Interoil vs other energy stocks

[Putncalls]

They should call Kirk's master DR Delay Hessian. It sounds like he is talking up A7. His pick, Kirk screwed up! A6 was another delay. it's purpose is poorly defined and it was delayed by A4 which was delayed by Raptor and Kirk. The certification would be in IOC's bank now and the doubt in execution wouldn't be hanging over the stock like a Klingon bathroom if Kirk hadn't screwed up. He's probably never even touched a drill bit!. Wells Fargo might still believe and Chandler could have covered his margin if that certification payment hadn't been delayed by 8 months to a year or more. Flame on getit.

[Getitrt2]

They should call Kirk's master DR Delay Hessian. It sounds like he is talking up A7. His pick, Kirk screwed up! A6 was another delay. it's purpose is poorly defined and it was delayed by A4 which was delayed by Raptor and Kirk. The certification would be in IOC's bank now and the doubt in execution wouldn't be hanging over the stock like a Klingon bathroom if Kirk hadn't screwed up. He's probably never even touched a drill bit!. Wells Fargo might still believe and Chandler could have covered his margin if that certification payment hadn't been delayed by 8 months to a year or more. Flame on getit.

What's your hangup on Kirk?  I don't think you've ever given any specifics for it.  I'm sure you think you could have done everything better and faster, or maybe you're just a basher.  Either way, you're full of it!  Flame out.

[Putncalls]

Real men don't shoot the messenger.

[Getitrt2]

Real men don't shoot messenger.

Then why are you shooting Kirk, Mr. "real man"?

[Palm]

It's Ok Puts; I know what you're talking about. From a post I did some time back. Having a sense of humor helps.

[Stavros]

It's my understanding (from piecing together small snippets of information from many sources since then) that:

1. Civelli and Hession were negotiating the sale of Pacific LNG to IOC for a significant length of time
2. Civelli told Hession what he wanted $900 million CA$H plus an uplift if there was more gas than the GCA Resource Estimate of 7.1 tcf
3. Hession refused to accept that offer
4. Only then did Civelli leave the negotiating room to peddle the deal to others

If I'm correct, then I wouldn't say that "Hession was outflanked by OSH" in the acquisition of Pacific LNG. Instead I would say that Hession was greedy and we as IOC Shareholders paid the price for his avarice.

This happened, of course, after the Transformational Deal and IOC's PPS had already cratered.

[Palm]

Sort of agree, but one thing to remember. A normal JVOA (which IOC has said they use) states that a JVOA partner has the right to match any offer that another partner gets for his interest. Not 100% on this but the several I have read have that or very similar provision.

Assuming that, Hession would have been given that offer to match. Not sure if the potential acquiring party must be disclosed or not, but my guess is Hession would have known of the offer and refused to match. He may have refused doubting that such a deal would actually close, but we likely will never know the final steps that lead up to OSH snagging the interests. Having been offered the match, IOC would not have been able to enact preemptive rights (which we know they didn't attempt. Was this why?).

Assuming this, Hession would have been outflanked. Anyone have any legal insight on this (and please, no comments to the point with "I doubt this happened").

[Stavros]

I hear you Palm and you could be correct that Hession may have refused to match the offer.
But, if the below was the actual chain of events:

1. Civelli said to Hession "I want $ 900 Million plus extra if there is more than 7.1 tcf"

2. Hession said to Civelli "Sorry Carlo, but that is far more than IOC is willing to pay to acquire Pacific LNG. Our offer of $600 million with no uplift stands"

3. Civelli said to Hession: "OK Michael, I'll get back to you with our decision in due course"

4. Civelli then went to OSH and said to Botten: "Peter, how are you? Long time no see. Would you consider these Terms and Conditions to acquire the Pacific LNG Companies that IOC is required to buy from me? I'd like to get $900 million plus additional if E/A has more than 7.1 tcf? I offered this exact deal to IOC but it was turned down."

5. Botten (drooling from the left side of his mouth) said: "Well, Carlo, that's a very steep price to pay since we think there's only 5+ tcf in E/A. But what the heck, yes let's do it."


= = = > Would IOC then still have the right to match an offer that they had already refused?

[Palm]

IMO yes. Once there is an offer/final offer, the JOA partner(s) get right to match/beat.

[jft310]

Lets not ignore the fact that Interoil did not have $900 million to match what Civelli requested . There would have been 2 ways for Interoil to get that amount of money , borrow it at a steep rate of interest or issue new shares . As in how the price was already down to cripple the company with that much debt and/or add 50 percent more shares were not terms Hession could accept . Total could have been a buyer but chose to not do so . At $600 million for PACLNG a combination of debt and share issuance would be financially ok thus the SPA language . Or the price was to steep for Interoil to swallow .