Hession Performance

[2126]

Just a little refresher on Hession's performance:

• Pulled IOC out of exclusive negotiations with Exxon for E/A which presumably would not have provided IOC with any interest in the potential LNG plant
• Guided IOC to a superior deal with Total which provided a $400 million up-front payment, an uncapped interim resource payment, additional payments at FID and first gas and final resource certification, and, very importantly, a significant share of the potential 2-train plant
• Transitioned IOC and the IOC BOD from a entrepreneurial-focused operation to a more business/monetization-oriented company
• Sold off the midstream IOC refinery and downstream distribution business for over $500 million at the top of the oil price market to provide funding for both exploration and appraisal well program
• Successfully defended IOC in international arbitration against an OSH attack on the IOC/Total deal
• Consolidated IOC office operations and trimmed much excess spending from the IOC budget
• Developed and guided IOC through an extensive seismic and aerial gradiometry program over much of IOC's extensive holdings
• Successfully provided for all necessary objectives to hold and retain all IOC leases in PNG
• Maintained a very successful relationship with PNG locals, its central government, Prime Minister, and Petroleum Ministers
• Worked with Total to get central processing plant for E/A development located in Gulf province
• Sheparded IOC exploration to highly successful discovery wells at Raptor and Bobcat
• Guided IOC through very successful appraisal well program at E/A with results showing larger field than expected; connectivity between A1, A5, and A6; and more dolomite than expected at A5/A6
• Ushered IOC to the brink of a very likely highly positive resource certification and interim resource payment
• Has presumably been in negotiations with other companies regarding sell-down of Bobcat and/or Raptor
• Other than media speculation, has not indicated in any manner any intention of entertaining the sale of IOC to any other company

On the downside:

• Wahoo was a disappointment
• A4 and A4-ST1 had many delays and problems that might have been avoided with use of better equipment (though Orubadi shale was a major reason as well)
• Communication with shareholders and the public could be better (though this could well be a distinct strategy to not provide potential takeover companies with information)
• Officer and board equity positions in IOC could be higher (though this is actually a BOD issue based on its restrictive Insider trading policy)
• Has failed to request that the IOC BOD diminish the bonus provisions of his employment contract . . .

[Martinistocks]

Do the downside bullets outweigh the positive bullets. Do the downside bullets deserve another one on the cash flow and debt circumstances?

[jft310]

Excellent recap

[ArtM72]

Here's the first line:

"Pulled IOC out of exclusive negotiations with Exxon for E/A which presumably would not have provided IOC with any interest in the potential LNG plant."

So at the very outset there is a presumed conclusion which never has ever been justified by anything more than pure speculation.

Another: How many of those on the positive list did Hession complete that which had been substantially done? Or, alternatively, the solution of a problem Hession's work product created?

Finally: Giving Hession credit for the size of Elk/Antelope is to divinify him. That's a bridge a little tooooo far.

Oh yeah. Just so I don't leave with a contribution to the "Not so good" list: Forgetting about Antelope South. Do you think we just have too damn much gas?

[kerekesc]

I, too, am impressed with Mr. Hession's long list of performance achievements since joining IOC.  This list is only exceeded by a list of his experience and background when he left Woodside to come to IOC as its savior after Mr. Mulechek's dubious tenure.  I was, and still am, so impressed with all these lists that I just knew that IOC will easily move from its share price by a factor of two.  What I so naively failed to realize that this not necessarily meant that the share price will double (from around 65 when he took over).  Currently, a double from the low of 25 a few months ago would really justify all of Mr. Hession's long list of performance achievements....wouldn't it?  I am retired, and Mr. Hession probably makes more from IOC in one month than I do in one year....yet I probably have more shares than he does.  No matter...I am still impressed!

[Palm]

Also on the downside:
Fumbled with the negotiations with PAC group allowing OSH to eventually file a Dispute and delaying Completion of the SPA agreement and more cash to be spent/wasted.

[will2bgreat]

Don't forget the biggest downside.  Failed to put a certification timeline in the Total transformational deal with a liquidated damages clause thereby causing the financial position we are currently experiencing.  None of us would be discussing this right now if this clause was in the contract.

MH could be drilling away right now and Total would be picking up the cost of money as a result of their delays. So no, I'm not impressed with a man that makes +$6MM per year and has put us in this situation; I expect better.

[jft310]

Civelli is a snake in the grass . Since we were not there we can not say Hession messed up without a view of the discusions. More logical is Civelli cut a better deal with Oil Search .Civelli wanted more money upfront , money Hession did not have . Money speaks in business especially cash up front .
The amount of cash upfront is known and is not a guess. Hession would have needed to issue shares to raise the cash needed . A huge dilution to shareholders . He wisely said no dilution .
That was a smart decision .