Where will IOC get its project money? What?!!

[Palm]

I see over on Yazoo a discussion going on about concern of where IOC might ever come up with their share of the project money. The number $500 million is bring thrown about by bonk, and Eric even posted that they may have to do an offering again, and that it makes sense because last time pps was up like this they did an offering.

Now, someone there has thrown out and asked about how much they will get from the sell-down. Great question so far not responded to. Seems to me we have a few people in the know so let's see if we can solve this huge dilemma. So fill in the blanks and lets see what we can offer up as possibilities.

If IOC is required (they are) to sell a chunk of PRL 15, what might they fetch? Let's assume they sell Dumas requirement of 32.5%.

How much might they be able to borrow once a sell-down occurs? Didn't Collin state a while back how much they could borrow NOW to get their gearing ratio up to industry norms?

Other possible sources?

I bet we get this figured out. Anyone think we'll have to do an offering?

[Tree]

I see over on Yazoo a discussion going on about concern of where IOC might ever come up with their share of the project money. The number $500 million is bring thrown about by bonk, and Eric even posted that they may have to do an offering again, and that it makes sense because last time pps was up like this they did an offering.

Now, someone there has thrown out and asked about how much they will get from the sell-down. Great question so far not responded to. Seems to me we have a few people in the know so let's see if we can solve this huge dilemma. So fill in the blanks and lets see what we can offer up as possibilities.

If IOC is required (they are) to sell a chunk of PRL 15, what might they fetch? Let's assume they sell Dumas requirement of 32.5%.

How much might they be able to borrow once a sell-down occurs? Didn't Collin state a while back how much they could borrow NOW to get their gearing ratio up to industry norms?

Other possible sources?

I bet we get this figured out. Anyone think we'll have to do an offering?

McDuck-San,

SInce the slayed arguments of bogus resource, crappy LNG macro, greedy management,  political risk, project peril I am pleased now that the HSJ and the 'Burbot' are concerned where ennerOle will get $500 mill????

It just seems all is stacked against ennerOle, they ony have:

1)  60% ownership of a $22 Billion E/A field,

2)  A free half billion+ CSP

3) Mitsui option for another $500 mill chunk of E/A

4) Known bidders of JKM/Shell and XOM (wild guess there!) buying 25% - 32.5% E/A

5) A PRE deal that tripled E/A bids and validated a T-2 with bigger and broader structure than E/A

6) More chunks of T-2 to sell-off

7) 5Mtpa production facilities and commitment for 8Mtpa, paid for by SHI/FLEX and EWC

A little debt should be no problem, I like debt when debt will be leveraged into multiples of fun-loving profit.

Better yet, I like the HSJ's fear that IOC has an offering at $95.

Even better yet, ennerOle logically has no reason to exist and we just be snapped up in a bid war and that $95/sh pps would come in handy in spiking offers.

I say let 'em worry about the $500 mill minutea, we can sit back and enjoy the big pic.

[Palm]

That's just great Tree. You throw all of that folly out there and nowhere do you quantify anything. Must mean you agree that they can't get to the $500 million. I'm selling.

[ArtM72]

Quick reply: yawn.

I'm amazed at some of the coverage in the financial media of the Shell statement. Even suggesting the likes of Chevron and Exxon have yet to express interest a d that somehow Shell is the only suitor. Goofy.

[Tree]

That's just great Tree. You throw all of that folly out there and nowhere do you quantify anything. Must mean you agree that they can't get to the $500 million. I'm selling.

Gee,

Is it just me, or does the whole discussion of where IOC gets $500 million for their project costs seem kinda worthless?

Key words are 'project costs'.  Since a 'project' will be preceded by a little thing called a SD, it seems kind of a no brainer that Collin will remember to ensure ennerOle gets at least $500 mill for a share of an asset worth multi-billions.

Art is right - 'yawn'.

[Palm]

So it IS that simple then Tredaddy? Well then let's just go enjoy the rest of our Saturday and consider this matter closed.

The End. Hohoho

[Tree]

So it IS that simple then Tredaddy? Well then let's just go enjoy the rest of our Saturday and consider this matter closed. The End. Hohoho

SweatyPalms,

Not so quick my leeeeetle friend.  This matter be as far as east is from west from being closed.  Remaining are unsettled matters like:  which bank the Billion $+- transfer will be made from, the bank routing#  -or- if that Billion$+- comes in form of SM stock, what day this all happens, morning or afternoon, and if we need to prep a stomach pump for Maui and have a buxom nurse at his side to prevent an accidential VOverdose.  Actuall, several Ubers may need that level of care, maybe we should create a 'watch list' and call in FEMA.

[jft310]

So it IS that simple then Tredaddy? Well then let's just go enjoy the rest of our Saturday and consider this matter closed. The End. Hohoho

My thoughts:

I think that Mitsui will op in for the full 5%.Assume the $22 Billion number for the value of E/A were right well at 5% IOC double $500 million. Since the bids have tripled well the $22 Billion may need some play. Thats a buyin. Part of the 32%???

IOC needs cash to pay for their infrastrure builds at E/A. One of the larget is the pipeline cost. I think Exxon will do an offtake and part of that offtake will be a $100 miilion for IOC to build a peipeline from E/A through the new wharf and to the Exxon T. IOC cost for E/A infrastructure could approach $500 million.Roads ,wharfs, building etc.

I see a selldown but not all the cash upfront of E/A assets 25-32% range area.Using PRE selldowns with prices $3 plus seem right.

IOC will need $500 million for their part of the PRE deal to drill the wells and thats what Bonkie computed that IOC needs to have to complete the PRE contract.

On one of the calls Collin stated IOC could borrow with todays assets $600 million. Before booking assets from an FID.Then IOC could borrow more of course.

The Japanese have offered to fully finance the IOC LNG plant foe 1/4 of 1% a year in exchange for guranteed offtakes. Source a Harry CD from an RJ Institutional Call.

[Palm]

PREdeal schmedeal. It's second fiddle to the Gulf LNG deal. PRE will be simple after Gulf is approved, funded, monetized, borrowed against. Having 500 million for the PRE deal will be nothing. Especially no need for an offering.

Tree's concerns are more paramount than how we get the $500 million.

Yawn; back to the hammock

[Palm]

JFT, just reread my post and didn't want you to think I was smacking you or anything. More a poke back at bonkic and the "thinking" they are engaged in regarding the funding. Seems their arguments are getting further out there as they try and do anything they can to sew doubt. Just not there. Your points are what we focus on, not theirs.