MIC delivered today

[Palm]

JFT, you should stop trying to tell people what to do and telling people to be "assured" the court will do this or that, and that the court "accepted the Paradigm value". You have stated several things about the court proceeding which have been shown to be incorrect statements. You present a side as gospel and others come back with how Exxon will likely respond. That is what I am doing having seen this stuff before. You not long ago called Phil a liar and now he is your hero again.

The message I "send" by saying I'm selling is nothing but full disclosure like what you do when you say you are dissenting. You DO NOT know, nor do I what the court will do by any means. You are relying on some limited information from Phil. That's great, but very little has been made public to others. I'm limiting my risks on a VERY high-risk stripped down resource company trying to survive in PNG. Doesn't seem too unreasonable.

Don't try to shut me down, because you won't. Don't try and discredit me because you have waaaayy more things to be discredited on over the years. NONE of us has the absolute answer in this.

[Kaliboo]

Those 2 points have been vetted before: 1. The pps before the OSH made their offer was lingering in the high $20s, then when rumors started swirling it moved to $30. OSH made their initial offer of $40, then came XOM at $45 and they included paying off the debt and the termination fee with OSH. The Certification payment is part of all of that. Future payments were considered in light of timing and cossts to get there, and took into consideration the hard time to get a project financed with a very weak partner in IOC. IOC on its own has always been a negative when talking to banks on a project. 2. The 30% share in an LNG plant is vapor. There is no existing contract and a tough row to hoe to get one with IOC in the picture. IOC as a company would not be valued for what it might add to getting a contract in place. That value is with a Total/Exxon.

____________________________________________________________________________

Palm – great posts and you’re absolutely right on the two points.  People keep stating that the Total payments and the exploration assets are not in the valuation.  But they are and it’s clearly stated in the BMO opinion.  “Vapor” is a generous description of the Total plant.

Kaliboo – I am seriously impressed, certainly with your effort and willingness to communicate your thoughts, and even most of your points.  Thanks for doing what you did.

However, it seems you’re in a bind if you haven’t decided yet how to vote.  I’ll make the following thoughts to your numbered points:

1-3.  Uncompetitive market – So what?  What is the remedy?  No one is going to “deem” a competitive U.S. gas market to value assets in PNG.  No one forced IOC to explore there.  It’s like saying a raw diamond isn’t getting a fair price in the Congo because it’s not Amsterdam.  See also "Precedent Transactions"  in BMO, E-17. They took in sales over the whole region, not just PNG.

4, 6, 8 and 9.  You’re arguing potential.   Sure, anyone with exploration experience would salivate over IOC’s acreage… BUT… it’s not a financial asset.  It’s hopes and dreams.  That’s why farm-ins usually consist of work programs and success bonuses, not cash.  And BMO did say they considered it and even gave it some value:

“BMO Capital Markets notes that the Projections did not include estimated future cash flows for the Company’s exploration assets (other than PRL 15) given the challenges associated with forecasting cash flows for such early stage assets. However, for the purposes of the discounted cash flow analysis, BMO Capital Markets included the average of equity research analyst net asset value estimates available to BMO Capital Markets (which average was US$272 million) for these assets in calculating an implied per Share discounted cash flow reference range. BMO Capital Markets notes that given (i) the uncertain economics of these exploration assets, (ii) the near term funding required to maintain the Company’s interest in these exploration assets, and (iii) the market feedback provided in respect of these exploration assets from the review of strategic alternatives undertaken by the Company, the average of equity research analyst net asset value estimates available to BMO Capital Markets for these exploration assets may overstate their value. BMO Capital Markets also considered the book value of these assets.

5.  IOC should be given a higher P/E.  I know a drowning man will grasp at any straw, but really?  Anyway, the P/E given by the market was already implicit in IOC’s price when it was in the 20’s.  Since then, it has doubled.

Voting now comes down to yes, no, and no with dissent.  “No” makes little sense, particularly if both “no”’s kill the deal.

The appeal judge clearly was reluctant to interfere with a shareholder decision.  Given the blatant unfairness of the Fairness Opinion, he had to.  It’s not going to happen again.  The BMO opinion looks like a well decorated Christmas tree.  The deal will pass, the courts will approve, and the dissenters will be heard.  You just have to decide if you want to be part of that. You won’t get Exxon shares or dividends or appreciation while the dissent goes on, and you won’t get any CRP, if any, upside.  But maybe you’ll get more cash.

Palm and I have made the same decision, although I got out just before the last vote and he indicates he’s out with this one.  For my part, the market has been good since last October.  Let’s hope it continues.

Nothoil, Palm

Thanks for the well thought, nicely written comments.  Sorry this has turned into another lengthy discussion but I think adds more value to those still in.

To my surprise, you have given me new arguments.  Check it out below and tell my what you think.  You make very good arguments against my brainstorm list and that is why I haven't yet made a decision.  It is an uphill battle to get more out of this deal.  No one knows how it will turn out, other than it could take a while.  In my effort to generate this prior very long list, I realized that the volumes A6 took away may be added back somewhat by A7 since it is now drilling eastward looking for the fault.  The info released only in this MIC was that A6 results and reinterpretation of new seismic had caused them to move the fault eastward shrinkng the reservoir volume.  If they find the fault and move it back some good distance westward, then they have to add volume back volume, but how much is anyone's guess.  But they will evaluate that.  So that is a reason to NOT dissent since that is all occurring AFTER the valuation cutoff date of December 14, then that information cannot be used (at least as I read YBCA 193) for the dissetners valuation.

I agree with your "so what" comment.  But I see indications that the appeal court doesn't look at it that way but seem to embrace a sort of "social justice for the shareholders" perspective.  I sure wouldn't think that way, but I think they might; I may be wrong.  But if they don't look at it a different way, then dissenters are in trouble.  This is the legal key to unlock a judgement for much higher value.  I have my doubts that this is feasible.  The appeal court I believe voted unanimiously to kill the deal.  That doesn't seem "reluctant" to me.  I think they were merely reflecting the reluctance of the lower court to overturn 80+% of the shareholders.  I think Phil's case was a slam dunk for the appeal judges, but haven't refreshed on that reading.

Great point on the PE and about the stock price already haven risen significantly.  The MIC makes that point too.  The question as to where stock price should be is what this is all about.  That comes back to who is able to compete in a bid for the company which was my monopoly view point.  Here's my mental model of how this has turned out so far.  The lower court was more of non-intervention-let-the-stockholders-get-what-they-voted-for and let Phil et al pursue their dissent.  The appeal court was a socialist intervention mindset which decided to overrule the overwhelming majority of the shareholders and also a stick-with-the-literal-law mindset and satisfy the one claimant making the case.  It's the appeal court that gives some optimism that a better deal will be obtained for dissenters, but that means if Phil dissents and can't get what he wants in the lower court, it has to some how escalate to an appeal.  I'm no lawyer.  Again this was a brainstorm, which means not digging too far into analysis if at all.  I was a little surprised that the appeal court killed the deal until I read their judgment.  We may be surprised again, but I'm doubting it.

On the exploration assets and value - points you made are very good.  I'm talking about the "unconventional" side of this where I would hope that Phil and company could surprise us.  I've read the text from BMO you quoted and think I understand it, but it seems to be vague and alot of "arm waving" as I phrased, with no real details or facts; just that someone looked at it and here's the value.  You quoted this:

"the average of equity research analyst net asset value estimates available to BMO Capital Markets for these exploration assets may overstate their value.

This statement is a dead give away of their bias to a low side valuation.  How many estimates did they get and from who?  Who paid them?  What does "available to BMO" mean?  Isn't it equally true that they may understate their value if than can overstate it?  There is bias clear as day.  These are very important questions that shareholders SHOULD HAVE BEEN GIVEN ANSWERS TO IN THIS MIC BUT IT WAS INTENTIONALLY NOT PROVIDED.  Thanks for bringing that to my attention again.  When I drill down on it, it creates distrust and suspicion that this is a slanted assessment  favoring what the customers (IOC and XOM) want.  They know that this is one of the most important points about the valuation of the company.  They chose to state this in a way to create high uncertainty but moslty a perception that this number they pulled out of the air with no substance, is way too high.  This is where Phil and company need to have a very strong case.  But given the facts that these don't have rock solid HC volumes nailed down (like "financial assets" as you note), it is true there is a high variability in the value, but I think the UNCERTAINTY, that the value of the assets (in a competitive market) is very high can be dramatically narrowed through statistical approaches as I mentioned.  This makes valuation narrowing difficult and the need for these lessconventional approaches which may or may not be given credit (this isn't my area of expertise; so this is my best hunch from 37 years in industry).  But lets face it. Why did Phil invest in IOC in the first place?  He used available methods to begin determining potential value prior to drilling.  All I'm saying is that those approaches, along with statistical approaches using world and PNG exploration and development data, can greatly further refine the range of theexpected value of the assets, especially given IOC's superior geological interpretations, models, and exploration success.  We'll see how that turns out.  Phil can do a good job on this I think.

I agree dissent is full of hazards.  With every investment one always asks, can this money be put to better use somewhere else?  Everyone has to answer that for themselves.  For me personally, it's about making sure I look under every rock twice before I make a final decision.  I've enjoyed the learning experience which will be valuable in future activities.  As a researcher, self taught investor and oilfield veteran I can't help but to keep digging to see if there is something that might guide my decision better.   For me the needle is leaning away from dissenting now, but there are still cards that may be played in this game which is nearing its end.  I'm willing to wait a little longer to see what those cards might be.

As I am writing this I am realizing another point of argument.  You guys get  the credit/blame for this bubbling up!

The outcome of the Antelope 7 well is material to all shareholders and XOM regarding the final value of IOC.  IOC (not OSH) has a fiduciary responsibility to keep all shareholders updated continually every day until the final meeting on the progress of this well.  They aren't doing that.  IOC has their proxy sponsor calling shareholders and pressuring them (I got called) to vote NOW.  IOC has never provided timely drilling results and results they have provided have been misleading and severely lacking.  Those who will not attend the meeting have to vote 4 days ahead of the meeting; that's the deadline - Feb 10 at midnight EST.    This is what the MIC says:

Page 6-7:  "If additional material information regarding the Antelope-7 appraisal well (and related tests) becomes available prior to the Meeting, InterOil will ensure that such information is available to Securityholders. The impact of the Antelope-7 appraisal well on volume assessments will differ depending on the assessor and their interpretation of the volume uncertainty on the western flank of the Antelope Field, which Antelope-7 is designed to address. The actual results of the Antelope-7 appraisal well (and related tests) could impact the Interim Resource Certification, potentially in a positive or negative manner."

And on page 33: "Antelope-7 Drilling. Under the Arrangement Agreement, InterOil is able to provide Securityholders with material information regarding the Antelope-7 appraisal well, which commenced drilling on November 2, 2016. As a result, Shareholders will have the most up-to-date information available regarding the Antelope-7 appraisal well at the time of the Meeting. 

NOTE how this is inconsistent with the above statement.  One is an "IF" statement and one is a "WILL" statement.  Which is it?  Of course proxy votes WON'T get the information until later and CAN'T act on it; it will be too late for them.  This same "IF" statement is repeated over and over four or more time throughout the MIC.  I see the same "WILL" statement only twice in the document.

Given that the prior deal was killed by the court, a CEO and BOD who care about shareholder value, would have simply said that we will wait until the results of this well are in before going forward with another deal.  But all of them, including XOM, want to get this done now.  In my opinion ALL INFORMATION on the status of A7 is material to shareholders up to the minute of the vote.  They should provide it.  In this case the deadline for those voting by proxy should be the same as that of those attending the meeting.  When drilling a well which is near the pay zone, 4 days is eternity.  It is the difference between no value and adding TCFEs of value to the company.  For yes voters the timing of this release doesn't matter so much as it will be reflected in the CRP.  Shareholders who are considering voting no and/or dissenting must be treated equally as those attending the meeting in terms of having latest available well results.  I think this point could kill the deal in court OR delay it until it is rectified.  It is fundamentally unfair to shareholders to withold this data no matter what the status is AND it is fundamentally unfair to prevent proxy vote shareholders from having the ability to base their vote on up to t he minute status o n such a pivotal activity.  Since dissent requires advance action, it is quite clear that the board have done a great disservice to shareholders by allowing such a situation to develop.  This goes back to the point of getting the well results first, then do the deal.  It may be that XOM prevented it.  Whatever the case, I think this another point to show lack of fairness.

FALSE STATEMENTS IN THE MIC:  Ths MIC says this on page A-20.

"Is Antelope-7 being drilled at the most appropriate location?   Appraisal drilling is designed to establish the limits of the reservoir, the productivity of wells and the characteristics of oil or gas. Total S.A., as the operator of the PRL 15 Joint Venture, proposed the location for the Antelope-7 appraisal well. This proposal was reviewed by each of the PRL 15 Joint Venture partners and their respective technical teams, after taking into account previous drilling tests, and was agreed upon to be the most suitable location to address the volume uncertainties on the western flank of the Antelope Field."

I pointed this out previously.  It is clear from the OSH last drilling report that NOT FINDING THE TOP OF PAY was within OSH range of expectations.  That means they were not yet at a depth where they expected to see the top of pay.  However, the IOC press release conveyed a different meaning which to me was that they had penetrated the target depth and there was NO PAY PRESENT.  These two interpretations are completely opposite.  OSH is telling us they have NOT yet gotten to the top of pay AND that the depth has yet to be reached.  IOC is saying this well is a dry hole.  These comments reveal very different views on the well that were NOT "agreed."  Did OSH relent and "support" the majority with a yes vote on the location OR were they simply outvoted?  In either case it is NOT "agreeing."  In JV discussions there is a large difference between "agreeing" and "supporting".  To me the OSH drilling report makes it clear that they did all NOT agree as the MIC states.  At most OSH "supported" the views of TOT and IOC, realizing they were outvoted.   The only other option for OSH was to not participate in the well which has values and consequences, depending on the outcome.   They are now sidetracking and I'm betting OSH has said, "I told you so."  Is this important to the case?  Yes, I think it is to the degree of establishing IOC's continual track record of underinforming, misinforming and misleading shareholders.  This is just another example.  IF Phil sues and request discovery rights, this is something he should look into.  I bet a donut I'm right.  In fact Phil, I suggest you go over this MIC with a fine tooth comb to see where else IOC is claiming that IOC, OSH and TOT "agreed."  "Support" and "agree" are words with very different meanings in JV interactions.  To use those terms incorrectly is a distortion of the facts.  Not acceptable.

The plot thickens.

Good luck to all,

Kaliboo

[Kaliboo]

Those 2 points have been vetted before: 1. The pps before the OSH made their offer was lingering in the high $20s, then when rumors started swirling it moved to $30. OSH made their initial offer of $40, then came XOM at $45 and they included paying off the debt and the termination fee with OSH. The Certification payment is part of all of that. Future payments were considered in light of timing and cossts to get there, and took into consideration the hard time to get a project financed with a very weak partner in IOC. IOC on its own has always been a negative when talking to banks on a project. 2. The 30% share in an LNG plant is vapor. There is no existing contract and a tough row to hoe to get one with IOC in the picture. IOC as a company would not be valued for what it might add to getting a contract in place. That value is with a Total/Exxon.

____________________________________________________________________________

Palm – great posts and you’re absolutely right on the two points.  People keep stating that the Total payments and the exploration assets are not in the valuation.  But they are and it’s clearly stated in the BMO opinion.  “Vapor” is a generous description of the Total plant.

Kaliboo – I am seriously impressed, certainly with your effort and willingness to communicate your thoughts, and even most of your points.  Thanks for doing what you did.

However, it seems you’re in a bind if you haven’t decided yet how to vote.  I’ll make the following thoughts to your numbered points:

1-3.  Uncompetitive market – So what?  What is the remedy?  No one is going to “deem” a competitive U.S. gas market to value assets in PNG.  No one forced IOC to explore there.  It’s like saying a raw diamond isn’t getting a fair price in the Congo because it’s not Amsterdam.  See also "Precedent Transactions"  in BMO, E-17. They took in sales over the whole region, not just PNG.

4, 6, 8 and 9.  You’re arguing potential.   Sure, anyone with exploration experience would salivate over IOC’s acreage… BUT… it’s not a financial asset.  It’s hopes and dreams.  That’s why farm-ins usually consist of work programs and success bonuses, not cash.  And BMO did say they considered it and even gave it some value:

“BMO Capital Markets notes that the Projections did not include estimated future cash flows for the Company’s exploration assets (other than PRL 15) given the challenges associated with forecasting cash flows for such early stage assets. However, for the purposes of the discounted cash flow analysis, BMO Capital Markets included the average of equity research analyst net asset value estimates available to BMO Capital Markets (which average was US$272 million) for these assets in calculating an implied per Share discounted cash flow reference range. BMO Capital Markets notes that given (i) the uncertain economics of these exploration assets, (ii) the near term funding required to maintain the Company’s interest in these exploration assets, and (iii) the market feedback provided in respect of these exploration assets from the review of strategic alternatives undertaken by the Company, the average of equity research analyst net asset value estimates available to BMO Capital Markets for these exploration assets may overstate their value. BMO Capital Markets also considered the book value of these assets.

5.  IOC should be given a higher P/E.  I know a drowning man will grasp at any straw, but really?  Anyway, the P/E given by the market was already implicit in IOC’s price when it was in the 20’s.  Since then, it has doubled.

Voting now comes down to yes, no, and no with dissent.  “No” makes little sense, particularly if both “no”’s kill the deal.

The appeal judge clearly was reluctant to interfere with a shareholder decision.  Given the blatant unfairness of the Fairness Opinion, he had to.  It’s not going to happen again.  The BMO opinion looks like a well decorated Christmas tree.  The deal will pass, the courts will approve, and the dissenters will be heard.  You just have to decide if you want to be part of that. You won’t get Exxon shares or dividends or appreciation while the dissent goes on, and you won’t get any CRP, if any, upside.  But maybe you’ll get more cash.

Palm and I have made the same decision, although I got out just before the last vote and he indicates he’s out with this one.  For my part, the market has been good since last October.  Let’s hope it continues.

Nothoil, Palm

Thanks for the well thought, nicely written comments.  Sorry this has turned into another lengthy discussion but I think adds more value to those still in.

To my surprise, you have given me new arguments.  Check it out below and tell my what you think.  You make very good arguments against my brainstorm list and that is why I haven't yet made a decision.  It is an uphill battle to get more out of this deal.  No one knows how it will turn out, other than it could take a while.  In my effort to generate this prior very long list, I realized that the volumes A6 took away may be added back somewhat by A7 since it is now drilling eastward looking for the fault.  The info released only in this MIC was that A6 results and reinterpretation of new seismic had caused them to move the fault eastward shrinkng the reservoir volume.  If they find the fault and move it back some good distance westward, then they have to add volume back volume, but how much is anyone's guess.  But they will evaluate that.  So that is a reason to NOT dissent since that is all occurring AFTER the valuation cutoff date of December 14, then that information cannot be used (at least as I read YBCA 193) for the dissetners valuation.

I agree with your "so what" comment.  But I see indications that the appeal court doesn't look at it that way but seem to embrace a sort of "social justice for the shareholders" perspective.  I sure wouldn't think that way, but I think they might; I may be wrong.  But if they don't look at it a different way, then dissenters are in trouble.  This is the legal key to unlock a judgement for much higher value.  I have my doubts that this is feasible.  The appeal court I believe voted unanimiously to kill the deal.  That doesn't seem "reluctant" to me.  I think they were merely reflecting the reluctance of the lower court to overturn 80+% of the shareholders.  I think Phil's case was a slam dunk for the appeal judges, but haven't refreshed on that reading.

Great point on the PE and about the stock price already haven risen significantly.  The MIC makes that point too.  The question as to where stock price should be is what this is all about.  That comes back to who is able to compete in a bid for the company which was my monopoly view point.  Here's my mental model of how this has turned out so far.  The lower court was more of non-intervention-let-the-stockholders-get-what-they-voted-for and let Phil et al pursue their dissent.  The appeal court was a socialist intervention mindset which decided to overrule the overwhelming majority of the shareholders and also a stick-with-the-literal-law mindset and satisfy the one claimant making the case.  It's the appeal court that gives some optimism that a better deal will be obtained for dissenters, but that means if Phil dissents and can't get what he wants in the lower court, it has to some how escalate to an appeal.  I'm no lawyer.  Again this was a brainstorm, which means not digging too far into analysis if at all.  I was a little surprised that the appeal court killed the deal until I read their judgment.  We may be surprised again, but I'm doubting it.

On the exploration assets and value - points you made are very good.  I'm talking about the "unconventional" side of this where I would hope that Phil and company could surprise us.  I've read the text from BMO you quoted and think I understand it, but it seems to be vague and alot of "arm waving" as I phrased, with no real details or facts; just that someone looked at it and here's the value.  You quoted this:

"the average of equity research analyst net asset value estimates available to BMO Capital Markets for these exploration assets may overstate their value.

This statement is a dead give away of their bias to a low side valuation.  How many estimates did they get and from who?  Who paid them?  What does "available to BMO" mean?  Isn't it equally true that they may understate their value if than can overstate it?  There is bias clear as day.  These are very important questions that shareholders SHOULD HAVE BEEN GIVEN ANSWERS TO IN THIS MIC BUT IT WAS INTENTIONALLY NOT PROVIDED.  Thanks for bringing that to my attention again.  When I drill down on it, it creates distrust and suspicion that this is a slanted assessment  favoring what the customers (IOC and XOM) want.  They know that this is one of the most important points about the valuation of the company.  They chose to state this in a way to create high uncertainty but moslty a perception that this number they pulled out of the air with no substance, is way too high.  This is where Phil and company need to have a very strong case.  But given the facts that these don't have rock solid HC volumes nailed down (like "financial assets" as you note), it is true there is a high variability in the value, but I think the UNCERTAINTY, that the value of the assets (in a competitive market) is very high can be dramatically narrowed through statistical approaches as I mentioned.  This makes valuation narrowing difficult and the need for these lessconventional approaches which may or may not be given credit (this isn't my area of expertise; so this is my best hunch from 37 years in industry).  But lets face it. Why did Phil invest in IOC in the first place?  He used available methods to begin determining potential value prior to drilling.  All I'm saying is that those approaches, along with statistical approaches using world and PNG exploration and development data, can greatly further refine the range of theexpected value of the assets, especially given IOC's superior geological interpretations, models, and exploration success.  We'll see how that turns out.  Phil can do a good job on this I think.

I agree dissent is full of hazards.  With every investment one always asks, can this money be put to better use somewhere else?  Everyone has to answer that for themselves.  For me personally, it's about making sure I look under every rock twice before I make a final decision.  I've enjoyed the learning experience which will be valuable in future activities.  As a researcher, self taught investor and oilfield veteran I can't help but to keep digging to see if there is something that might guide my decision better.   For me the needle is leaning away from dissenting now, but there are still cards that may be played in this game which is nearing its end.  I'm willing to wait a little longer to see what those cards might be.

As I am writing this I am realizing another point of argument.  You guys get  the credit/blame for this bubbling up!

The outcome of the Antelope 7 well is material to all shareholders and XOM regarding the final value of IOC.  IOC (not OSH) has a fiduciary responsibility to keep all shareholders updated continually every day until the final meeting on the progress of this well.  They aren't doing that.  IOC has their proxy sponsor calling shareholders and pressuring them (I got called) to vote NOW.  IOC has never provided timely drilling results and results they have provided have been misleading and severely lacking.  Those who will not attend the meeting have to vote 4 days ahead of the meeting; that's the deadline - Feb 10 at midnight EST.    This is what the MIC says:

Page 6-7:  "If additional material information regarding the Antelope-7 appraisal well (and related tests) becomes available prior to the Meeting, InterOil will ensure that such information is available to Securityholders. The impact of the Antelope-7 appraisal well on volume assessments will differ depending on the assessor and their interpretation of the volume uncertainty on the western flank of the Antelope Field, which Antelope-7 is designed to address. The actual results of the Antelope-7 appraisal well (and related tests) could impact the Interim Resource Certification, potentially in a positive or negative manner."

And on page 33: "Antelope-7 Drilling. Under the Arrangement Agreement, InterOil is able to provide Securityholders with material information regarding the Antelope-7 appraisal well, which commenced drilling on November 2, 2016. As a result, Shareholders will have the most up-to-date information available regarding the Antelope-7 appraisal well at the time of the Meeting. 

NOTE how this is inconsistent with the above statement.  One is an "IF" statement and one is a "WILL" statement.  Which is it?  Of course proxy votes WON'T get the information until later and CAN'T act on it; it will be too late for them.  This same "IF" statement is repeated over and over four or more time throughout the MIC.  I see the same "WILL" statement only twice in the document.

Given that the prior deal was killed by the court, a CEO and BOD who care about shareholder value, would have simply said that we will wait until the results of this well are in before going forward with another deal.  But all of them, including XOM, want to get this done now.  In my opinion ALL INFORMATION on the status of A7 is material to shareholders up to the minute of the vote.  They should provide it.  In this case the deadline for those voting by proxy should be the same as that of those attending the meeting.  When drilling a well which is near the pay zone, 4 days is eternity.  It is the difference between no value and adding TCFEs of value to the company.  For yes voters the timing of this release doesn't matter so much as it will be reflected in the CRP.  Shareholders who are considering voting no and/or dissenting must be treated equally as those attending the meeting in terms of having latest available well results.  I think this point could kill the deal in court OR delay it until it is rectified.  It is fundamentally unfair to shareholders to withold this data no matter what the status is AND it is fundamentally unfair to prevent proxy vote shareholders from having the ability to base their vote on up to t he minute status o n such a pivotal activity.  Since dissent requires advance action, it is quite clear that the board have done a great disservice to shareholders by allowing such a situation to develop.  This goes back to the point of getting the well results first, then do the deal.  It may be that XOM prevented it.  Whatever the case, I think this another point to show lack of fairness.

FALSE STATEMENTS IN THE MIC:  Ths MIC says this on page A-20.

"Is Antelope-7 being drilled at the most appropriate location?   Appraisal drilling is designed to establish the limits of the reservoir, the productivity of wells and the characteristics of oil or gas. Total S.A., as the operator of the PRL 15 Joint Venture, proposed the location for the Antelope-7 appraisal well. This proposal was reviewed by each of the PRL 15 Joint Venture partners and their respective technical teams, after taking into account previous drilling tests, and was agreed upon to be the most suitable location to address the volume uncertainties on the western flank of the Antelope Field."

I pointed this out previously.  It is clear from the OSH last drilling report that NOT FINDING THE TOP OF PAY was within OSH range of expectations.  That means they were not yet at a depth where they expected to see the top of pay.  However, the IOC press release conveyed a different meaning which to me was that they had penetrated the target depth and there was NO PAY PRESENT.  These two interpretations are completely opposite.  OSH is telling us they have NOT yet gotten to the top of pay AND that the depth has yet to be reached.  IOC is saying this well is a dry hole.  These comments reveal very different views on the well that were NOT "agreed."  Did OSH relent and "support" the majority with a yes vote on the location OR were they simply outvoted?  In either case it is NOT "agreeing."  In JV discussions there is a large difference between "agreeing" and "supporting".  To me the OSH drilling report makes it clear that they did all NOT agree as the MIC states.  At most OSH "supported" the views of TOT and IOC, realizing they were outvoted.   The only other option for OSH was to not participate in the well which has values and consequences, depending on the outcome.   They are now sidetracking and I'm betting OSH has said, "I told you so."  Is this important to the case?  Yes, I think it is to the degree of establishing IOC's continual track record of underinforming, misinforming and misleading shareholders.  This is just another example.  IF Phil sues and request discovery rights, this is something he should look into.  I bet a donut I'm right.  In fact Phil, I suggest you go over this MIC with a fine tooth comb to see where else IOC is claiming that IOC, OSH and TOT "agreed."  "Support" and "agree" are words with very different meanings in JV interactions.  To use those terms incorrectly is a distortion of the facts.  Not acceptable.

The plot thickens.

Good luck to all,

Kaliboo

MacKenzie has now been now informed that the terms of the deal are inequitable and have to be fixed.  I was told they will communicate this to IOC.  Proxy voters have a Feb  10 midnight deadline to vote, however, IOC will present information and should, on the A7 drilling status AT THE MEETING on Feb 14.  The status about this well is continually material up to the last minute prior to the vote since any information about the presence or lack of presence of a pay zone is material to all shareholders whether they will vote yes, no, no with dissent or just dissent.  We're talking about affecting the volume estimates of Antelope one way or the other.

The arrangement structure which creates two classes of shareholders voting with different cutoff times when mateiral information is continually being generated cannot be fair.  This is a NO BRAINER.  Something will have to be done to correct this inequity.  Stay tuned.

[Palm]

Interesting Northoil; speaks to what Kaliboo posted earlier. Thanks for info

This is one of reasons I'm holding the balance up until voting deadline.

[Northoil]

Interesting Northoil; speaks to what Kaliboo posted earlier. Thanks for info This is one of reasons I'm holding the balance up until voting deadline.

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I didn't understand Kaliboo's post. What's a Mackenzie?

Agree A7 is material to the valuation, but not necessarily to the process..  The CRP, which is in Exxon's offer and the BMO valuation, still covers a very large A7 upside.   As I said, I have options at $50 and $60 (hah), so I am pulling for early release of well data.  OSH should release something in early Feb, if not IOC.

[Palm]

Sorry North; When I first saw Kali's 2nd post above I thought it was yours.

Kali, what is the source of this "Mackenzie" info?

[Kaliboo]

Interesting Northoil; speaks to what Kaliboo posted earlier. Thanks for info This is one of reasons I'm holding the balance up until voting deadline.

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I didn't understand Kaliboo's post. What's a Mackenzie?

Agree A7 is material to the valuation, but not necessarily to the process..  The CRP, which is in Exxon's offer and the BMO valuation, still covers a very large A7 upside.   As I said, I have options at $50 and $60 (hah), so I am pulling for early release of well data.  OSH should release something in early Feb, if not IOC.

  See pg 10 of the MIC.  They are the proxy service.  The will be calling you if you haven't yet voted.  I got called yesterday.  They were making it real easy for me to vote while on the phone with them.  I told them I was not yet quite ready.

[Kaliboo]

Sorry North; When I first saw Kali's 2nd post above I thought it was yours. Kali, what is the source of this "Mackenzie" info?

I'm the source.  I called them and told them.  They said they will inform IOC.  Phil et al also have been informed.  Let's see what they do with this reality.  My quick decision, right or wrong, was to surface this now as opposed to it potentially surfacing later and causing worse problems for shareholders.  The MacKenzie guy said he thought the 4 day window where proxy votes have to vote early was likely due to Canadian law.  IOC is probably one of those rare situations where very material information is continually potentially available up to the minute of the vote.    A7 will increase or may decrease the volumes, but I think the potential is to increase.  They won't have it production tested, but they very well could have it drilled and logged and possibly have formation fluid samples.  If there is a clear indication of a pay zone, then that info is vastly different than a dry hole, wouldn't you think?  They said the well could add over a TCFE to the numbers.  That's why I say it is material up until the last minute of voting.  It is well within the realm of possibility, as far as shareholders know, that the well could reveal this during the 4 day window or earlier.  Unless they run into more "problems" or "slow down the progress."

So if you are dissenting and the valuation cut off date is December 14, then I think you have to exclude A7 in determining value of the company.  But I'm no lawyer and don't understand how that works.  But if A7 e.g., hits a 200+ m gas column in the sidetrack, then that derisks the CRP some more, adding back volumes, and the deal looks better.  All shareholders should have this status and info available to them up to the minute of the vote, IMHO.  I presume all parties - IOC and XOM - want to get this thing done ASAP.  MH wants his money; XOM wants to move on.  You can argue about what value can shareholders extract from having that info.  The point is the volume could be impacted significantly, and that's all that matters.

[Northoil]

[quote='Palm' pid='79203' dateline='1485553048'] Sorry North; When I first saw Kali's 2nd post above I thought it was yours. Kali, what is the source of this "Mackenzie" info?

I'm the source.  I called them and told them.  They said they will inform IOC.  Phil et al also have been informed.  Let's see what they do with this reality.  My quick decision, right or wrong, was to surface this now as opposed to it potentially surfacing later and causing worse problems for shareholders.  The MacKenzie guy said he thought the 4 day window where proxy votes have to vote early was likely due to Canadian law.  IOC is probably one of those rare situations where very material information is continually potentially available up to the minute of the vote.    A7 will increase or may decrease the volumes, but I think the potential is to increase.  They won't have it production tested, but they very well could have it drilled and logged and possibly have formation fluid samples.  If there is a clear indication of a pay zone, then that info is vastly different than a dry hole, wouldn't you think?  They said the well could add over a TCFE to the numbers.  That's why I say it is material up until the last minute of voting.  It is well within the realm of possibility, as far as shareholders know, that the well could reveal this during the 4 day window or earlier.  Unless they run into more "problems" or "slow down the progress."

So if you are dissenting and the valuation cut off date is December 14, then I think you have to exclude A7 in determining value of the company.  But I'm no lawyer and don't understand how that works.  But if A7 e.g., hits a 200+ m gas column in the sidetrack, then that derisks the CRP some more, adding back volumes, and the deal looks better.  All shareholders should have this status and info available to them up to the minute of the vote, IMHO.  I presume all parties - IOC and XOM - want to get this thing done ASAP.  MH wants his money; XOM wants to move on.  You can argue about what value can shareholders extract from having that info.  The point is the volume could be impacted significantly, and that's all that matters.

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OK – now I understand.  This is no bolt of new information.  You called them and basically, complained.  My guess is that nothing’s changed.  I’d guess proxy services get all sorts of complaints from unhappy shareholders, particularly in this case.  On the last vote, I talked at length with one guy.  He asked permission to use my comments and they even called me back.  So they do listen, and they do pass on comments.  What happens at the other end is another story.  I don’t think anything different will happen because:

1.  IOC and Exxon know all about A7.  They recognize the timing vs. the vote.  What you’re telling them is nothing new.  I’d also expect we will get some information on A7 before Feb 10, because it is an important piece of data.  It’s important NOT because it changes anything (see below), but because they need to have a record of completeness of information to the shareholders.    Of course if the sidetrack doesn’t get down in time, everything is moot.

2.  I just don’t think it’s as big a deal as you make it out to be.  Yes, more pay is good, but any change in resources is more than adequately covered by the CRP.  So what if A7 adds another TCF?  So you get another $7/share under the CRP.  It doesn’t change the Exxon offer, which explicitly includes and accounts for good news at A7.  If anything, the offer would then look even more “fair”.

[Palm]

Exactly Northoil, I agree