terms will require a lot of analysis to acurately assess the net present value of the deal. Not simple.
I'm assuming the subsurface work done by interested bidders confirmed the GLJ/GCA range of recoverable resources. That is a big IF. All companies will do their own subsurface work and from a timing perspective it takes 1 month minimum...2 months time to do the work..which puts us probably end January 2013 before this was done...
Overall, it doesn't really matter, as those days are behind us (I hope). But the company has made mistakes here...and they have cost shareholders time and value.
Bam - regarding $/MCF target. I agree with you. The language in the deal announcmet and details of terms will require a lot of analysis to acurately assess the net present value of the deal. Not simple.