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[Palm]

Mind you, when the timelines were confirmed by these Total execs they were aware of what was about to unfold, no doubt.

Exactly. Assuming the sale would go through it's full-speed ahead. However, a defeated/stalled deal likely results in delayed plans. Total has likely lined up strong buyers for the increased ownership % that they have agreed to buy from OSH. Doesn't mean it happens day one, but if plans change, planning changes. Total has many irons in the fire and they have the ability and asset base to wait until times are right. They can shift as necessary among priorities. As they should, they consider the LT.

And if PM somehow is put back in the captain's seat, Total will act accordingly. A super small fish will not make Total flinch.

Don't get me wrong; I loved Phil's drive and can-do/must-do attitude in not giving up in finding the resources, but that is where he was most effective. And I do believe that he stood strong for shareholders and demonstrated it by stepping up to the plate strong in owning shares. It was his baby. He's still proud of it. Understood. But..... Total has spoken and PNG has spoken. And OSH is PNG's baby.

[admin]

I hear you, Palm, and it's good that the other side is also eloquently argued here. Meanwhile, I keep arguing myself as I somehow cannot make up my own mind, especially because there is at least one crucial piece of info missing, the certification outcome.

Just for arguments sake, if Antelope 7 is a hit and the certification comes at or even above 10T, InterOil could survive and even prosper, especially with a more frugal management.

Then there is the part in me that simply wants Hession and much of his board gone..

[oliver.gump]

I hear you, Palm, and it's good that the other side is also eloquently argued here. Meanwhile, I keep arguing myself as I somehow cannot make up my own mind, especially because there is at least one crucial piece of info missing, the certification outcome.

Just for arguments sake, if Antelope 7 is a hit and the certification comes at or even above 10T, InterOil could survive and even prosper, especially with a more frugal management.

Then there is the part in me that simply wants Hession and much of his board gone..

Did you mean to misspell "To be punished"?

[Palm]

The price will go back down if the deal is voted down because it's only where it is now because of the negotiated deal. Simple logic. And IMO should the deal go bye-bye without a pending new deal, pps will drop into 20s as rumors of deals got it over 30 prior to the announced deal. And if the deal goes down it's very possible Total finds ways to delay Ant 7 drilling/testing and the cash bleed would continue. Then you have possibility of Hession being gone and no one wanting to come sit in the chair. Cash would very much be affected by a deal being voted down. Very much.

All of what you say is likely true, but I still choose to believe when Total's CEO says A7 will be complete and certification in progress by the end of this year it will happen. In fact, I suspect that OSH and Total might choose to stop the well in progress and/or proceed immediately to certification.  After all, it was Hession that pushed for A7, not the others.

The implications of voting No in the event the current board is retained needs to be a major topic of conversation.  Demanding immediate access to the details of the OSH appraisal for Pac LNG is first order of business. Plan that any farmdowns will of neceissity consider that liquidated damage clause and thus may be limited in size.  Hession will somehow have to be removed.

The discussions of lawsuits/discovery, demanding "immediate" access to details have to be thought of in the light of reality. People talking about discovery, etc. must realize that this normally is not a quick process. It can take months and months. During that time all progress activity likely comes to a standstill because of uncertainty. Think about the Arbitration that OSH perpetrated; a fairly simple matter overall. IOC/MH said it would only take 3 months. Ended up close to a year. In the mean time, cash gets spent, pps drops ........... It's business.

[admin]

["Did you mean to misspell "To be punished"?"]

No, not really (apart from a couple of hours last night when I got the wrong end of the stick about the SPA).

Hession basically is just another suit. It looked like what the company needed after swashbuckling Phil, but with hindsight, perhaps not.
He's operating within a system that has evolved, which I happen to think took a big turn for the worse, but it's more the system than the individuals that is sub-optimal. At least that's my view.

[Palm]

I hear you, Palm, and it's good that the other side is also eloquently argued here. Meanwhile, I keep arguing myself as I somehow cannot make up my own mind, especially because there is at least one crucial piece of info missing, the certification outcome.

Just for arguments sake, if Antelope 7 is a hit and the certification comes at or even above 10T, InterOil could survive and even prosper, especially with a more frugal management.

Then there is the part in me that simply wants Hession and much of his board gone..

"InterOil could survive and even prosper, especially with a more frugal management."

That statement makes a very sketchy (IMO) assumption; that IOC is still a "desired" entity in this project and in PNG. It's been made clear several times and very clear in this deal. Total has to carry them in drilling = weak partner. The Certification payment could be justified when they deal was originally struck, but not now. How many times did we all say it would never happen once oil and LNG prices dropped? Total could/would simply buy IOC out rather than pay that amount for "just" PRL 15.

Yet now we argue the opposite. The times have changed and in effect Total has said "We will not pay that amount with the changes quickly happening in this industry. In effect they HAVE bought IOC in this deal and eliminated the weak partner; and the project now works in this new energy environment. All the delays in PM's last years stretched things out into the years of industry change. That's the way I see it. It's painful, but IMO very real.

[admin]

How many times did we all say it would never happen once oil and LNG prices dropped? Total could/would simply buy IOC out rather than pay that amount for "just" PRL 15.

Well, there is that pesky little thing called the SPA, which is a legal document..

If we say no to the deal, then let them buy us out..

Yes, an independent IOC is the weak partner. However, and I've made the argument before, but there is a modicum of leverage one can derive from that if other avenues (like OSH's takeover) are closed. That leverage is as big as the NPV difference between this project and the next best in Total's portfolio, basically. It is probably not zero.

If the deal with OSH fails, they can't just wish IOC away, or walk that easily from PNG, especially if the certification payment is substantial.

[Palm]

Once you have to get legal in an agreement everyone loses and the financially strong party "wins" by dragging things out in court. There also is the JOA for PRL 15 in addition to the SPA. So IOC post winning a vote that stops the deal (if that's possible) now says, OK let's move ahead to drill as we have all agreed on Ant 7. Total says, OK once the PNG gov gives us permission to drill. Gulp, PNG liked the deal. How long can they drag things out and IOC can do nada.

But PNG moves at PNG speed and says in November, you can now mobilize the rig and drill when all is good to go on your end. IOC cash still daily going out the door and is not carried on Ant 7 well (per the legal document SPA). Things get going and the well proceeds and finally gets to TD. Now we must test and to be sure we want to test for connectivity to rest of formation as we may hit nicely but did we maybe cross a fault? We MUST be sure. All this goes for over a year from now.

At some point a cash depleting entity staring Dec 31 deadline for the $400 million LOC cries "foul" and files a Claim/Dispute. What?!! Says Total. Well we just have to see this through now........

Tick tick tick. "Utilize the shelf" come the pleas. Issue debt, issue equity. Do something until we can get that elusive Certification........

[ArtM72]

There is some point where dragging this project along becomes bad for Total. If oil were still down at $25 or $30 it might be a different matter. If western Pacific nations were in recession it might be a different matter. If the PNG government didn't need the project to move forward quickly it might be a different matter. If the oil construction and services industry capacity use remains in depression it might be a different matter.

You might be right, Palm, but I have to state the delays we have seen are more likely to have been caused by Hession than by Total. In fact, I can't remember a single instance where the certification delay can be placed at Total's feet. Arbitration with OSH? Corkscrew wells? Antelope 7? You could just as well make the inference Patrick Pouyanné is the only stablizing influence in PRL 15.

A more interesting question is why they didn't drill Antelope South as was specified in the SPA. My guess would be Hession has negotiated it away in favor of a carry at A7 instead. Why do I think that way? Just a wag.

[ioc.aussie]

I fear you are correct. IOC has stuffed up on every occasion and must look incompetent to its parteners during the drilling program.

Total needs strong and financially capable parteners.

Is it the case that EA is only 7 or so Ts and Hession has been nagging the Parteners to drill A 7  hoping for another 2 Ts as a pure

survival tactic.