08-14-2013, 03:04 AM
Nice post Lt. And as far as expectations on the XOM deal, Pavel says it:
"Selldown: You weren't expecting a play-by-play update, were you? At the risk of repeating what we have written before many times, let's be clear: management did not, will not, and should not specify any precise timetable for making a deal announcement. The new CEO, Michael Hession, is sticking with the approach, which we think is entirely correct, of not self-imposing arbitrary deadlines, nor publicly discussing the "inside baseball" of how the talks are proceeding. The key questions that remain vis-à-vis the Exxon (XOM/$89.89/Outperform) transaction are the same as we have previously had: (1) the amount of resource to be monetized; (2) the multiple ($ per Mcf) underpinning the resource selldown; and (3) whether InterOil will thereafter move forward with a stand-alone liquefied natural gas (LNG) project.
Hession lays out his strategy. While (predictably) not giving any meaningful detail on the Exxon talks - other than confirming the exclusivity of the talks - Hession made several comments about what he envisions with regard to long-term strategy. First, he clarified what has already been entirely apparent: InterOil does not plan to be the operator of any major resource development projects, but remains open to future partnerships, including vis-à-vis a future LNG project (after, of course, the Exxon transaction is finalized). Such a project is a viable possibility, but emphatically not a near-term priority. Second, as the company gets ready to resume exploration after an extended hiatus, the aim is to bring in more drilling partners, thereby reducing cost exposure and operational risk. The drilling program on the PPL 236 block includes the multi-Tcf Wahoo prospect, long mentioned by the company. Third, Hession mentioned his desire to streamline corporate structure, with resource monetization at the center of the business model."
"Selldown: You weren't expecting a play-by-play update, were you? At the risk of repeating what we have written before many times, let's be clear: management did not, will not, and should not specify any precise timetable for making a deal announcement. The new CEO, Michael Hession, is sticking with the approach, which we think is entirely correct, of not self-imposing arbitrary deadlines, nor publicly discussing the "inside baseball" of how the talks are proceeding. The key questions that remain vis-à-vis the Exxon (XOM/$89.89/Outperform) transaction are the same as we have previously had: (1) the amount of resource to be monetized; (2) the multiple ($ per Mcf) underpinning the resource selldown; and (3) whether InterOil will thereafter move forward with a stand-alone liquefied natural gas (LNG) project.
Hession lays out his strategy. While (predictably) not giving any meaningful detail on the Exxon talks - other than confirming the exclusivity of the talks - Hession made several comments about what he envisions with regard to long-term strategy. First, he clarified what has already been entirely apparent: InterOil does not plan to be the operator of any major resource development projects, but remains open to future partnerships, including vis-à-vis a future LNG project (after, of course, the Exxon transaction is finalized). Such a project is a viable possibility, but emphatically not a near-term priority. Second, as the company gets ready to resume exploration after an extended hiatus, the aim is to bring in more drilling partners, thereby reducing cost exposure and operational risk. The drilling program on the PPL 236 block includes the multi-Tcf Wahoo prospect, long mentioned by the company. Third, Hession mentioned his desire to streamline corporate structure, with resource monetization at the center of the business model."