IOC re-opens bidder door

[Palm]

XOM does not walk away from this huge gas-buying opportunity. Gas (and oil ofcourse) is XOM's core-business!
I am convinced it is negotiation-tactics from the bigboy (XOM) to try to scare the little boy (IOC) into selling it cheaper.... they'd better think twice to persue this posture!

To boot XOM recently stated that PNG is their primary focus and hub for their Asian development.  So how important does ALL PNG gas/liquids become to a company that just made that statement?  If one looks at what all XOM is doing in PNG right now you will see that they are working at securing gas finds all down the "string of pearls".  Look at the NGE presentation that Tree pointed to this AM.  Recently XOM/OSH purchased PPL 277 from NGE and that PPL lies right in line with Tri/PRL15/Wahoo.

Did XOM approach IOC with the idea of going into exclusive negotiations? I believe that was the case

Did XOM do that with the thought they could lock up IOC and bleed things out to the point IOC cried "uncle"? One of the oldest negotiating tricks in the book

Would Hession have agreed to exclusive negotiations had he been at the helm at the time exclusive negotiation was proposed? I would guess not, based on his record as pointed out by Getit and others

Exxon wants the gas; in fact needs it or their statement of the importance of PNG as a whole in their strategic planning becomes mute shortly after they said it.  Hession and his colleagues and the IOC team know what's there and so does XOM and so do others.

I disagree that because the exclusive period has ended the next offer(s) will be inferior.

I also disagree that NOW is the time for IOC to put itself up for sale.  That would be an act of desperation.  As we have said, and as analysts of OSH have said about them.  The best time for a sale is just prior to production when pending cashflows can help pay for any buyout.

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Well stated.  I agree with almost all of that.  My only qualification would be with regard to a buyout.  The best time for XOM to buyout IOC might be just prior to production...but the best time for RDS to buy IOC would likely be before a large chunk of IOC's valuable assets has already been gobbled up by XOM. That would be right now.

From that standpoint I agree; would be the opportune time for someone to come with an unsolicited buyout offer and hopefully it would start a bidding war.  I was more responding to what I thought I read last night where it was stated that there is a bit of angst with large institutions and they are pushing IOC to sell the company.  A difference between "putting oneself up for sale" and being approached by a Shell with an unsolicited buyout offer.  Putting oneself up for sale at a time like this would be seen more as an act of desperation I think, but agree with you.  And XOM knows that an unsolicited offer to buy IOC would screw up their PNG strategy most likely.  So they try the exclusive while at the same time talking to others about their smaller and more expensive prospects.  All good and necessary business, but also part of the negotiation strategy; make it look like there are other equal opportunities to IOC's assets.  And Hession knows there is nothing out there as desireable as what IOC has.  So he draws the line on the exclusive.  Now IOC can and is talking to others again, with reports of offers coming in soon after Hession is on board.  He's playng this just right with the hand he was dealt when he assumed the CEO position.