'will2bgreat' pid='64615' datel Wrote:
'Putncalls' pid='64614' datel Wrote:How many share owners want IOC to get bought out before A7?Puts, to me, that is not the question at hand. The question that scares me is, "when does the appraisal wells stop?"
We have not been given any guidance on that question. Let's take Pet's previous post that stated we may need up to 3 additional wells to define the extent of the gas boundry. IOC has no additional money coming in, but we have the Phil hope that another deal is in the works. Let's assume 3 wells, one year to perform. That puts certification at about 1.5 additional years out (and I being aggressive on the timing) and of course not having adverse effects on FID timing. Where do you think IOC's share price will be in 1.5 years with let's say $400MM in debt? Will we still have all of the majors holding their shares? If not, we have the possibility of the share price going much lower. My prediction is we never get to certification because Total will simply come in at the 50% markup to the current share price and buy IOC for the price of the certification payment. And please don't tell me that can't happen. Prior to certification, the only estimates we will have will be from TOT, IOC, and OSH. Clearly, the market does not believe IOC's estimates, and TOT/OSH are not going to speak up and support those estimates.
And where does this put the IOC business model of discover, sell down, and repeat?
MH needed to give us a very clear picture of the future of IOC in the call. We are reducing spending down to $10MM plus our share of drill costs or something to that effect, but I have not seen that at all. So we do not have a clear picture of IOC moving forward either in spending rate or business model. So one can clearly understand why people are frustrated. Being a poker player, a good starting hand is ace, king in texas holdem. However, when going up against pocket queens, ace, king is just a hope and a prayer. If they don't hit, you are losing alot of chips. That to me, seems to be IOC at the moment.
Good luck longs, I still believe in the resourse but also believe this contract with Total is not genius.
I feel sure you do not need to worry about ANY appraisal wells beyond A7, even IF it is drilled, nor any of the other issues you raised.