Oil Search Resource Press Release

[Stavros]

XOM now knows what they must beat - - - it's an all scrip deal with OSH valued at about US$ 44.00

It seems to me that XOM will now pull the trigger on their Superior Proposal at about $50

[Putncalls]

What about A7?

[ArtM72]

What about A7?

I want to know what that recertification is about after the first LNG shipment that was mentioned in the recently released 2015 Reserves and Resources Statement dated 2/23/16.

Quoting from page 4:

"PRL 15 Under the Sale and Purchase Agreement with the sellers of the PAC LNG group of Companies, the Elk and Antelope fields within PRL 15 are subject to two independent certifications. The First Certification is planned to commence in March 2016, with completion expected in mid-2016. The Second Certification will occur one year after delivery of the first commercial LNG cargo."

That doesn't quite jive with the statement OSH owes Pac LNG nothing because the certification was less than 7.  It sure would be nice to understand how this all was evaluated.

[Putncalls]

The PAC-OSH contract is between OSH and PAC. I have no idea how that option to wait for A7 worked?

[cybersssss]

Great find art. So oil search is still on the hook for a balance payment and they are claiming not?!

Makes sense that paclng refused to wait for a7 if they knew it could be rigged and wanted to let this word out. Many paclng owners own lots of ioc stock.

Looks like Botten plan here is spoiled. Let's hope.

[Putncalls]

How is Botten's plan spoiled? This news from OSH insures a yes vote from IOC. OSH still gets another LNG facility. Does XOM already have this baked into their plan?

[Stavros]

Putz:

This news from OSH ensure a big fat NO VOTE for the current OSH offer.

For some reason you view everything backwards

[Putncalls]

Well.... At least it's a different perspective. Why? This implies a minuscule resource payment from TOT.

[cybersssss]

Agreed. The news has turned me off to any notion of a cvr. Good riddance to thr cvr under the direction of oil search and their boy Hession.

Oil search will do the same to ioc if they buy them. Just as they did to Paclng. Difference is that paclng will get paid again after another certification. After the first cargo delivery. We give ALL that up if we agree. They gave it back to total per the mou!!!!

Phil was absolutely correct in saying this.

To repeat. The biggest giveaway is the final certification once the field starts producing. They are obfuscating us with a7. They can have their carrot. Vote NO!

[SupaSage2003]

XOM now knows what they must beat - - - it's an all scrip deal with OSH valued at about US$ 44.00 It seems to me that XOM will now pull the trigger on their Superior Proposal at about $50

It will be interesting to see where IOC shares trade tomorrow.  Based on some figures I've compiled, the implied CVR value (vs. the value per share of the all-scrip offer) over the period May 20 through June 30 (after the OSH bid until right before the rumor that another bidder exists) has averaged about $2.64.  Adding that to the current $43.32 (derived from OSH's current price of AUD $7.05), I arrive at $45.96.  I would think that is roughly where the shares could trade tomorrow.  If the market's view on the final resource estimate decreases, so should that $2.64 number.  At the worst, I don't think the shares should trade below $43.32 because if they do, they will essentially imply that Antelope 7 will not increase the final resource estimate at all AND that no other bidder (i.e., Exxon) will emerge and that we will have to accept Oil Search's all scrip offer.  So in my mind, $43.32 is the "back up the truck" price level tomorrow.

If Exxon does in fact bid 10% higher (over the value of the current OSH scrip offer) to win over IOC shareholders, that would mean it bids $47.65.  Adding the average CVR value of $2.64, I arrive at $50.29 per share.  It would seem that is where IOC's share price could stabilze immediately and near term.  Of course, for Exxon to ensure that its bid is deemed "superior" by InterOil's BOD, Exxon might bid something materially higher than $47.65, which would put IOC's price at post-bid stabilized price at somewhere over $50.29.  In my view, Exxon might offer 20% more to ensure they get IOC's board to deem their offer to be superior.  In that case, the all scrip value would be $51.98.  Adding the $2.64 CVR value would get us to $54.62 while we wait for Ant 7 to be drilled and the final resource number to be disclosed.

Hope that helps frame my thinking on the IOC situation.  Feedback would be appreciated!