Cost to clawback interests from drilling partners

[sltibbs]

It has been mentioned that IOC would clawback interests from drilling partners after/during a selldown. This cost is very important to valuing IOC. Does anyone have those numbers?

Best,

Sam

[jft310]

Need prices Sam . They issue IOC shares not cash and let the IPI partners sell shares when they need the money. This time its estimated they make 4 times their initial investment

[sltibbs]

jft,

Help me understand the process. When you say "need prices" what do you mean?

So drilling partners convert to shares when they can't make cash calls, correct? Drilling partners can't be forced to conver though, can they?

Also, how is it estimated that "they make 4 times their initial investment"?

Thanks,

Sam

[Palm]

jft,

Help me understand the process. When you say "need prices" what do you mean?

So drilling partners convert to shares when they can't make cash calls, correct? Drilling partners can't be forced to conver though, can they?

Also, how is it estimated that "they make 4 times their initial investment"?

Thanks,

Sam

Sam,

PTI on the IPI.  Not sure we know the exact amount of the options that IPI investors have to convert should they decide to become a common shareholder at this point, but here is info from the June 30 financials:

"13. Potential dilutive instruments

Conversion options, convertible notes, stock options and restricted stock units totaling 2,571,757 common shares at

prices ranging from $9.80 to $95.63 were outstanding as at June 30, 2012.

Potential dilutive instruments outstanding

Number of shares

June 30, 2012

Number of shares

June 30, 2011

Employee stock options 1,295,667 1,570,767

Employee Restricted Stock 203,585 157,714

IPI Indirect Participation interest - conversion options 340,480 340,480

2.75% Convertible notes 732,025 732,025

Others - 5,000

Total stock options/shares outstanding 2,571,757 2,805,986"

Then there is this from the June 30 MD&A:

"We are required under our $125.0 million IPI Agreement of 2005 to drill eight exploration wells. We have drilled

four wells to date. As at June 30, 2012, we are committed under the terms of our exploration licenses or PPL’s

to spend a further $49.9 million through 2014. As at June 30, 2012, management estimates that satisfying these

license commitments with the expenditure of $49.9 million would also satisfy our commitments to the IPI

investors in relation to drilling the final four wells and satisfy the commitments in relation to the IPI Agreement."

So there are 340,480 shares that are available to these IPI investors.  Not sure if anyone has info as to what the conversion to shares is based on which represents the 340,480 shares.

[sltibbs]

Palm.

Thanks for the info, but I am hoping to learn more about what jft was stating/implying. His statements go beyond the regularly reported financials, hence my request for additional, confirming information. Maybe I should just email WA, but was hoping not to bother them,

Best,

Sam

[jft310]

Palm.

Thanks for the info, but I am hoping to learn more about what jft was stating/implying. His statements go beyond the regularly reported financials, hence my request for additional, confirming information. Maybe I should just email WA, but was hoping not to bother them,

Best,

Sam

Sam

Email Spartina he knows. Not for me to say more. Especially here.

[kerekesc]

Palm.

Thanks for the info, but I am hoping to learn more about what jft was stating/implying. His statements go beyond the regularly reported financials, hence my request for additional, confirming information. Maybe I should just email WA, but was hoping not to bother them,

Best,

Sam

Sam

Email Spartina he knows. Not for me to say more. Especially here.

I for one, find this an arrogant and condescending remark/answer in regard  to the other members of this board!

[jft310]

Kerecec-There is a contract between IOC and IPI investors . Spartina is an IPI partner. It would be up to him whether he wants to divulge the details of their contract. This board is quite public.

[sltibbs]

Kerekesc & Others interested,

I just sent an email to Wayne Andrews and will post what I learn.

Best,
Sam