03-20-2014, 03:16 PM
Total has apparently stated or "is known to have stated" that they are committed to PNG gas (conspicuously not noted as IOC gas) and there are now possibilities that were "previously unattainable." Before the SPA IOC was valued over $4 billion and a deal was thought to be a catalyst, not a catastrophe. The present market cap combined with the value put on PRL 15 by OSH puts IOC in a corner. Why would anyone pay up to $5.3 billion for 61% of the gas from one lease and give up 30% upside from production to a company now worth $3 billion? Total's goal of "PNG gas" is attainable by joining/cooperating with Exxon and OSH. PNG rubber stamps that deal. Most here seem to agree that PRL 15 has enough gas to support expansion and a new LNG facility. Let alone Triceratops, Bobcat, Wahoo, etc. It defies logic to wax poetic about the string of pearls and how IOC will be a $10, $15 or $20 billion dollar company in a few years when someone can own it all for what they will pay for 61% or less of PRL 15. I find that bizarre. At the current market cap it will be a small miracle for IOC to remain standing and get an interest in either PNG LNG or a new facility with Total. Not my expectation a few months ago but we are in a situation with previously unattainable (unimaginable) possibilities. $100 is still a great upside. Let's hope Hession is successful in his rabbit hunting.