Where's the Beef??

[jft310]

The value of any deal with say Exxon for example has three valuation components

One the price per mcf and whatever prepaids IOC can add to that stated mcf price

Two the more valuable part is the condensates because iOC owns a refinery.IOC type condensates sell within $5 of WTI

Third per the company IOC a deal will include LNG participation .Thats income for 25-30 years off the LNG production that's way more valuable than the price per mcf

Invest accordingly.

[smeltman]

Just to add a key 4th valuation item, the true value of the deal will be realized with a clear and detailed explanation from both XOM and IOC management when it is announced.

(A side PSA for those on this board who would be categorized as "Millenials" or "Generation Y's", JFT's thread title refers to a Wendy's ad campaign from 1984 featuring Clara Peller , on the right, complaining about the disproportionate bun sizes versus beef patties.)

[Palm]

And the 5th is the time value of money. Tick, tick, tick

[cybersssss]

My speculation:
The deal will likely not be announced as a per/mcf deal. It will be some times of a partnership like arrangement for prl 15 or for 4.6 tcf of prl 15. They will say there will be x amount of money upfront and staged payments of x based on certain time points. Then there will be the percentage ownership of the third train of png lng and the percentage of ownership of the condensate facilities.

Furthermore, there will be a question of future partnership for the rest of prl 15 and/or further exploration.

We and the analysts can then figure our the value of the deal and where that values InterOil based on those numbers. This valuation can include the time value of money.