'Stavros' pid='60943' datel Wrote:It's my understanding (from piecing together small snippets of information from many sources since then) that: 1. Civelli and Hession were negotiating the sale of Pacific LNG to IOC for a significant length of time 2. Civelli told Hession what he wanted $900 million CA$H plus an uplift if there was more gas than the GCA Resource Estimate of 7.1 tcf 3. Hession refused to accept that offer 4. Only then did Civelli leave the negotiating room to peddle the deal to others If I'm correct, then I wouldn't say that "Hession was outflanked by OSH" in the acquisition of Pacific LNG. Instead I would say that Hession was greedy and we as IOC Shareholders paid the price for his avarice. This happened, of course, after the Transformational Deal and IOC's PPS had already cratered.
Stavros, that sounds like a very plausible scenario to me and about like I have thought it probably happened. However, I would not look at it as a situation of IOC shareholders "paying the price" for Hession's greed/avarice, or of Hession's mishandling the situation, although we cannot know all the details, I think IOC and Total wanted Pac LNG and the IPI investors bought out, but that Total did not want to deal with them. Therefore, they constructed the deal with IOC giving up more ownership in the sale to Total than it wanted to, with the intent of replacing it with the minority interests for less or no more than the amount to be paid by Total, and with Total subsequently bringing in another partner from its interest, such as OSH or other interested party, perhaps in a later competitive process. However, those plans were foiled by Pac LNG and the willingness of OSH to pay a premium price to get in up front for sure, possibly even with the idea to begin with of potentially replacing Total with Exxon and maybe getting more interest or some reimbursement. In my view, Hession did the right thing by shareholders by refusing to pay such a premium price and more than he could be assured at that time of getting from Total for the equivalent ownership interest, particularly with cash, thereby damaging IOC's financial position and its ability to move ahead in the same manner with the appraisal and exploration programs and the LNG project, and still accomplishing the desired end result for both IOC and Total with the minority interests out by modifying the SPA and interest sale to Total. Furthermore, they accomplished that and soon closed it in a manner that ultimately prevented OSH from being able to scuttle it by knocking out Total, in spite of OSH's aggressive challenge. Perhaps Total and IOC should have tried to incorporate the minority interests into the deal to begin with, but Total probably did not want to go that route, and OSH may very well have inserted itself into the process with Pac LNG anyway. If anyone is to be criticized or blamed for any resulting delays, the extent of which I would question anyway, I think it should be OSH and Pac LNG, who were just pursuing their own interests, not Hession. I don't think there is much basis that I have heard for anything else. Furthermore, it may have all worked out for the best, with no payment of more cash or issuance of deflated stock or debt by IOC.