'Getitrt2' pid='33227' datel Wrote:
'Daveontb' pid='33211' datel Wrote:Assuming 9 Tcf, I get a weighted average of $ 0.96 per Mcf. Discounted for 18 months that $ 0.84 per Mcf. Stock is going to dive.
That does not include the up front and other fixed payments, and a value for the 30% interest in the LNG, right?
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I think so, but I wish Hession would have been much more pointed in explaining what the 30% retained interest really means. If I understand it correctly, IOC is sort of getting paid twice on the same gas, right? They are getting the $1.29 (assuming 9+ T's) in cash at certification...but then are also getting 30% of the profits after the same gas is processed and sold, right? I think he should have really emphasized that this transaction is not at all like other transactions whereby someone simply "sold gas" for $1.29 and was then out of the picture.
The same holds true about the expected return for the extra gas they may find in PRL 15. When Chris McDougal asked about how the 100M per tcf would be paid, Hession sort of begrudgingly agreed with McDougal's figure of $.33 per mcf for that extra gas. Why didn't he jump out of his chair to say "No, Chris, it's not just .33 per mcf because we aren't giving up all of our interest in it. We still retain 30% of the plant/gas profit, so if you factor that in, the .33 is inaccurate and way too low."
I didn't hear a single word from them as to how the 30% interest will eventually be turned into additional cash. Maybe I misunderstannd what the 30% means (or how it will be monetized) but I hope the new press release will address this so that the deal-evaluators can factor it in to the analysis.