'Thylacine-2' pid='71504' dateline='<a href="tel:1465138 Wrote: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.
I think you have a reasonable point. Here's the outcome combinations on voting.
1. White ballot wins (Hession and BOD). Sale is approved. Game over as IOC. OSH uncertainties begin. Will Hession take over OSH? IF so, I suspect a large number of IOC shareholders will bail out ASAP. Is there a compelling reason to stay in OSH given the multitude of other investment opportunities?
2. White ballot wins. Sale is killed. Hession and BOD remain in control. More shareholder value destruction likely to be done by the pink shirt gang. Hopefully a better deal is offered quickly. If not, then it's very bad place to be. They can't manage, they can't pick well locations, they can't drill, they can't do anything helpful to add value; only destroy value.
3. Blue ballot wins (Mulacek takes over). Sale is approved. Outcome same as no. 1, except maybe we lose more $$ due to the short term change in management. (Hence the reason to vote for the deal first before the annual board meeting if court ruling approves.)
4. Blue ballot wins. Sale is killed. Phil et al are now in control. What is their plan? High uncertainties. But there is at least hope. Phil knows how to get things done to pick well locations, drill wells, and find gigantic volumes of gas. If he does that he'll be starting all over again. He's just not too strong after that. But since the LNG deal is a deal, he should be able to keep that going. PNG, XOM and TOT are failing to realize that they need Phil and his exploration engine. He can find the large reservoirs of HCs; they can't. IT is in their interest to put him back in business. Maybe they are too blind to see that.
I'm like you here. For me the worst outcome is number 2 IF a better offer is not made and the sale dies. At that point it seems shareholders need to immediately throw out the board and Hession. Not sure what it takes to do that or how long. But who would you put in their place? See outcome number 4; who else but Phil???? So a simple way to look at this is outcome 1 and 3 have the same end point and so do outcomes 2 (after throwing out the pink shirt gang) and 4, except 4 gets you there faster at lower cost. No question that approving the sale has the least uncertainties. But getting screwed under Hession at IOC, only to repeat it at OSH would be a case of "fool me twice.....".