MS research note

[freddiekingman]

Oil Search Ltd.: Research Tactical Idea
Adam Martin – Morgan Stanley
April 4, 2016 10:30 AM GMT
We believe the share price will fall in absolute terms over the next 30 days.Due to concerns about funding for the Elk/Antelope resource payments. A secondary concern is the implied oil price, with the stock likely to come under pressure should oil prices head lower given the recent rally.We estimate that there is about a 60% to 70% (or "likely") probability for the scenario.Estimated probabilities are illustrative and assigned subjectively based on our assessment of the likelihood of the scenario

[jft310]

Oil Search needs money to pay Civelli as most of us thought . My friends think it's a big number . Maybe 40 percent more . ??Or $360 million more if 40 percent is right . Still unknown what their report will show ,
Hint if Oil Sesrch owes more than Total owes more than a payment at 7 T's . The resource is larger .

[Tree]

OSH faced with unfounded huge resource payment -or- some kind of sale.
Better rush an IOC/OSH merger through before OSH tanks!!

[Tusker]

Well ya know... OSH stated that Ant/Elk was a "raft reef" not the near shore dolomite lagoon atoll we are getting to know.

March 15th began OSH certification period (120) days. Yes Peter... the reservoir does extend to the South.

Tot el du

:-)

[freddiekingman]

Well ya know... OSH stated that Ant/Elk was a "raft reef" not the near shore dolomite lagoon atoll we are getting to know.

March 15th began OSH certification period (120) days. Yes Peter... the reservoir does extend to the South.

Tot el du

:-)

Tutelu.....au reservoir! Mon ami..hahahaha

[Putncalls]

I think that payment is "capped". A7 may give them a bigger reserve for their books but they have to pay to drill?

[jft310]

The Oil Seatch payment is far from capped . To raise enough money for the payment they most likely will sell some stock which is dilutive which is one of the reasons MS predicts a stock price drop ,

[Putncalls]

I think it's capped. 9Ts or 12Ts their payment is the same?

[jft310]

No cap , just 77 cents per mcf above 7 T's.
Civelli would never sign a capped deal .

[Putncalls]

At 10 Ts that would be 3Ts*22%*770 million per T or 500 million? They have 900 million in cash on hand.