Friday Rant

[Michael]

I don't post often, but I am weary of IOC as an Investor.  Don't distain to calling me a basher. I have been invested longer than many and larger than most. Don't just tell me to sell my stock if I am not happy. The question is why we have been in the dark for so many years.For years we assumed IOC silently and stoically accepted torment by corrupt government officials. Is that true? Great for conspiracy but the same players are on the stage.  For a while, our ignorance was excused by "confidentiality agreements". Now exclusive negotiations have lapsed and what do we really know? Nothing.  The posters on this board are top notch and instrumental in why I stay invested. Yet in 10 months we are still totally in the dark. Hell we don't even know why the CEO left or was let go.We all feel that the company is dramatically undervalued. Why doesn't every other retail or wholesale investor.  Perhaps the "big boys" know more. It's about time we knew at least as much.

Michael

[Movieguy]

Thanks for posting that Michael, and risking the possible backlash. I agree with your sentiments, and I am about to propose an idea that risks even greater backlash.

We have been misled for years/months/weeks (take your pick) by IOC management in terms of how near a game-changing deal was to being announced. The misleading likely was not intentional, but it has in fact occurred. If a "Great Deal" is announced Monday (or very soon), all will be forgiven, but until that announcement comes, we are nowhere.

What seems to be agreed upon is that IOC has a great resource(s). So what we all want is the value of that resource translated into a large rise in the share price. How can that happen? Well the obvious way is for the Great Deal, but that never comes. So . . . is there another way? We all seem to believe that the numbers being bandied about by the various bidders for the various objectives (4.6ts, all of E/A, all of PRL 15, all of IOC) would value IOC dramatically higher than it is now. So what we need is for one or more of these numbers to be made public.

We are constantly told that these numbers cannot be announced publicly due to confidentiality agreements, etc., but I am suggesting that numbers could be announced if IOC decides it really wants them to be. I am not saying that IOC should break an agreement, or find some technical loophole so they can announce something, or have the numbers leaked. I am saying that getting the info out is a matter of WILL. If IOC wants it out there they can work to find ways to get it out there. They granted exclusivity to XOM and then they withdrew it. They had the bidders sign CAs, they showed them what they wanted to in the data room, and they've probably insisted on lots of other things within these various negotiations that we don't even know about. I'm not suggesting IOC is all-powerful, but I don't think they are as helpless as they often lead us to believe (at least I hope not!). The easiest of these numbers, and the one most certain to affect share price would be a bid for the whole company.

(DISCLAIMER: To those living in the alternate universe where IOC, at this time, has a value well above $280, I suggest you cease reading, as you are likely to be angered. My only suggestion is that you understand value comes largely from what is known, not from optimistic (though perhaps very accurate) projections of the future. Most of IOC's value TODAY has to come from IOC's assets TODAY, not from what it may be able to develop in the future. And really, $280 versus the $70 the stock closed at today, a 300% profit, and you're not happy?!!)

If IOC management wants a bid on the company made public, I think they could maneuver to make it happen. For instance, when one of those informal offers comes up in conversation, rather than dismiss it, they could say, "Give us a formal offer, and we'll try to work with you," or something like that. I do not pretend to understand the inner workings and nuances of these conversations/negotiations, but I do believe that if IOC truly wants to get at least one or some of the bid prices made public, they could find ways to do so.

So do they want a buyout bid, probably one that falls well short of what would make IOC management happy, made public? I think in the past the answer was definitely NO, and that is why one never was made public. But the times they are a changin'. Many sources are saying that large shareholders have become very unhappy and are increasingly losing patience. They seem to be demanding that an announcement has to come very soon, or else pursue a buyout. IOC, perhaps reluctantly, may have to allow bid prices to go public. This is my great hope, and I believe our best chance for rapid price appreciation. If the information we have been led to believe on the value of the resource(s) has been accurate, we get an immediate large rise in the share price and end up with an eventual buyout well north of $200 (regardless of where the bidding starts). That will make most of us a lot happier and all of us a lot wealthier. Would that be so bad?

[jft310]

The large shareholders(some of the largest) I talk to are quite happy with Dr Mike and what he's doing. We have a professional LNG person let him do his job. It's way bigger than a 3rd train . Phil and Byker didn't have the skill set for a project like this FACT. The BOD was smart enough to hire Dr Mike now stop complaining and let him do what he did at Woodside.

[Tree]

I refer all to this month old report.  Confirmation of points within since publication. Sit back, watch some football, don't borrow touble, identify reality and let this play out.  Our's is not a case of :

http://www.youtube.com/watch?v=VKcAYMb5uk4

Frustration, impatience, fear of the unknown do not make it so.  We are all victims of OUR OWN investment decisions.

**********

Shell joins battle for InterOil's gas output

By RUSSELL SEARANCKE Wellington

 23 August 2013 00:00 GMT

The InterOil-ExxonMobil episode in Papua New Guinea has taken a new twist, with at least one other liquefied natural gas major again vying for InterOil’s gas resources.

The recent lapse of the exclusivity clause in the ExxonMobil talks has enabled InterOil to be open to other offers, and well-placed sources said Shell has submitted a new offer, and possibly another party also.

It could not be confirmed if Shell’s new offer is in direct competition with ExxonMobil’s, or is a separate play for other InterOil resources.

InterOil confirmed the ExxonMobil talks are continuing, though a spokesperson refused to be drawn on the Shell offer, saying only that the company would not be making public comments about any of its negotiations.

A Shell spokesperson did not confirm or deny a move in PNG, saying: “Shell continuously reviews our global upstream portfolio in line with our strategic approach to capital allocation.

“In light of our strategy, we may talk with third parties from time to time. Any conversations are confidential.”

Well-placed sources confirmed that third parties are free to make new offers to InterOil, given the expiry of the exclusivity clause.

ExxonMobil’s requirements are well documented, and major terms have already been agreed with InterOil for ExxonMobil to buy 4.6 trillion cubic feet of gas from the Elk-Antelope field to be used as feedstock for another train at ExxonMobil’s PNG LNG project. Sources said Exxon­Mobil is keen to close the deal as soon as possible, given the end of the exclusivity period and InterOil being receptive to other offers.

Shell’s motivations are also LNG driven, with the company said to be keen on operating either a new floating LNG project in PNG or an onshore scheme in Western Province near the Elk-Antelope fields.

InterOil said earlier this month that it wants to be a non-operating owner of an LNG project through the monetisation of its remaining resources at Elk-Antelope and the Triceratops discovery.

Shell has the backing of PNG Petroleum & Energy Minister William Duma who, according to local media reports, is concerned about ExxonMobil having a monopoly.

It was also reported that leaders in Western Province are being urged to pressure InterOil into processing Elk-Antelope gas in their province and not in Port Moresby at ExxonMobil’s LNG site.

Sources said this intriguing saga could take another turn if ExxonMobil closes a deal with InterOil in which case Shell could contemplate a takeover of the Canadian producer.

If ExxonMobil is successful, it looks more likely that Elk-Antelope will underpin the third train at PNG LNG following revelations by project co-owner Oil Search that resources such as P’nyang and Juha North and the Hides expansion are still two years away from being ready for a final investment decision.

“We await with interest the outcome of discussions between ExxonMobil and InterOil regarding the potential purchase by ExxonMobil of an interest in the Elk and Antelope fields in PRL 15,” said Oil Search managing director Peter Botten.

“Depending on the terms of the ExxonMobil deal, these discussions may potentially provide Oil Search with the opportunity to participate in the development of a further LNG train in PNG.”