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[Palm]

If OSH sells for $12, that's a 25% premium. At $14 it's a 55% premium. Very normal range for a premium from where it is today. If the $12-14 range worked last year when pps was at $8.50, it certainly works in the current $9 range.

We don't know if the $12-14 range would have actually worked last year when pps was at $8.50.

The other important consideration happens to be that Train 1 is now working supposedly early, and therefore the project is properly de risked. Train 2 is also coming on line this year some time. OSH has confirmed it has the potential now to be in participation prospect for another 2 or 3 new trains of LNG. The Taza prospect becoming more advanced with earlier oil production possible. And lastly OSH has 2 large shareholders that in all probability do not want to sell their shares (and one pissy little shareholder called sydbod, that also does not want to sell his shares) at such a low price.

I also don't believe that Woodside would pay a premium price of $14 for OSH. Profit margin at that price is not enough for a company like Woodside.

Here is a link to the 20 largest shareholders.  Which 2 are the ones you say are "in all probability" not likely to want to sell, and what are you basing that on?

We don't know for sure that the sun will come up tomorrow, but the estimates on the buyouts last year were based on what was known then and what was likely based on cash flows once production started.  Also, what are you basing the comment that $14 would be too high for Woodside because the "profit margin" wouldn't be high enough?  Assuming PNG LNg eventually gets built out for 5 trains and Total/IOC/OSH build a new plant, how can you say buying them at $14 wouldn't be worth it for Woodside?

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[jft310]

[quote='Palm' pid='43675' dateline='1400759600'] If OSH sells for $12, that's a 25% premium. At $14 it's a 55% premium. Very normal range for a premium from where it is today. If the $12-14 range worked last year when pps was at $8.50, it certainly works in the current $9 range.

We don't know if the $12-14 range would have actually worked last year when pps was at $8.50.

The other important consideration happens to be that Train 1 is now working supposedly early, and therefore the project is properly de risked. Train 2 is also coming on line this year some time. OSH has confirmed it has the potential now to be in participation prospect for another 2 or 3 new trains of LNG. The Taza prospect becoming more advanced with earlier oil production possible. And lastly OSH has 2 large shareholders that in all probability do not want to sell their shares (and one pissy little shareholder called sydbod, that also does not want to sell his shares) at such a low price.

I also don't believe that Woodside would pay a premium price of $14 for OSH. Profit margin at that price is not enough for a company like Woodside.

acquisitions are made at multiples of cash flow . SYD what will OSH cash flow per share be when the second LNG train is fully functional . . ? A multiple of 5-6 times cash flow would get the job done. A multiple of 10 times cash flow would be to high. So please share your math that reflects  what cash flow numbers will be ?. Hopefully you know that number.

[sageo]

If OSH sells for $12, that's a 25% premium. At $14 it's a 55% premium. Very normal range for a premium from where it is today. If the $12-14 range worked last year when pps was at $8.50, it certainly works in the current $9 range.

We don't know if the $12-14 range would have actually worked last year when pps was at $8.50.

The other important consideration happens to be that Train 1 is now working supposedly early, and therefore the project is properly de risked. Train 2 is also coming on line this year some time. OSH has confirmed it has the potential now to be in participation prospect for another 2 or 3 new trains of LNG. The Taza prospect becoming more advanced with earlier oil production possible. And lastly OSH has 2 large shareholders that in all probability do not want to sell their shares (and one pissy little shareholder called sydbod, that also does not want to sell his shares) at such a low price.

I also don't believe that Woodside would pay a premium price of $14 for OSH. Profit margin at that price is not enough for a company like Woodside.

Syd-Well,you can now make that"two pissy little shareholders" ! I bought a little bit several months ago. Thanks all you guys for your thinking about OSH......very interesting.

[sydbod]

I was getting worried that I may be wrong about Woodside buying out OSH, so I went for the definitive test just a few minutes ago.
I looked at the entrails of my neighbours rooster that met a grisly death a few hours ago (it always bugged me by crowing early in the morning, just as I normally go to bed). Hmmmm, I wonder who killed it. Anyway, by the reading of the entrails, it is confirmed ...... Woodside will not buy out OSH.

Seriously though .... Woodside is a very greedy company and does not play under the financial rules we normally think is reasonable. (yes, I also have shares in Woodside)
It is mainly my long term held perception of how Woodside works and what it wants that makes me fairly confident OSH and IOC happen to be safe.
An article worth reading also:
http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CDEQqQIwAQ&url=http%3A%2F%2Fwww.theaustralian.com.au%2Fnews%2Fleviathan-an-option-but-not-oil-search-woodside%2Fstory-e6frg6n6-1226927464814&ei=Dxh-U-bDC8Tr8AXXo4BQ&usg=AFQjCNFmFsM56T0YjBjAQpVi-84ux6GCyA&bvm=bv.67229260,d.dGc

sageo - welcome soul mate

[Palm]

Your entrail readings said OSH would not be interested in using IOC gas for PNG LNG expansion and Woodside was solid on its plans for Israel. If we know anything in this industry and others we know that CEOs say one thing but act differently. Last year Total said their appetite for new resources was very dry and they were looking at divesting to raise cash. Most other CEOs of these SMs have been saying the same, but yet they continue to invest as the right opportunity presents itself.

Woodside's CEO says they have no interest in OSH as things are fully valued; yet they have met and talked more than once. As every day passes so do situations and valuations. Having had discussions with OSH recently "says" as much or more than a response to pesky reporters. He may have shut down the questions for now but that doesn't mean the interest has suddenly gone away. After all he says that very thing about Israel; not today, but that doesn't mean that's forever.

[sydbod]

Palm, don't take all that one reads as being presented in the correct context.
I have no doubts that Woodside senior management and OSH senior management have on many occasions met at various functions and had interesting conversations. This does not mean that Woodside are interested in taking over OSH.
I met some of the senior management of Woodside on one particular occasion and we had a few words. This also does not mean that Woodside is interested in taking over my gas interests (my barbecue gas bottle) by any stretch of the imagination. There is way too much unfounded speculation and non contextual information written in the media just to fill pages and gain eyes.

http://www.woodside.com.au/Investors-Med...ack%29.pdf
This is the slide pack from the last investor briefing.
Slide 36 and 37 show the global areas Woodside are currently interested in and working in. The future of Woodside does not just rest in PNG. IOC and OSH are not all that important to them if they can not make a killing out of the transaction.

Now to go back to my baked rooster dinner.

[Palm]

Syd, don't take all that one reads as being presented in an Investor Presentation as being presented in the correct context or take that presented information in the wrong context. Those noted slides fell under their Exploration presentation.

Eating a rooster at 3 AM might not sit well

[geologydude]

Syd, don't take all that one reads as being presented in an Investor Presentation as being presented in the correct context or take that presented information in the wrong context. Those noted slides fell under their Exploration presentation. Eating a rooster at 3 AM might not sit well

Perhaps crow might be more appropriate.

[Getitrt2]

Woodside top management are a bunch of dorks. How can they say that they see sovereign risk when it comes to PNG but offshore Israel was not too risky for them to invest? They walked away from Levithan because the plan is now to pipe gas onshore instead of spend 10's of billion$ more for an overpriced LNG plant? So now they'll develop Browse with a gigunda FLNG that's based on unproven Shell technology? This is the same bunch of Shell guys who lost their shirts on the Pearl Gas-to-Liquids plant in Qatar using unproven technology. Michael Hession was smart to leave Woodside and join IOC where he can make decisions and implement them. At Woodside, all he could do was make plans and then watch them go down in flames. NEXT ISSUE ... Outcome of Paris discussions among IOC/TOT/OSH. Words continue to spew from all players that earliest possible monetization of PRL 15 gas is the desired outcome. That can only happen if the gas goes to PNG LNG Trains #3 and #4. BAM! Mr Kavo will wait for Triceratops gas

Stavros, would you please direct me to those words that have continued recently "to spew from ALL PLAYERS that earliest possible monetization of PRL 15 gas is the desired outcome"?  Apparently, I have somehow missed them, and would really like to see them.

[Getitrt2]

[quote='Stavros' pid='43667' dateline='1400731363'] Woodside top management are a bunch of dorks. How can they say that they see sovereign risk when it comes to PNG but offshore Israel was not too risky for them to invest? They walked away from Levithan because the plan is now to pipe gas onshore instead of spend 10's of billion$ more for an overpriced LNG plant? So now they'll develop Browse with a gigunda FLNG that's based on unproven Shell technology? This is the same bunch of Shell guys who lost their shirts on the Pearl Gas-to-Liquids plant in Qatar using unproven technology. Michael Hession was smart to leave Woodside and join IOC where he can make decisions and implement them. At Woodside, all he could do was make plans and then watch them go down in flames. NEXT ISSUE ... Outcome of Paris discussions among IOC/TOT/OSH. Words continue to spew from all players that earliest possible monetization of PRL 15 gas is the desired outcome. That can only happen if the gas goes to PNG LNG Trains #3 and #4. BAM! Mr Kavo will wait for Triceratops gas

Stavros,

Why do you think the PNG LNG represents the fastest monetization of PRL 15?

While I would say that PNG LNG requires the least capital, I am having a hard time working out in my head how the PNG LNG is the quickest.  If you lay out the critical path schedule, the long lead items are the LNG equipment and the piping lead times and installation,  I believe all of the ancillary work in the CPS can be completed while this stuff in on order.  Therefore, whether a seperate plant is built or additional trains added tot the PNG LNG, the overall schedule will be about the same.  What am I missing here?

Good luck longs.

Some items that make an Exxon add on attractive would be lower capital costs, the pipe for the 3 rd train is in place to Port Moresby, Interoil needs to tie into that T at Kerema, shared infrastructure between all the trains exists at Port Moresby , quicker FID at a lower cost . Stavros would be best on this board to detail the savings in time and money . What ya say?

People are talking here about gas going to PNG LNG for Trains 3 and 4.  Maybe I'm "ignoring" something again, or just confused (?!), but that brings a couple of things/questions to mind.  First, if that is what Exxon wants, why were they trying to buy just one train's worth of gas?  Secondly, how does that save undersea pipeline infrastructure cost if they use the existing pipeline for Train 3 but have to build a second for Train 4, leaving them still with a pipeline for each two trains and empty capacity for two trains instead of one?  Those savings would have to wait for trains 5 and 6, if they ever happened.  One thought:  they would not need an undersea pipeline for Wahoo.  We continue to wait for the drill bits.  Stavros, would FID really necessarily be significantly quicker for PRL 15?