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Slide #16- And this is a 'crappy deal'??
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10-30-2014, 05:53 AM
Mike also seems to think that while Hession gave away the farm to Total only Total would be interested in acquiring IOC, and that at a tiny multiple above today's current bargain basement price. He's just trying to talk down the value potential of IOC, that's all. To what purpose? Certainly not to educate this board.
10-30-2014, 06:47 AM
'Palm' pid='51437' datel Wrote:Well said katy. The deal that was struck was done after negotiations with several majors, but the ONLY one that was willing to pay for the upside potential was Total. Hession has mentioned that a couple of times. The base deal was done at a market price with "show me" clauses for the upside. That's pretty unheard of in this industry. Then they were able to strike a deal for any undiscovered hydrocarbons. Not at the same base deal price /mcf, but again very uncommon in the industry. And "Mike" wants to continue to say that Hession gave it all away, including any upside. Noise. Has Hession been outflanked on the IPI situation? Possibly, but that is yet to be seen. Energy is a nasty business and management has to have the attitude of a cornerback being burned on a pass play; you learn, adjust and make the next play. Big, nasty "game".
It is indeed a rough game and your cornerback analogy is apt. Quite a lot of people prefer certainty and my suspicion is that engineers and other technical people may want it more so, thus the quest for data to reduce uncertainty. When faced with differing views of the future, the contingency agreement can often bridge the gap by allowing each party to see "benefit" if right. Of course, opting for a contingency component immediately introduces other variables to be negotiated in addition to the trigger metric itself, such as who measures, and how and when the measure(s) are made, all in addition to the payment and details thereof if the contingency is found to be met. Note that all of this holds for any kind of negotiation in which the parties differ about the future. Some negotiators really don't like contingency payoffs which might in the future prove to be beneficial to the other party because second-guessers will say that they "gave away" benefit, even if the benefit appeared to be of a low probabilty at the time of the negotiation. But even if a contingency arrangement is not preferred, it may be the only way to bridge the gap faced in trying to close the deal. katytrader
11-03-2014, 01:35 AM
The deal that was on the table with Exxon certainly would have met PNG demands (O'Neill was proud as a peacock over the Exxon deal and basically said it was a done). Hession came in at the 11th hour and kicked Exxon to the curb to cut a deal with Total for everything while resetting the clock to 10 years for a payoff for shareholders so that Hession can have job security. The market was expecting a deal with Exxon and failed to get it. What it got was Hession’s ten year odyssey. The result is obvious. If indeed "political coercion" was involved we very likely have more to worry about. Furthermore if PRL 15 turns out to be as great as Hession believes we could have had a deal with Exxon and Total. That was our upside with negotiating leverage based on how large PRL 15 proves to be. Now we are obliged to Total for everything (a needless give away at a cheap price) and Exxon may get their expansion gas anyway. Is that clear enough for you? Total is not the only potential buyer but they have control of the most assets with the cheapest option. OSH is holding the other and has the favor of PNG. Hession has kicked the certification can down the road so as to possibly run afoul of another PNG requirement. PNG will not be extending any time lines. More political coercion anyone? Hession has limited our options every step of the way and another wall is quickly approaching. I've always maintained that a buyout is preferable after WBR results and certification. So far WBR have been a failure. It is part of the business (Hession told us the chance of success was 1 in 10) but could other drilling locations have proved better? That's a legitimate question. So is why did Hession not include IOC’s experienced drilling experts from day 1? If you believe in the “string of pearls” (aka unicorns) it is not me that has been fumbling and negotiating away our leverage. That distinction belongs to Hession. Don’t assume silence from Chandler or holding his position to imply satisfaction with Hession. As far as constructive contributions I'm still waiting to see the first correct assessment of IOC and its valuation in reality. Reality today is $56. Anyone have $56 a year after the biggest deal in the history of the company and 9 months into the new drilling campaign? Bernstein is the most comprehensive analysis and I do concede if everything turns out best case this may all be worthwhile. But none of the analysts have ever been correct and certainly none of the thought police here. It's been nothing but have some kool aid and wait for the unicorns at every new “buying opportunity.” It’s laughable. My sincerest hope is that we get some positive drilling and certification figures and sell the company to the highest bidder before we wind up against another wall and are vulnerable to god only knows what risk. Fair to say I’m not the only one. Good luck.
11-03-2014, 02:20 AM
'mikesioc' pid='51528' datel Wrote:The deal that was on the table with Exxon certainly would have met PNG demands (O'Neill was proud as a peacock over the Exxon deal and basically said it was a done). Hession came in at the 11th hour and kicked Exxon to the curb to cut a deal with Total for everything while resetting the clock to 10 years for a payoff for shareholders so that Hession can have job security. The market was expecting a deal with Exxon and failed to get it. What it got was Hession’s ten year odyssey. The result is obvious. If indeed "political coercion" was involved we very likely have more to worry about. Furthermore if PRL 15 turns out to be as great as Hession believes we could have had a deal with Exxon and Total. That was our upside with negotiating leverage based on how large PRL 15 proves to be. Now we are obliged to Total for everything (a needless give away at a cheap price) and Exxon may get their expansion gas anyway. Is that clear enough for you? Total is not the only potential buyer but they have control of the most assets with the cheapest option. OSH is holding the other and has the favor of PNG. Hession has kicked the certification can down the road so as to possibly run afoul of another PNG requirement. PNG will not be extending any time lines. More political coercion anyone? Hession has limited our options every step of the way and another wall is quickly approaching. I've always maintained that a buyout is preferable after WBR results and certification. So far WBR have been a failure. It is part of the business (Hession told us the chance of success was 1 in 10) but could other drilling locations have proved better? That's a legitimate question. So is why did Hession not include IOC’s experienced drilling experts from day 1? If you believe in the “string of pearls” (aka unicorns) it is not me that has been fumbling and negotiating away our leverage. That distinction belongs to Hession. Don’t assume silence from Chandler or holding his position to imply satisfaction with Hession. As far as constructive contributions I'm still waiting to see the first correct assessment of IOC and its valuation in reality. Reality today is $56. Anyone have $56 a year after the biggest deal in the history of the company and 9 months into the new drilling campaign? Bernstein is the most comprehensive analysis and I do concede if everything turns out best case this may all be worthwhile. But none of the analysts have ever been correct and certainly none of the thought police here. It's been nothing but have some kool aid and wait for the unicorns at every new “buying opportunity.” It’s laughable. My sincerest hope is that we get some positive drilling and certification figures and sell the company to the highest bidder before we wind up against another wall and are vulnerable to god only knows what risk. Fair to say I’m not the only one. Good luck.
Mike: Do you know exactly what the deal on the table was with Exxon? From what we seem to know it did not include any partnership numbers like the 30% given to Oilsearch. Unless you know exactly what the Exxon deal was, you are speculating that it was a bad deal.
11-03-2014, 08:51 AM
Mike just wants everyone to forget about the results from hundreds of millions of dollars invested in aerial and seismic surveys. It's a science thing.
We shouldn't forget all the investors who believe cavemen rode on dinosaurs 8,000 years ago. Pretty standard view among many. Why should those people believe in anything other than the reality of what today's market is saying? Mike still hasn't told us where Hession wasted tens of millions in a week. If he just said, 'yeah, I make things up from time to time' maybe the "thought police" wouldn't be hunting him down. LOL. 
11-03-2014, 09:19 AM
Rubbish. Throwing around terms like "political coercion" and pretending to know exactly what the terms of any Exxon deal were is garbage. Was Exxon wiling to pay full upside to the extent Total has committed? "Cheap price" was at market price even according to some of the biggest naysayers.
Complete rubbish Mike. 
11-03-2014, 11:40 PM
Does it seem strange to anyone that mike s ioc sounds a lot like mspieks?
Drivel Maven with Personality
11-07-2014, 12:16 PM
'Stavros' pid='51538' datel Wrote:Does it seem strange to anyone that mike s ioc sounds a lot like mspieks? Sorts and skews have simililarities, but this is beyond mspieks cog scematics. Mspieks conversation is far more completive and self research. He really did make many inquires, argued on fundamental points, quarried IOC IR by phone and in person, appeared in person in the "Lions Den" and has a sense of humility between the drama. MS does not play with Tonka toys.
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