09-09-2015, 08:49 AM
'Putncalls' pid='62569' datel Wrote:Here is what Pavel said to me: At $50 oil, LNG economics worldwide would be subpar, and IOC’s LNG project is no exception. That’s one reason why we certainly don’t look at $50 oil as something that will continue forever. But, in any case, let’s underscore that IOC’s resource selldown to Total – which will hopefully result in a $1 to $2 billion cash payment by mid-2016 – is an entirely separate matter. Total is contractually obligated to buy this gas resource, no matter what. The decision on whether to proceed with the actual project construction will probably not be made until 2017, after the resource selldown is completed.
That aspect of the cash coming due to IOC is an extremely important factual point that I think most here already understand, but which I doubt is fully understood in the market, as reflected, or perhaps I should say not fully reflected, in the share price.
Perhaps I should mention, by the way, that Pavel appeared on CNBC today, with a corner insert showing three stocks he was recommending, Occidental, Marathon, and InterOil. The interviewer discussed the first two with Pavel, then ended the interview without any discussion of IOC, probably because of a policy of not mentioning on air stocks below a minimum market cap.