Reuters thoughts on Total counter bid

[Crippsfl]

i would say that of total did not at least try to buy out the value of their contract it would be fiscally irresponsible of them. It is not IF they will, it is how could they NOT bid?

TOT's move here will be dictated on the interest they've received in their pre marketing efforts of Papua LNG's LNG and TOT's internal E/A resource #s.

If the sales interest is weak, TOT may just cut bait, sell their E/A stake to XOM.  This eliminates  bid war to lose, eliminates future payments due to XOM and saves face by selling to XOM at break even.

If sales interest is strong and E/A #s are high TOT will bid and will win.

And why would XOM want to buy out Total's interest in PRL15?  As it currently stands XOM would stand to get perhaps $2 Billion from Total if they buy IOC.  So it would be better to give Total cash AND forego the resource payment that they would get from Total??  They would be better off holding Total's feet to the fire, collecting the cash from them and, basically, having Total pay for the IOC buyout.  Total is in a box and the only way out for them is to try to outbid Exxon for something that both companies need and want.

But let us say that for some mysterious reason, it appears Exxon buys out Total's interests.  At that point, I would be inclined to vote NO on an Exxon deal.  I would rather have them pay us the resource payment and keep the rest of the prospects.  Of course, with our BOD and CEO, ZERO chance of that happening.

It should be an interesting couple of months