What is IOC's 30% LNG ownership worth?

[Palm]

I think talk of takeover this soon is a bit premature. Comparisons to OSH have been made often with IOC and OSH is just now being talked about as a takeover target (over the last 6-9 months), and it's because PNG LNG is near production. SMs are being very careful in buying more resources and are stating such to shareholders. Hession and his team know this also and are positioning IOC to survive; at least to a similar poaint as what OSH has; production of LNG. Anything that might come near term will likely be low and not accepted (you would hope). And once the bits start to turn and we see even modest results, pps will start recovering to more reasonable levels. Hession coming in and the deal with Total has brought near-instant credibility and institutions who would not give IOC a look under the old regime are now getting very interested. If things go as planned, pps will recover and IOC likely survives for a good while yet. IMHO

As for value of the 30% interest IMO we should expect similar to what OSH has experienced. Today IOC has been given $0 in value for it. They have a 29% interest in PNG LNG. And from FID to pre-production they have doubled. From production to adding another train by 2020 they are expected to roughly double again ($15-$18 are estimates out there). I believe that IOC will have much more gas proven up at FID than what OSH did and that we could have at least a 3-train startup. Assuming this, we should be $85-$90 at FID and $170-$200 pre-production. This assumes IPI interests closed as expected, the deal with Total closes as expected and we have moderate results with the driling program this year.