06-06-2016, 12:57 AM
My investment thesis is that we are in the early stages of a new bull market in oil. I want to have my capital in stocks which are going to participate fully in the bull market. My time horizon is two or three years. I considered selling some of my IOC in Feb and March and putting the money in US and Canadian shalers. Not doing it is just one more instance of my being hypnotized over our resources and screwing up over IOC.
If the deal goes through I expect Total and OSH to proceed with evaluating and developing the vast resources we have been salivating over for years. The government of PNG will be happy. And I believe OSH will participate in the new bull market, making OSH shareholders happy too.
If the deal is not a go, what then? Hession's plan was to drill and monetize the prospects. But he gutted the E&P capability of IOC. The new IOC under Hession doesn't even know how to drill wells. The drilling program was an expensive disaster and the plan failed.
So what now? Will Phil rebuild the E&P capability if he takes over? That could take a long time. Or would he look for better deals selling the company? I dread the prospect of the deal being rejected and Hession staying on.
The deal with OSH offers a measure of security and good prospects, IMO, for substantial capital appreciation. No deal and the IOC share price will likely collapse. It might be a long climb back up to where we are now. Would the company participate in the new oil bull? Who knows? No deal and everything is up in the air. Maybe the company would be taken over at a lower price rather than a higher.
If I thought the deal was going to be rejected by shareholders I would sell now and move on.
If the deal goes through I expect Total and OSH to proceed with evaluating and developing the vast resources we have been salivating over for years. The government of PNG will be happy. And I believe OSH will participate in the new bull market, making OSH shareholders happy too.
If the deal is not a go, what then? Hession's plan was to drill and monetize the prospects. But he gutted the E&P capability of IOC. The new IOC under Hession doesn't even know how to drill wells. The drilling program was an expensive disaster and the plan failed.
So what now? Will Phil rebuild the E&P capability if he takes over? That could take a long time. Or would he look for better deals selling the company? I dread the prospect of the deal being rejected and Hession staying on.
The deal with OSH offers a measure of security and good prospects, IMO, for substantial capital appreciation. No deal and the IOC share price will likely collapse. It might be a long climb back up to where we are now. Would the company participate in the new oil bull? Who knows? No deal and everything is up in the air. Maybe the company would be taken over at a lower price rather than a higher.
If I thought the deal was going to be rejected by shareholders I would sell now and move on.