Article deleted from Upstreamonline – a confirmation of Shell’s plans to acquire IOC?

[kommonsents]

While speculation about what is going on with only hints and tidbits of information and a lot of reading between the lines is fun, it clears nothing up for me. There is a lot of potential answers as to why it is taking so long and the correct answers may not have even been discussed yet. IOC could be working on two, three or more deals, all interlocking, that may require tweaking in order to finally mesh with all parties. We just don't know. What we do know is that IOC has some solid assets and they will be monetized soon, if for no other reason, than that they are cheap to buy and the demand is over-subscribed. One or more deals will be announced in the near future, IMHO, and so I wait. It looks like we will make new highs soon and that will further validate IOC.

Kommon,

You're right they "could" be working on multiple deals like you said that are all interlocking but we have no idea. The only thing we know is that Interoil entered exclusive negotations with XOM months ago and that "the major terms" have been agreed to. We have not been drilling all year, and its my understanding further delineation wells will be necessary to firm up E/A numbers. Driling takes time, especially in the jungles of PNG. We are not drilling Triceratops and with each passing day we grow closer to 2014. It would be quite an unfortunate set of events if 2013 is just a wash because the lawyers are sending papers back and forth rereading the same documents over and over again while our rigs sit idle, and our resources in 2013 are the same as 2012 because of lack of drilling.  Seems like a dramtically lost opportunity to me with some many prospects in the fold and "jewels" yet to be discovered in our portfolio.

Regarding your comments that our resources are "cheap to buy" and "demand is oversubscribed" I certainly hope that those aren't knowns. It was my understanding that we have been seeking a premium on our natural gas because of the condensates, low cost and proficient flowing wells. Now if that is no longer the case that I'm even more confused as to what has taken so long.

 I know I'm in the minority here, I recognize and understand that.

What I meant by "cheap to buy" was that, similar to mining operations that mine other metals while mining the primary metal, the other metals can result in a "negative cost" to mine the primary metal.

IOC is in a similar situation with their wet gas.  The value of the condensates will reduce the costs to produce the NG, the primary commodity.  I don't know what the actual numbers are off-hand, but it is probable that the net cost to produce the NG will be negative after realizing the revenue from the condensates, possibly even oil if found in adeguate quantities.  I think this has all been discussed here before.

The comment that the "demand is oversubscribed" is in reference to the demand and price of LNG around the world.  Prices are high due to the growing demand versus supply and trending higher over the years.  That trend will probably continue into the foreseeable future until the next fuel, perhaps hydrogen, becomes more technically advantageous.

I believe NG and LNG is our transitional fuel for energy including transportation for the near and medium term future.

IOC has a very advantageous cost structure as well as very promising future discoveries in their unexplored/underexplored areas.

I agree with you that IOC should be drilling, at least based on what we think we know.  Perhaps there will be some clarification on that in the next CC.  At least, I hope so.