10-23-2013, 11:18 PM
"Bidding war" sounds great, and it is a term that has been tossed around here aplenty for a long time. I believe this bidding war does exist, but the real question is what is that going to mean for IOC? Lately I've seen figures around $1/mcf used much on this board. Not long ago there were numbers much higher given by knowledgeable people on this board that came out to more like $3/mcf.
Now I realize the whole $/mcf valuation may be old fashioned these days as it now seems likely IOC will get ownership in the LNG plant and various infrastructure and drilling paid for, etc., but in some way the deal has to be valued. Will this bidding war really lead to the lofty valuations that many here believe IOC is entitled to? So "bidding war," sounds great, and of course a bidding war is supposed to mean there is a competitive environment from which the highest price can be gotten, but what we need to know is WHAT IS THAT PRICE?
So tell me we're getting a great price and I'm happy. A bidding war just means the price will be the best we could get, but does not guarantee the price is all that good.
Now I realize the whole $/mcf valuation may be old fashioned these days as it now seems likely IOC will get ownership in the LNG plant and various infrastructure and drilling paid for, etc., but in some way the deal has to be valued. Will this bidding war really lead to the lofty valuations that many here believe IOC is entitled to? So "bidding war," sounds great, and of course a bidding war is supposed to mean there is a competitive environment from which the highest price can be gotten, but what we need to know is WHAT IS THAT PRICE?
So tell me we're getting a great price and I'm happy. A bidding war just means the price will be the best we could get, but does not guarantee the price is all that good.