Citi gets it wrong our Stavros gets it right

[MartiniStocks9756]

Just got my present from IOC in the mail. So, I think it was mentioned here before, but plain as day in the materials, that the BOD can ignore any outcome with the exception of the election of the BODs. Hope that does not happen in November.

[2126]

A great deal of the speculation and conjecture right now (perhaps all of it) stems from the claims in Phil's various press releases that IOC is on the verge of selling some or all of its assets! OH MY! This was then picked up by a few news outlets. Now, as often happens, gross speculation becomes fact for many people.

There is no indication that IOC will sell its E/A holdings at this time. There is no indication that IOC will agree to a takeover at bottom dollar prices. There are statements and facts that IOC may need cash sometime in 2017, should the Interim Resource Payment be delayed due to A7.

There are also statements and facts that IOC is considering the monetization of some of its assets (which is actually what its main corporate purpose is). There are also statements and facts that IOC could issue additional shares to fund any shortfall in cash next year prior to the Total payment. There are also statements and facts that IOC has been considering the value and efficacy of agreeing to A7.

Waiting on things to happen in the IOC world is often (almost always) frustrating, but I don't see the value in fanning the flames of negative speculation based on rumors. Why not speculate that IOC will make a great deal in selling down some share of its assets; or that the OSH certification will be excellent and lead to a welcome rise in pps; or that the BOD is actually competent?

[admin]

Useful reminder, 2126..

[Indoreservoir]

A great deal of the speculation and conjecture right now (perhaps all of it) stems from the claims in Phil's various press releases that IOC is on the verge of selling some or all of its assets! OH MY! This was then picked up by a few news outlets. Now, as often happens, gross speculation becomes fact for many people.

There is no indication that IOC will sell its E/A holdings at this time. There is no indication that IOC will agree to a takeover at bottom dollar prices. There are statements and facts that IOC may need cash sometime in 2017, should the Interim Resource Payment be delayed due to A7.

There are also statements and facts that IOC is considering the monetization of some of its assets (which is actually what its main corporate purpose is). There are also statements and facts that IOC could issue additional shares to fund any shortfall in cash next year prior to the Total payment. There are also statements and facts that IOC has been considering the value and efficacy of agreeing to A7.

Waiting on things to happen in the IOC world is often (almost always) frustrating, but I don't see the value in fanning the flames of negative speculation based on rumors. Why not speculate that IOC will make a great deal in selling down some share of its assets; or that the OSH certification will be excellent and lead to a welcome rise in pps; or that the BOD is actually competent?

On the sale, we know they have a dataroom open in Singapore and may sell part or all of PRL 15 or other interests, depending on the price.  And PM and many worry what will motivate the Board to make decisions.  It is clear from the Board compensation issue that shareholder value has little to do with their decisionmaking.

Sad to say.

"Why not speculate that IOC will make a great deal in selling down some share of its assets"

A: because they did such a lousy job on the Total sale, lest you forget.  The only criteria I use to say this is shareholder value.

"or that the OSH certification will be excellent and lead to a welcome rise in pps; "

A: on this I agree with your desire for optimism. I’ll put money on 9-10 Ts

"or that the BOD is actually competent?"

A: What a joke.  There there is ample evidence of their incompetence, and desire to enrich themselves without regard to shareholder value (look at the graphs they present in the 2015 and 2016 MICs – IOC is the worst performing asset presented (maybe oil slightly poorer in this year’s MIC).  Yet they award themselves huge bonuses and pay rises without regard to performance.

I harp on about the compensation but it is so obvious I am surprised some others ignore it.  How can anyone square the compensation with share price performance?  Indeed, the Board knows its an issue - they devote some 35 pages (from memory) to compensation in this year’s MIC.

So, lets do a quick summary of Board Performance

Positives:

1. Held 8 Board meetings

2. ?

Note: The IOC Board can’t take credit for Operator actions on PRL 15 – does anyone really think that pink shirt and cronies can tell Total or OSH anything about an LNG plant or operating? I hope not.  So the fact is our Board is taking all credit for things the Operator is doing.

Negatives:

1. Huge compensation to Board  and pay rises to execs

2. Drilled several costly exploration wells, and without obtaining flow rates on any except T, awarded huge bonuses ($3m to pink shirt alone) for the phantom certified volumes.  The only people who will pay anything for these volumes without flow rates are the IOC Board to themselves.

3. Spent much of our cash reserves on the exploration wells – share price has done nothing in response to the well results

4. Sale of the refinery, our only profitable asset, just before dropping oil prices which might have made the refinery very profitable. (And now the twits may not have written the SPA well and may be on the hook for tank sludge. Who wouldn’t sell an old refinery and tankage on an as-is, where-is basis? . Just stupidity if we end up paying for the sludge removal - – we’ll see, )

5. G&A steamlining and cash burn – doesn’t look like we’ve done much to drop our burn – our available cash keeps decreasing while our Q1 G&A went up.  Hope I'm missing something on this.

6. probably others but enuf for a Sunday night.

Good luck PM

[sageo]

Indo - Appreciate your thread for " today 12:40 am "

  To quote one of your phrases "or that the BOD is actually competent" . I don't doubt their experience,but at the same time I believe it is fair to doubt their competency when it comes to handling our money. (...excuse me,the borrowed [someone else's  ] money . )   I just received a mail-box full of "white stuff " (nothing "blue yet) for all my family brood. I just read a   lot of "half-truths" and a lot of "not at all trues " ." border="0" class="smilie" src="http://shareholdersunite.com/mybb/images/smilies/huh.gif" />   Now waiting for "blue info" .   Soap-opera continues . A good  day and evening to you,sir.

[MartiniStocks9756]

We are in a swirling cauldron of guesses and anxiety. For one, what I am most anxious about at the moment other than the price per share is what the companies that are going to evaluate the E/A results and data are forthright and conduct their business to estimate the assets in a professional manner and with due diligence. I guess I would not want to see the OSH estimators come up with 8 TCF and then Total and IOC come up with 11 or more and then who wins. I guess we ultimately get that payout down the road with the second evaluation but does that right size the plant and trains etc. This is a big deal. Obviously there were charts made awhile back that shows OSH and Total as not making as much money with higher totals. Not sure how that worked but could that have an effect on the evaluating companies. Then of course would OSH not want more gas to help with the third train at PNG LNG. Win win for them so I am skeptical on all the initial formulations of who wins and loses. Also, where does PNG can in on all of this. They stand to do better with a bigger number I surmise.

The BOD and their decisions will certainly impact us once they get their claws on the cash and how they manage it. Hopefully, they manage everything so that we make it financially to certification without borrowing more and issuing shares. Somehow I think they will not make that management goal.

Lots of stuff in the cauldron. Need a wizard to pull it all off in a positive way for the shareholders.

[sageo]

We are in a swirling cauldron of guesses and anxiety. For one, what I am most anxious about at the moment other than the price per share is what the companies that are going to evaluate the E/A results and data are forthright and conduct their business to estimate the assets in a professional manner and with due diligence. I guess I would not want to see the OSH estimators come up with 8 TCF and then Total and IOC come up with 11 or more and then who wins. I guess we ultimately get that payout down the road with the second evaluation but does that right size the plant and trains etc. This is a big deal. Obviously there were charts made awhile back that shows OSH and Total as not making as much money with higher totals. Not sure how that worked but could that have an effect on the evaluating companies. Then of course would OSH not want more gas to help with the third train at PNG LNG. Win win for them so I am skeptical on all the initial formulations of who wins and loses. Also, where does PNG can in on all of this. They stand to do better with a bigger number I surmise. The BOD and their decisions will certainly impact us once they get their claws on the cash and how they manage it. Hopefully, they manage everything so that we make it financially to certification without borrowing more and issuing shares. Somehow I think they will not make that management goal. Lots of stuff in the cauldron. Need a wizard to pull it all off in a positive way for the shareholders.

  Thanks,Martini - Two "big stand-outs" in your thread for me .

         1)  THIS IS A BIG DEAL....no truer words were ever spoken (for me at this time).  [  ...the assets ARE HUGH ]

          2) Somehow I think they will not make that management goal .....at this time I agree, and I hope we are both wrong .

   So far,management"s explanations for our "cash burn" have been very poor to say the least.  ( Somehow,preserving cash "101" seems to have left the station a long time ago....extremely  sad for us shareholders.)   However , I guess I am still trying "to keep the faith" ." border="0" class="smilie" src="http://shareholdersunite.com/mybb/images/smilies/lightbulb.gif" />

[2126]

Basing one's opinion of the current BOD on the compensation plan that was negotiated by Hession with the prior BOD seems misplaced. (Yes, the compensation plan was restated, but it is never common practice to decrease a CEO pay in such an instance).

Restating an opinion repeatedly (that the Total deal was lousy) does not make it a fact. The deal with Total had a $400 million completion payment; has an unlimited interim resource payment; has a further payment at first cargo; a 30% share of the plant; and a final uncapped resource payment. Most agree that the Exxon offer was nowhere close to that deal; hence, letting Phil go in the first place; dropping the exclusivity with Exxon; and hiring Hession to make a deal that the old BOD wanted.

[Stavros]

2126: who writes your material, Michael Lynn?

[Indoreservoir]

Basing one's opinion of the current BOD on the compensation plan that was negotiated by Hession with the prior BOD seems misplaced. (Yes, the compensation plan was restated, but it is never common practice to decrease a CEO pay in such an instance).

Restating an opinion repeatedly (that the Total deal was lousy) does not make it a fact. The deal with Total had a $400 million completion payment; has an unlimited interim resource payment; has a further payment at first cargo; a 30% share of the plant; and a final uncapped resource payment. Most agree that the Exxon offer was nowhere close to that deal; hence, letting Phil go in the first place; dropping the exclusivity with Exxon; and hiring Hession to make a deal that the old BOD wanted.

2126 – IMHO you divert attention by half truths and rumour rather than facts.

Pink shirt pay : First, you can certainly cut compensation of a CEO - look at Coleman's base pay 2014-2015, and many others in the Oil and Gas business. In our case, the Board has increased it every year since 2013. Why? Certainly not for us shareholders!

And there was absolutely no reason to add to his benefits/compensation by putting him on the executive compensation scheme IN ADDITION TO his previous employment contract.  The Board should have given him the option – take one or the other, but not both.  Of course, they gave him both, a fact you ignore.

And why do I come back to this compensation issue? Because it is a clear demonstration of Board incompetence. It is the one thing totally in Board control and they’ve handled it miserably and to the detriment of shareholders.  That is a fact.

Total deal : one only need review the stock price to judge that. An inconvenient fact you also ignore.  And where is that $400 million now?  How much did we blow on Wahoo Bobcat Raptor for phantom discoveries when we may have been able to defer these wells?  But hey, pink shirt got $3 million for those phantoms - certainly a reason for him to drill them!

'Most agree that the Exxon offer was nowhere close to that (Total) deal" From where does this little gem emanate? Restating an opinion repeatedly does not make it a fact. What information do you have, pray tell? My information (fwiw) from a non-company insider (think 3rd partner) is that Exxon had a better deal on the table and Phil held out for more. Why pink shirt let exclusivity expire and recommended Total is a mystery but perhaps related to french business practices, no?

Enuf.