cash & receivables

[Putncalls]

Schizo? The post A7 RJ report states that IOC has plenty of cash. It's posted right here on this board. Is anyone trying to Assume that A7 won't happen?

[will2bgreat]

Schizo? The post A7 RJ report states that IOC has plenty of cash. It's posted right here on this board. Is anyone trying to Assume that A7 won't happen?

I'm hoping and praying that A7 won't happen Puts.  I think this board is not considering all of the risks associated with drilling A7; cost risks, timing risks. drilling risks; and discovery risks leading to additional drilling.  When discussing additional drilling the word I fear the most is dilution.

Good luck longs.

[kommonsents]

I agree, Will.

The best approach at this time, IMHO, (forget about how we got here) is to push for Certification and subsequent payment ASAP followed by the necessary steps to build the LNG plant with 2 or 3 trains, also ASAP. IOC should also be selling down other assets outside A/E and generating cash to ensure ability to build the LNG plant and continue exploration.

Let's not discount the inherent risks in delays and greed at this time.

Sometimes, ya gotta know when to hold em and when to fold em, and when to walk away (from further risks). Just MHO folks....

[Getitrt2]

The full $300 million loan was available at the end of quarter 3 , part of the $473 million . When tapped the loan is a balance sheet item not immediately repayable like all loans . In some ways the lower cash levels encourage Interoil to cut an agreement for some non PRL15 assets . Hession has stated terms at least as good as the Total deal . End of 16 things are tight . At that time we will need extended loan , and/or larger loan size , or sell down with cash upfront or Total payment receipt . Today this quarter we are fine .

We should be able to get a loan on good terms from a bank or directly from Total, using Total's pmt as collateral.  Possibly we will agree ( and get immediately paid) on Total's pmt - there is no need to go through the appraisal process, it is there as a backup in case we don't agree.

I'll tone down my reaction, but that kind of internal estimated resource "agreement" will NOT happen.  Let's just say that is not the way big money, big stakes business works, for multiple reasons, and the independent certification will be used for more than just the Total payment.

[Getitrt2]

I agree, Will. The best approach at this time, IMHO, (forget about how we got here) is to push for Certification and subsequent payment ASAP followed by the necessary steps to build the LNG plant with 2 or 3 trains, also ASAP. IOC should also be selling down other assets outside A/E and generating cash to ensure ability to build the LNG plant and continue exploration. Let's not discount the inherent risks in delays and greed at this time. Sometimes, ya gotta know when to hold em and when to fold em, and when to walk away (from further risks). Just MHO folks....

Relative to your "2 or 3 trains" comment, an Ant 7 could be important for a "3-train" (or large 2-train) decision.

[Getitrt2]

Schizo? The post A7 RJ report states that IOC has plenty of cash. It's posted right here on this board. Is anyone trying to Assume that A7 won't happen?

I'm hoping and praying that A7 won't happen Puts.  I think this board is not considering all of the risks associated with drilling A7; cost risks, timing risks. drilling risks; and discovery risks leading to additional drilling.  When discussing additional drilling the word I fear the most is dilution.

Good luck longs.

There are always costs and risks associated with drilling.  I wonder why any company ever does any?  Oh, it must have something to do with the fact that it eventually pays off normally, and the huge opportunities associated with it!

If the JV decides to drill an Ant 7, I feel sure it will be for good reasons and that the costs will be shared proportionately iaw the JV agreement.  Why do you "fear" supposed "dilution"?  IOC may very well already have sufficient liquidity for it, and there is plenty of balance sheet room for debt financing if needed, without any equity dilution.

[Getitrt2]

Raymond James: "Cash and receivables total $173 million, plus the undrawn $300 million credit facility, leaving the company well positioned to get to resource certification. The 2016 capital budget of $175-195 million is down y/y, and corporate costs are also being reduced significantly."

Morgan Stanley: "CAPEX REDUCED IN 2016; WE SEE LOW LIQUIDITY RISK." ... We estimate operating cash burn in 2016 at $190-220MM. IOC also has a (approx.) $70MM convertible note coming due this month. Total cash outflow should be comfortably covered by current liquidity of $126MM cash ($8MM restricted) and an undrawn credit facility of $300MM. Balance sheet could be further fortified with proceeds from potential farmdowns of IOC's three recent discoveries: Triceratops (1Tcfe P50), Bobcat (1.5Tcfe P50), and Raptor (5.5Tcfe P50)."

[jft310]

I wonder where the above TCFE numbers of a total of 8 TCFE at TBR are coming from ? Most likely internal numbers . Will GLJ agree to these numbers in Feb ????Interoil is using a P-50 number or 50 percent probability . If bidders for these properties agree with these size estimates we could see a deal like E/A put together . A down payment , some carried well drilling and a final assessment with a payment like with Total . Would have to include an LNG ownership position for processing the gas like with Total . If the drilling under this new deal took 2-3 years like E/A has the cash receipts would be available before the Papua LNG opens and would bridge Interoil into cash flow from Papua LNG . Cuts down on the odds of a secondary and on the amount of a debt borrowing with another deal . Hession has been talking about another deal since the Friday after the AGM . No news yet though .