One--A price per metric cubic foot for the IOC NG. Thats a dry NG deal. Per IOC mgt this Exxon deal is not a dry NG deal.One needs to look at the gross price per mcf before
Exxon paid items and then the net cash price to to IOC per mcf. The shorts will focus on the Net price to IOC and thats a HUGE mistake.Exxon is paying for certain items
Two-The condensates ,136 million barrels of them says the GLJ report. This deal involves the IOC condensates. That price that IOC receives for its condensates could over
time be more profitable than the NG sale.
Third-This deal with Exxon involves IOC participation in the LNG revenue. Source IOC mgt this week. What the number is we dont know. IOC can pay for that LNG buyin with
additional dry NG and condensates. This can easily be the more profitable than either the NG or the condensate sales. IOC owns the NG at 5 cents, trades at 60 cents per
mcf and can be sold as LNG for $14 plus per mmbtu. Thats the BIG money.
So in order to understand the Exxon deal look for 3 things, the price per mcf gross before Exxon paid items , the condensates sales price and most importantly the LNG
participation rate in the third and or 4th train percentage.Add all 3 items togetther for the complete picture.
This is why IOC mgt stated after the deal "Best Possible Outcome"