12-13-2013, 12:29 AM
Clearly the market agrees that IOC should get no "reward" for undiscovered gas or LNG plants that come on line (maybe) in 2020. I agree with CAC. We got much worse than nothing for the undiscovered gas and an uncertain LNG plant - we got punished for the uncertainty of future payment. I don't think Hession is stupid - just very naïve (or badly advised or both) as to how he thought the public markets would view this deal. He totally backloaded the value of this deal and left very little on the front end - I would have much preferred $1/MCF NOW with only 25% of the LNG plant (down from 30%) regardless of how you value each piece. The current shareholders deserved more consideration in Hessions thinking while negotiating this deal - he needed to better balance the competing interests better.