By pickboone.1 hour 36 minutes ago.Permalink
I spoke to the smartest hedge fund manager I know today. He's been involved in IOC for many years, he's done more due diligence than anyone I know, and he has even sent one of his analysts down to PNG for almost 2 weeks to check everything out. He has maximum conviction right now and believes the stock will move up towards $130 in the days following NEC approval, as investors will begin to anticipate not only a deal on Elk/Antelope soon thereafter but also they will begin to ascribe much more value to Triceratops/Bwata since necessary regulatory approvals for liquids production could be fast tracked and new LNG trains could simply be tacked onto the Gulf facility. He believes that investors don't understand the implications of the significant liquids column in T2, and he thinks that the liquids flow rates in the center of the structure (i.e. T3) will be off the charts. He looks for ideas where the opposite side of his thesis seems obvious to those who don't do the work (i.e. high P/E, high cash burn, $4 billion market cap), and he has been stellar in getting things right through unparalleled due diligence. One of his big themes is that nobody appreciates how significant the scramble for long-term LNG supply will be now that Japan has decided to phase out nuclear, and he thinks there's still too much uncertainty in developing the gas fields in east Africa for this to be a supply threat just yet. He also believes that Australian coal bed methane has become much too expensive and the regulatory uncertainty in Australia will halt new capital commitments. He thinks that InterOil's exploration assets could contain many reefs and that it will likely be monetized much sooner than people think through farm-ins or further PRL sell downs now that the regulatory environment in PNG has become much more benign. I didn't ask him for an ultimate price target on InterOil, but he said it's the best idea he's ever had. This is very meaningful to me. it's just one man's opinion, and I suggest that everyone do their own due diligence.
