'Northoil' pid='79219' dateline='<a href="tel:1485615 Wrote:
It wasn't a complaint. IT was a notification that they have a problem with this deal. They can choose to address it now, ignore it or allow it, to become a bigger, deal killer problem later. The guy from MacKenzie agreed it was a problem and suggested they might have to have a info blackout on A7 prior to the meeting to put everyone on the same level. OF course that can't work. IF there is material info before the vote it has to be disclosed. How they will resolve this is unclear. It creates incentives for lots of corrupt behaviors on the part of IOC and TOT, who now is the operator of the well. But the deal is vulnerable if important information is avialable, if it is not fully avialble to all shareholders before the vote up to the actual final day of Feb 14. This 4 day gap beteween proxy voting deadline of Feb 10 and the actual meeting on Feb 14 is a big problem for them. Phil and company have been informed too. I think my posting is t he first to reveal that this is a problem with the deal. We'll see how this develops.
Because it is large impact and it WILL BE EITHER a positive OR a negative to the valuation, they should be reporting the status daily until the deal is done.
Your point #1. Of course they know all about A7 NOW. But the MIC assumes A7 would be largely done before end of January; at least that is what these statements say. Page 108 of the MIC says this: "InterOil expects that the Interim Resource Certification process will commence in January 2017." Also on page 117 it says this: "Following the conclusion of the drilling and potential testing of the Antelope-7 well and receipt of the Notice, the Interim Resource Certification process is expected to be launched (InterOil expects that the Interim Resource Certification process will commence in January 2017)." So NO. IOC didn't expect to be in this situation. This is NOT XOM's document, so we don't know what they thought. So yes the current situation is recently "new" to IOC and XOM. They weren't expecting this, and the MIC did NOT anticipate this.
Your point #2: You are thinking only in terms of a shareholder who is voting in favor of the deal. Sure, if they like it now, then an improvement of the payout will make them happier. But the deal has to be fair for all shareholders consideration. For people who are against the deal and plan to vote no and/or dissent, this is very different. There are various legal implications if one dissents. A7 will determine where the fault is and change the volume calculations and thus change the value of the company. At $3 per 1000 cubic feet, an additional TCF is $3 Bln of gas, not counting liquids which have higher value. If you know that before the vote, then you know exactly how that affects the payout vs. not knowing and just hoping for a good recertifcation outcome. So, believe it or not, some no votes might be swayed to yes votes with A7 results. So that eliminates a lot of uncertainty in the final payout BEFEORE THE VOTE if the information is available and appropriately disclosed by IOC. That's at rock bottom USA natural gas prices. Gobal prices are higher. When IOC's market cap is only around $2.5 Bln, that's real money. So a voting plan which locks out most of the shareholders from changing their vote (i.e, proxy voters) 4 days before the actual meeting, after whichcritical material information might become available before the Feb 14 meeting vote, is in big trouble in my view. Information which can add value greater than the market cap of the company shortly before the vote is extremely material. Hession and his board have screwed up bigger than ever. All shareholders have to have access to the same material information to cast their vote. This system creates two classes of shareholders - those that can receive the lastest on A7 right before the vote on Feb 14 and those that cannot change their vote after Feb 10, regardless of what new material information appears. They have to repair this to make it equally equitable or the court will potentially kill the deal again if it is challenged. That's why I say it's grounds for termination of Hession. IMHO.
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Kaliboo – I can understand why you’re in a tizzy about this. Whether you even CAN vote dissent at this late date is questionable, but for goodness sake, think through some of your statements and conspiracy theories and save yourself several paragraphs.
You say: “So yes the current situation is recently "new" to IOC and XOM. They weren't expecting this, and the MIC did NOT anticipate this.” What has the MIC, published on Jan.13 and scripted well before that, have to do with their daily current information on A7 and their understanding of its potential impact on voting which is clearly stated in that self-same MIC? The companies and their lawyers are on top of the situation, but I’m sure would thank you politely for your comments and go back to the 50 different scenarios they’ve constructed.
The real issue is the “gap” between Feb. 10 and Feb.14. I agree you can’t have a blackout. An easy solution is to release all info on A7 by the 10th and simply shut down for 4 days. That way, everyone has the same information going into the meeting. I’m not sure Total and Oil Search would go along, but IOC/Exxon might have to pay for it. But, I’d guess they’ve thought of this,too.
A word on your post/thread on exploration assets. I’m not going to respond to it because it’s wrong on so many levels I have better things to do. Yes, prospects are nice to have, but the present financial value of a prospect is zero. As for hyped “discoveries”, the statement: "proved reserves … determined from exploration always increase when appraisal drilling begins." I’m sure the oil industry will be glad to hear that. And how dumb was I to think actual drilling results mattered!? And those dry appraisals (like A7, maybe?) I wanted drilled, were just a figments of my imagination since reserves always go up.
Take a deep breath.
My clarifcation response to NorthOil's last paragraph can be found in my original posting Valuation of IOC Exploration Assets.