Goldman Adds IOC two Conviction List

[Movieguy]

[quote='CAC' pid='62788' dateline='1442328607']

Geez the SHU board voted 12 T's . How come Goldman didn't model that number ?didn't Calio say at least 9 T's for the Sept 21st call??

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Although it is conceivable that there might actually be 12T's, I think it's naive to think that IOC will end up getting paid based on that figure.  Don't we all anticipate a higher estimate and a lower estimate by the two entities?  Those numbers will be averaged.  If either party has any ability to influence/manipulate an estimate at all, I would presume it would be TOT. 

If there's actually 10T's in the ground and IOC's estimator says so, I would not be surprised to see TOT's selection come in considerably lower.  There are hundreds of millions of dollars at stake.   

While it's entirely conceivable that the two reports will differ, these are organizations with reputations at stake and the reports will be available to many, I don't think its likely they will be doctored in any way.

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"Doctored" might be a little strong.  But this is not an exact science and there is a range wherein reasonable minds could plausibly (and defensibly) differ.  TOT may hire one of these firms another 20 times over the next decade...and I presume the firms like getting hired.  So, seeing one come in on the lowest point within the "reasonable range" does not seem far-fetched to me.  

If the two estimates come in within 10% of each other I will gladly stand corrected.   

Within 10% would be great.  Within 20% would be disappointing, but acceptable.  After that I think we have a real problem.

[admin]

[""Doctored" might be a little strong.  But this is not an exact science and there is a range wherein reasonable minds could plausibly (and defensibly) differ.  TOT may hire one of these firms another 20 times over the next decade...and I presume the firms like getting hired.  So, seeing one come in on the lowest point within the "reasonable range" does not seem far-fetched to me.

If the two estimates come in within 10% of each other I will gladly stand corrected."]

It is higly improbable they'll put something out that isn't defensible. Humans are social beings, they do actually care what other people think of them, especially fellow professionals. Unless selling yourself to the highest bidder or losing all professional ethics becomes part of the culture, and everybody's doing it (like what happened in some financial istitutions), this isn't going to be a problem.

There could very well be a conservative estimate, but CG is supposed to be conservative already. But it will be defensible from a professional point of view, IMHO.

[Movieguy]

[""Doctored" might be a little strong.  But this is not an exact science and there is a range wherein reasonable minds could plausibly (and defensibly) differ.  TOT may hire one of these firms another 20 times over the next decade...and I presume the firms like getting hired.  So, seeing one come in on the lowest point within the "reasonable range" does not seem far-fetched to me.

If the two estimates come in within 10% of each other I will gladly stand corrected."]

It is higly improbable they'll put something out that isn't defensible. Humans are social beings, they do actually care what other people think of them, especially fellow professionals. Unless selling yourself to the highest bidder or losing all professional ethics becomes part of the culture, and everybody's doing it (like what happened in some financial istitutions), this isn't going to be a problem.

There could very well be a conservative estimate, but CG is supposed to be conservative already. But it will be defensible from a professional point of view, IMHO.

Admin, the key question is how wide a margin is "defensible?"  Please answer that as specifically as you can.

[admin]

[""Doctored" might be a little strong.  But this is not an exact science and there is a range wherein reasonable minds could plausibly (and defensibly) differ.  TOT may hire one of these firms another 20 times over the next decade...and I presume the firms like getting hired.  So, seeing one come in on the lowest point within the "reasonable range" does not seem far-fetched to me.

If the two estimates come in within 10% of each other I will gladly stand corrected."]

It is higly improbable they'll put something out that isn't defensible. Humans are social beings, they do actually care what other people think of them, especially fellow professionals. Unless selling yourself to the highest bidder or losing all professional ethics becomes part of the culture, and everybody's doing it (like what happened in some financial istitutions), this isn't going to be a problem.

There could very well be a conservative estimate, but CG is supposed to be conservative already. But it will be defensible from a professional point of view, IMHO.

Admin, the key question is how wide a margin is "defensible?"  Please answer that as specifically as you can.

Without losing face.

[Bevo]

IOC just showed up on CNBC as a Goldman conviction buy, cant hurt!

[Gator]

Goldman Sachs upgraded InterOil (NYSE: IOC) from Buy to Conviction Buy with a price target of $45, suggesting upside of 33%. Analyst Mark Wiseman thinks recent M&A highlights unrecognized value in PNG. He also pointed out strong flow test results and share price weakness.

"We add InterOil (IOC) to our Conviction List with a 12-mt PT of U$45.00/sh, (33% potential upside) given strong flow test results (Antelope-5 well), share price weakness and the recent takeover approach from Woodside for Oil Search (highlighting industry M&A interest in PNG gas assets)," said Wiseman.

"We expect further well data, resource certification and a major payment from Total SA (GSe US$715mn) in the next 6-12mths. While the market has concerns with LNG & oil market weakness, IOC’s liquidity and uncertainty around resource size, we believe this is overplayed and see 95-105% risked upside in bull scenarios (9Tcf) vs. 15-25% risked downside in bear scenarios (6Tcf)," continued Wiseman.

Wiseman said the key task for InterOil is commercializing its 36.5% stake in the Elk- Antelope gas field in PNG, and the analyst pointed out several catalysts including its ongoing drilling program at Antelope (Sept-Dec 2015), resource certification (1H 2016), and certification payments from Total SA (2Q 2016).

[jft310]

Well GCA was P-2 at 7 T's before the latest wells . One of their comments was to be at GLJ estimates required 2 more wells to successfully be drilled with assets. Oil Search Botten this week stated drilling results were at the high end of expectations . GLJ is still Interoil's official reservoir engineer with results expected mid Feb for year end requirements . What that means to GCA and Nethland Sewell the engineers hired by Oil Search can be debated. Interoil 2 engineering firms have not been named yet.