More twists coming for PNG’s emerging LNG industry?

[SamAdams]

Spot on Palm  Market is a discounting mechanism and right now we're not getting much credit for arbitration, exploration or certification.  Arbitration hopefully resolved soon and with this much $ on the line cooler heads will prevail.  Exploraton is important as it adds credibility and optionality to the long term story.  As these issues resolve investors can then begin to discount how big E/A is.  Low case looks priced in here so we should start to move higher as investors start to evaluate the upside.

[ArtM72]

That is a concern given that would make IOC bankrupt. Vultures love bankruptcies.

Yeah, they might have to give Total the money back but they get the same amount of money from OSH as required by the fundamental deal matching requirement,  Thus, no bankruptcy, only attorneys' fees.

[mikesioc]

This is very simple. IOC is the mark. Get some drilling results and line up the buyers. End of story.

[Palm]

Gee thanks mike. But it ain't happening like that.

[SamAdams]

IOC will not be sold or bought at this point, IMO. It may may get carved like a Thanksgiving tier key but there is no urgency for someone to swoop in here. That window has passed, if it ever existed.

[Palm]

Agree Sam

[Movieguy]

Please explain, either Sam or Palm (or anybody else), why IOC would not be bought out around this time. Prior to this Raptor discovery, and not taking into account any future discoveries, most analysts value the company around $100/share, give or take $20. At the current $56/share, would it be so unlikely a powerful entity could acquire the whole company for around say $120/share that they would not even try? Also, any shares acquired along the way of the attempt would be done so at lower or much lower prices, so even if the attempt failed (by the share price exceeding their offer price), the prospective failed buyer would likely make $ hundreds of millions for its trouble. So still not even worth the attempt?

If the attempt were to succeed, the buyer has acquired solid assets that will likely appreciate by 20%+/year over the next few years, and if some discoveries are found (which seems to become more likely as Raptor, Bobcat and Wahoo report their news), the buyer has hit the jackpot. This does not even attempt to assess the value of adding reserves to their balance sheets and having the control of where and how these reserves are used.

[jft310]

If you think the shares could appreciate at 20 plus percent a year don't ya think Interoil management and top shareholders know that ????thus no dale .

[Gator]

If you think the shares could appreciate at 20 plus percent a year don't ya think Interoil management and top shareholders know that ????thus no dale .

Obviously not the top two individuals in the InterOil management team, or they would have purchased shares by now.

[Palm]

Please explain, either Sam or Palm (or anybody else), why IOC would not be bought out around this time. Prior to this Raptor discovery, and not taking into account any future discoveries, most analysts value the company around $100/share, give or take $20. At the current $56/share, would it be so unlikely a powerful entity could acquire the whole company for around say $120/share that they would not even try? Also, any shares acquired along the way of the attempt would be done so at lower or much lower prices, so even if the attempt failed (by the share price exceeding their offer price), the prospective failed buyer would likely make $ hundreds of millions for its trouble. So still not even worth the attempt? If the attempt were to succeed, the buyer has acquired solid assets that will likely appreciate by 20%+/year over the next few years, and if some discoveries are found (which seems to become more likely as Raptor, Bobcat and Wahoo report their news), the buyer has hit the jackpot. This does not even attempt to assess the value of adding reserves to their balance sheets and having the control of where and how these reserves are used.

For all of the reasons stated above.  Even though IOC pps is down it's still very risky as an acquisition and these companies are not buying a lot of risk right now.  There have been many failures in exploration and these companies have told shareholders that they are risk averse right now.  With the IOC/OSH arbitration hanging over things there would be virtually no or very few who would be willing to take a flyer until that is resolved at least.  Look at OSH.  They were not considered much of a buyout candidate until early 2013 when it was becoming more certain that all isues would be resolved in PNG and production would actually happen.  And then a buyout offer NEVER came.