'mikesioc' pid='39147' datel Wrote:This is my final attempt and I'm moving on. Total is willing to pay up to $5.3 billion for PRL 15 gas, 11.79T. Mid case $2.1 billion for up to 6.5T. I've seen countless posts insisting that just E/A has 9.89T which is $4.2 billion from Total. Furthermore, Total is going to let IOC keep 30% of a new facility. Adding the up front cash just for the mid case to the back end cash flow Total gives up to IOC what does it cost Total to go forward with the current SPA based on a 2 train LNG facility? Considerably more than simply buying IOC for $6 billion, controlling everything and profiting from selling off interests as they are confirmed. Every reasonable estimate has enough gas in E/A to likely supply train 3 expansion and 2 trains for a new facility. If there isn't how much risk is there that there is ZERO gas in the rest of the leases? Zero!? What is that worth to Total and Exxon? Total can own everything they want outright for $4 billion! Exxon can take what they want and then some for another $2 billion which is what they would each pay just for the piece they want now and not have to share anything with IOC! It works any which way, 4-2, 2-4, 3-3, whatever. Total and Exxon may have already teed it up. It only makes logical sense that they have discussed it. If everyone believes their own stuff there is considerably more long term value than $6 billion. Why else do you think IOC is worth >$300 per share in some future world IF, IF, IF? Total can delay closing, allow doubt to creep in, watch the PPS drift lower, offer $60, swallow the poison pill and pay $120. END OF STORY. They already screwed IOC on the big PR. With tens of billions of dollars are stake this is not far fetched at all and more likely than not. Thinking Total and/or Exxon are going to shepherd IOC into the deal when it is far cheaper to control it all is simply naive. Machiavelli had a point. IMHO. Good luck in the coming weeks!
Mike,
This is a very reasonable and well articulated opinion. It is one that always made sense to me as well and has my support. This sceanrio has always been shorts worst nightmare which has been stated time and again not possible after the TOT announcement. It has been stated here many times that TOT would want to close immediately after IPI is taken out. It has also been stated here that the best time to take IOC out is after MI close and lease extensions approved. We are officially in the gap between how much of PRL 15 that IOC owns with the bonus of lease extensions for 6 years. I find it funny how the chatter now seems to be how large of a find IOC has in EA versus the two propane tanks of years past. My how things have changed.