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Just some thinking going on. Long day and I may not be thinking clearly at this hour so please let me know if I messed this up.
If the deal goes through, then 100% of the interim resource payment and FID payment (among others) go to OSH. The below spreadsheet shows how the payments to OSH (post deal) or IOC (no deal) add up using the SPA incremental pricing for the interim resource + FID payment. The CUMULATIVE NET INCREMENTAL PAYMENT is the total payment from Total for different volumes. But if there is a deal, then IOC shareholders will be paid according to different terms spelled out in the buyout agreement. The last two columns on the right show what % of the payment from Total that OSH keeps AFTER paying off IOC shareholders the CVR portion per the buyout terms. As you can see here, the larger the field, the lower the % of the total payment that is left to OSH after paying us. But because the total payment is getting larger and larger, OSH's cash from Total that they keep gets larger and larger. E.g., in the 11.8 TCFE case, the full payment by Total to OSH will be 4.221 Bln USD. OSH gets to keep about 36% or 1.53 Bln USD AFTER paying off IOC shareholders. The 40+% of E/A is already sold to Total. They own it. So essentially OSH makes money by buying IOC. It costs them nothing unless IOC shareholders want cash instead of OSH shares. If everyone wants cash, then they would have to cough up a little over 2 Bln USD, but the agreement prevents a full cash payout to all shareholders limiting it to only 770 Mln USD. (How is that supposed to work out???) That smaller cash amount is easily available in the 7.1 TCFE case and higher.
So it appears that OSH actually makes money by buying IOC (ignoring stock dilution). But OSH will sell down 60% of the IOC interest in E/A in the deal to Total per the MOU with Total. (is that a binding agreement yet???). I would think OSH sells down to Total AFTER they get the interim payments below.
Maybe I'm looking at this too long, but it seems OSH makes money buying IOC and then makes more money selling part of IOC assets to Total. There's no real cost in this to OSH at all. They gain cash in the deal even if they sell nothing to Total. They will have more cash after all the deals are done than they do now.
Am I missing something? When you buy something it's supposed to have a cost.
How could the IOC board agree to allowing someone have a deal like this? This seems crazy. They are getting the company for less than the implied value because they net a gain on the resource + FID payment from Total. Why wouldn't other companies join in to bid this much higher? I don't get it. It's a steal.
IOC should hold out until it receves the payments through FID before accepting any offers, then sell after the cash is in hand. Why would anyone agree to this give away? It's nuts!
VOTE NO ON THE DEAL!
|
PAYMENTS BY TOTAL TO IOC OR OSH PER SPA TERMS |
|
|
|
|
|
|
GROSS RESOURCE, TCF |
USD/mcfe |
GROSS INCREMENTAL PAYMENT |
WORKING INTEREST |
NET INCREMENTAL PAYMENT |
CUMULATIVE NET INCREMENTAL PAYMENT |
% OSH KEEPS in BUYOUT |
AMOUNT OSH KEEPS IN BUYOUT |
|
0 |
1.0 |
0 |
0 |
|
0 |
0 |
0 |
$ - |
|
0 |
2.0 |
0 |
0 |
|
0 |
0 |
0 |
$ - |
|
0 |
3.0 |
0 |
0 |
|
0 |
0 |
0 |
$ - |
|
0 |
3.5 |
0 |
0 |
|
0 |
0 |
0 |
$ - |
|
3.5 |
5.4 |
0.6 |
$ 1,140,000,000 |
0.40127 |
$ 457,447,800 |
$ 457,447,800 |
100.00% |
$ 457,447,800 |
|
5.4 |
6.2 |
0.8 |
$ 640,000,000 |
0.40127 |
$ 256,812,800 |
$ 714,260,600 |
100.00% |
$ 714,260,600 |
|
6.2 |
6.5 |
0.8 |
$ 240,000,000 |
0.40127 |
$ 96,304,800 |
$ 810,565,400 |
88.56% |
$ 717,872,030 |
|
6.5 |
7.1 |
1.00 |
$ 600,000,000 |
0.40127 |
$ 240,762,000 |
$ 1,051,327,400 |
76.49% |
$ 804,145,080 |
|
7.1 |
11.8 |
1.00 |
$ 4,700,000,000 |
0.40127 |
$ 1,885,969,000 |
$ 2,937,296,400 |
42.14% |
$ 1,237,917,950 |
|
11.8 |
15 |
1.00 |
$ 3,200,000,000 |
0.40127 |
$ 1,284,064,000 |
$ 4,221,360,400 |
36.32% |
$ 1,533,252,670 |
|
15 |
20 |
1.00 |
$ 5,000,000,000 |
0.40127 |
$ 2,006,350,000 |
$ 6,227,710,400 |
32.03% |
$ 1,994,713,170 |
|
TOTAL |
|
|
$ 15,520,000,000 |
|
$ 6,227,710,400 |
|
|
|
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05-22-2016, 03:48 PM
(This post was last modified: 05-22-2016, 03:52 PM by jft310.)
Kaliboo nails it . Vote no ! Watch how quick they come back with a new package more Interoil shareholder friendly . Think O'Neil doesn't want this deal ?? Of course he does . He will be screaming change the terms make it work .
We have a valid deal with Total . Access to as much money as we need see the change on OSH price with their 27 percent dilution . All we need are valid reasons for money !!
Look at how much we are giving up with no second certification payment . This is a definition of Robbery !!
Stop the nonsense , man up and vote no on deal ! Very little risk we don't get a sweetened deal
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The cost is ~300,000,000 shares of OSH. What are they worth with 4 or 5 trains?
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05-22-2016, 05:06 PM
(This post was last modified: 05-22-2016, 05:13 PM by jft310.)
So Hession wants to collect his $37 million for selling the company plus 2 times his salary for 1 year with a successful deal by mid July 2016 . Most should think that's crazy . No we can rewrite his employment contract but we can make him work for it . Vote no he has a huge incentive to get us a good deal . He even has a date incentive to get us a better deal . Think this is a good deal see Kaliboo above . Bad deal . Think O'Neal wants this hanging around unsolved ?! Huge pressure to get us a better deal by many people , Starts with no on this deal and what else is out there ???
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Puts we Interoil could have 4-5 trains if their TBR work is valid . Why be satisfied with a single digit ownership of OSH when we have 30 percent today of a seperate plant. They are not paying us for our 6 T of certified gas TBR , no second certification payment , losing over 20 percent ownership in an LNG plant , no dollars for exploration , selling on the bottom . Stupid defined .
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'jft310' pid='70062' datel Wrote:
Kaliboo nails it . Vote no ! Watch how quick they come back with a new package more Interoil shareholder friendly . Think O'Neil doesn't want this deal ?? Of course he does . He will be screaming change the terms make it work .
We have a valid deal with Total . Access to as much money as we need see the change on OSH price with their 27 percent dilution . All we need are valid reasons for money !!
Look at how much we are giving up with no second certification payment . This is a definition of Robbery !!
Stop the nonsense , man up and vote no on deal ! Very little risk we don't get a sweetened deal
JFT - Yes,Kaliboo DOES nail it .What a pathetic,sorry a-- bods we have .Their responsibility to the shareholders means nothing to them,I guess. My family's thousands of shares won't mean "a hill of beans" in the long run, but we can have at least one ' happy moment' when we vote NO . If we should succeed, the sweetened offer should at least be a little better. What a sad ending to this "once great "story. As I have said many times before.....someone (OSH, TOT or another acquirer) is going to make a hell-of-a-lot of money off of our ng (and condensates) in the future . [ Yes,I understand that today isn't "the future" and I understand they will have to spend a lot of money to get there .] Just sayin' .
Maybe 'happy daze' will come again ! .
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On 10.2 TCF THE 300MM share value would be $3-4 just on this item alone. Somebody publish an analysi showing post deal OSH cash would be +$300MM US. I dont recall the assumptions.
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["Maybe I'm looking at this too long, but it seems OSH makes money buying IOC and then makes more money selling part of IOC assets to Total. There's no real cost in this to OSH at all. They gain cash in the deal even if they sell nothing to Total. They will have more cash after all the deals are done than they do now."]
They sell 60% of PRL15 bought from IOC in the proposed deal to Total for the same price, meaning Total is liable to pay out proportionally less in the original certification pay, at least that's how I read it, so I have a feeling you are double counting this. The part of PRL15 which they sell to Total proportionally lowers their claim to the interim (and final) certification pay.
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What part profit, what part cost of doing business with Total?
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I believe that such calculations should also take into account the deduction from the Interim Resource Payment under the original SPA of the carry costs for all of the appraisal wells that were carried by Total. This issue has been left out of all of the discussion so far, when outlining the pros and cons of this deal. IOC was clearly provided with some credit for this carry cost in the calculations of the amount to be paid by OSH under the proposed deal.
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