Did IOC mgmt. not understand a deal would take so long?

[sageo]

Movie- This won't answer your question directly (sorry),but here are some thoughts. MLK..."I have a dream" . Me "I had a dream" ! First,get rid of Duma. Next, lock all the IOC

lawyers,all the XOM lawyers and PNG lawyers in a large conference room for 24/7.  NO wives,NO girlfriends, NO booze and only bread and water. Presto.....signed contracts.Now that's a ream worth having ....no?

[Petrovale]

Agree with TA also.
No trading advice asked or wanted.

[Libtardius Maximus]

Not to beat the dead Phil horse but look at the timing of these two events: April 23, 2013 - Phil retires May 24, 2013 - Exxon exclusive This timing IMO clearly indicates that real SD talks were going nowhere until Phil was forced to leave. So essentially these complex talks really only got serious in May of this year. I have heard from my best sources that IOC was spinning its wheels prior to the IOC/XOM agreement. In that light, it has not taken that long. Yet...

I'll add to this excellent observation.

July 11, 2013 - Dr. Michael Hession named CEO

August 13, 2013 - Conference call

See the similarities?

[sydbod]

Let me take off my IOC shareholder cap and put on my OSH and Santos caps, and provide perspective from the other side for a change.
1) PNG LNG is the only game in town at the moment.
2) IOC is just small fry with virtually no cash reserves and NO banks will lend it billions to construct a LNG plant by themselves.(no proven track record)
3) PNG LNG wants at least another 2 trains (3 and 4)
4) The drilling for PNG LNG resources is behind by around 6 months so the final determination of available resources can only be done towards end of 2014.
5) No plant planning for trains 3 and 4 will be started before end of 2014 until all resources are determined.
6) IOC requires money as soon as possible so that it can continue with its exploration and own LNG plant. (therefore IOC is stuck with this initial deal for money from XOM)

What should XOM do ......... simple...
1) try to screw IOC for as low a price for their gas as possible and use the delay tactic for as long as possible.
2) Delay the deal as long as possible so that PNG LNG money goes to IOC as late as possible as the PNG LNG partners don't have much free money left to play with.

Put on OSH/Santos and IOC caps now .......
It is a cat and mouse game being played until it can not be drawn out any longer.
Yes we will make good money on our IOC shares but not a huge amount early on as many people may think on this forum.
IOC's real future will be in about 6 years time when they start getting LNG from their own plant with partners other than PNG LNG.

PLEASE don't all shoot me at once as the above is only my speculation based from my view as a share holder in OSH, Santos, and IOC.

[cybersssss]

syd- Some things I agree with and some not. The reason for the "bidding process" was to not allow the companies to delay negotiations as you say. The sooner they get going, the sooner the LNG can come to market. These companies (XOM) have specific projections of supply and demand and need the revenue to grow their dividends. So XOM need IOC as well not just the other way around.

The market thinks years ahead, not at the present moment. That is why IOC is valued at 4 billion now. After a deal IOC will be valued based on the deal and the projected discounted cash flows, aside from future prospects. Future prospects will grow the company more. I personally believe that we are a coiled spring.

[Palm]

"put on my OSH and Santos caps, and provide perspective from the other side for a change"

Hardly a "change". This has been your view in 95% of your posts IMHO.

[sydbod]

cybersssss, as I said, it is just speculation. I could be way off the mark in some or all of it. I hope you are correct, but I have my niggling doubts.

Palm, " This has been your view in 95% of your posts IMHO", you are totally correct here. I still do not have full confidence is much of the speculation that has been presented so far. That does not mean that I am correct though.

[jft310]

Syd well you gonna be surprised soon . That's a good thing if an IOC shareholders , everyone is clamoring for an update on the Exxon deal . I bet we significant deal details on tuesday.

[ArtM72]

Let me take off my IOC shareholder cap and put on my OSH and Santos caps, and provide perspective from the other side for a change. 1) PNG LNG is the only game in town at the moment. 2) IOC is just small fry with virtually no cash reserves and NO banks will lend it billions to construct a LNG plant by themselves.(no proven track record) 3) PNG LNG wants at least another 2 trains (3 and 4) 4) The drilling for PNG LNG resources is behind by around 6 months so the final determination of available resources can only be done towards end of 2014. 5) No plant planning for trains 3 and 4 will be started before end of 2014 until all resources are determined. 6) IOC requires money as soon as possible so that it can continue with its exploration and own LNG plant. (therefore IOC is stuck with this initial deal for money from XOM) What should XOM do ......... simple... 1) try to screw IOC for as low a price for their gas as possible and use the delay tactic for as long as possible. 2) Delay the deal as long as possible so that PNG LNG money goes to IOC as late as possible as the PNG LNG partners don't have much free money left to play with. Put on OSH/Santos and IOC caps now ....... It is a cat and mouse game being played until it can not be drawn out any longer. Yes we will make good money on our IOC shares but not a huge amount early on as many people may think on this forum. IOC's real future will be in about 6 years time when they start getting LNG from their own plant with partners other than PNG LNG. PLEASE don't all shoot me at once as the above is only my speculation based from my view as a share holder in OSH, Santos, and IOC.

Legitimate hypothesis.  I like the thinking even though the thoughts are disturbing.

There are others who would like to see IOC's gas kept off the market as long as possible.  The Aussies for example.  Then you never know what Morgan Stanley is up to.  They have acted to control the American aluminum market with their warehousing venture in Detroit.  Who's to say they aren't effectively "warehousing" IOC gas through contract negotiation delays to protect other investments around the world?  We just don't know.

Perhaps we'll hear a deadline announced by IOC in a couple of weeks.  XOM signs or E/A goes to the next bidder.  Sure, we lose another three months but given IOC history that time frame is beginning to appear like the blink of an eye.

[ebster123]

Fact the time factor is not in IOC's control.They are cutting a deal with Exxon who works at their pace,Exxon entered the party late. This is not a short term option play. Would you prefer a deal done quickly with mistakes...?...

JFT, Movieguy's question was why, during the past two years, little or nothing -- deal wise -- has ever been in IOC's control, not whether any of us hold options or have been beaten by our wives... 

[/quote]

Phil's gone and we have a new CEO who will speak Tuesday. Whining about what Phil did or did not do achieves nada .

The only people concerned are those with options. Others know IOC has the assets and maybe inspite of Phil's bumbling will get it done. Exxon is quite anxious to get this done. They have a process that made them Exxon and investors need to wait to get it right.

[/quote]

Your comment "The only people concerned are those with options" could not be more false.  Yes, I own some leaps but I also own stock.  I have concerns of what if O'Neill gets taken out by a RDS or other group hit or has a motor vehicle/airplane accident, has an MI, whatever.  He is the link for IOC.  If he is gone so possibly are our chances.