06-30-2013, 11:00 PM
Everyone wants to know the answer to when for the news and how much .
Well based on persons comments who attended the Annual Shareholders Meeting this is what we know.
Odds of a Joint Announcement week after July 4th- 10% based a lawyers comments at the AGM, Odds of an announcement within the 60
day window from May 24th to July 24th mentioned by PNG's Prime Minister O'Neil -60% , odds of an announcement based on some type
legal delay -30%
When will the stock price move ?Might take a closed deal which would be best guess 30 days after the announcement.
What will the price targets be.?Per the CFO Collin Visagio they will be $250 range. Per Wayne Andrews wait 5 years and IOC will be a
$400 stock.
How will IOC get the message out?
Stock coverage with targets will be resumed by the 3 Investment Bankers
Morgan Stanley-US coverage
UBS-European coverage
Macquarie-Asia coverage
New Coverage
Goldman Sachs
Updated coverage
Raymond James
Westlake Securities.
The deal with Exxon will be binding and IOC and Exxon have already agree on the terms. Money talk is in the $5 Billion dollar range for
40% of the assets.Current market value of IOC is in the $3.2 Billion dollar range. The real money is not this sell down cash but the ongoing
perpetual income . Interoil will participate in the LNG sales. Interoil costs to date are 5 centsper metric cubic foot and the stock sells at 60
cents today per and each metric cubic foot of NG can be sold as LNG for $15 range.LNG costs are in the $3 range per mcf. The
condensates are in addition to this. IOC has found 136 million barrels of condensates so far per the experts. They own a refinery which
currently buys condensates from others and the resells them. Condensates today sell for $90 plus per barrel cost and $10 a barrel to
process and the balance is IOC profit. The refinery can process 38,000 barrels a day and
operates over 250 days per year. The profit to Interoil per year is in excess of $500 million per year.
Interoil is also proceeding with plans to develop a second LNG project at Gulf Province.More details later.
Remember the following companies were reported to have bid on Interoil's assets. Shell, Total, Chevron, and the governments of Japan
and Korea. We expect after the Exxon announcement and before the closing for some of those companies to return to Interoil with bids for
the entire company. Total-The National Oil Co of France has teamed with OIl Search and bought all the leases around Interoil and we
expect a bid from them. Exxon will then be forced to try to buy all of Interoil also. The Exxon bid alone values Interoil at $250 a
share.The entire company would sell for more. Ideally Interoil would close this Exxon deal and drill more but will they get the chance??If not
we could end up owning Exxon stock in our accounts vs IOC stock.
Why is the current price per share weak???
Mr Market hates uncertainty and the Exxon completion dates and prices paid are unknown to the market.Some on the island are trying to
stop this Exxon deal that being OIl Search who wants to use its own possible NG . But Exxon prefers the certainty of the found NG at Elk
Antelope. Remove the uncertainty and the stock price rises.
We wait for news.
