Boston conference comments today

[jft310]

Try to not duplicate NYC comments posted earlier

expectations for price per mcf were high and should have been reset

 might do delineation wells for certification together vs sequentially which would move up recertification

total in their Pressers stated need for another partner

lots of calls from those interested in being a partner

IOC has veto power over the new partner

can't say when but when the right terms are available they will move forward

IPI is final and done terms to be revealed soon not an issue was a contract

iOC had a list of 13 things they wanted and left with all 13 completed

total really wanted this deal

i find that very encouraging from the worlds second largest LNG partner

total has lots of cash over $20 Billion and pays over 5 percent dividend

one of the attendees left the room said IOC is a smoking buy hold stock like he's never seen

lets see looking back no partner, only 1 rig being used, low on cash, stranded NG , uneven govt relations

today looking forward 4 rigs lined up looking for another two for next year drilling

comfortable cash position

NG has an LNG plant to monetize the gas with 30 percent ownership

govt loves a second super major for PNG

sweet

[sfiaes]

" a smoking buy hold stock ..."

Wha?

Is that kinda like brake torquing your car?

[jft310]

Maybe so if that works for you

[Spartina]

Thanks JFT.

[mikesioc]

Try to not duplicate NYC comments posted earlier

expectations for price per mcf were high and should have been reset

 might do delineation wells for certification together vs sequentially which would move up recertification

total in their Pressers stated need for another partner

lots of calls from those interested in being a partner

IOC has veto power over the new partner

can't say when but when the right terms are available they will move forward

IPI is final and done terms to be revealed soon not an issue was a contract

iOC had a list of 13 things they wanted and left with all 13 completed

total really wanted this deal

i find that very encouraging from the worlds second largest LNG partner

total has lots of cash over $20 Billion and pays over 5 percent dividend

one of the attendees left the room said IOC is a smoking buy hold stock like he's never seen

lets see looking back no partner, only 1 rig being used, low on cash, stranded NG , uneven govt relations

today looking forward 4 rigs lined up looking for another two for next year drilling

comfortable cash position

NG has an LNG plant to monetize the gas with 30 percent ownership

govt loves a second super major for PNG

sweet

Thanks for the update.  Let's hope everyone has learned their lesson on over-hyped expectations.  Concurrent delineation wells is common sense, why would there be any indecision?  Was the attendee saying a smoking buy and hold for 2 years, 7 years, longer?  Is reference to Total's cash position implying they can use cash to buy IOC?  Any mention of a stock split or dividend?

[j4j]

Try to not duplicate NYC comments posted earlier

expectations for price per mcf were high and should have been reset

 might do delineation wells for certification together vs sequentially which would move up recertification

total in their Pressers stated need for another partner

lots of calls from those interested in being a partner

IOC has veto power over the new partner

can't say when but when the right terms are available they will move forward

IPI is final and done terms to be revealed soon not an issue was a contract

iOC had a list of 13 things they wanted and left with all 13 completed

total really wanted this deal

i find that very encouraging from the worlds second largest LNG partner

total has lots of cash over $20 Billion and pays over 5 percent dividend

one of the attendees left the room said IOC is a smoking buy hold stock like he's never seen

lets see looking back no partner, only 1 rig being used, low on cash, stranded NG , uneven govt relations

today looking forward 4 rigs lined up looking for another two for next year drilling

comfortable cash position

NG has an LNG plant to monetize the gas with 30 percent ownership

govt loves a second super major for PNG

sweet

Thanks for the update.  Let's hope everyone has learned their lesson on over-hyped expectations.  Concurrent delineation wells is common sense, why would there be any indecision?  Was the attendee saying a smoking buy and hold for 2 years, 7 years, longer?  Is reference to Total's cash position implying they can use cash to buy IOC?  Any mention of a stock split or dividend?

i understand a level of disappointment that the price per mcf was less than $1.00-1.25, the winner wasn't Exxon, and fid is later than hoped, but what I still cannot understand is the market's seeming unwillingness to do simple math in valuing the company in the mid-50's a full week after announcement given the amount of cash likely to come in over the next 24 months.   The market has to believe that the reserve estimates will come in dramatically lower than the GLJ and gaffney cline (adjusted for the new antelope well) estimates just because total posted calculations in its press release based on 5.4 tcfe.  There is some art to these calculations but not this much.

[mikesioc]

Try to not duplicate NYC comments posted earlier

expectations for price per mcf were high and should have been reset

 might do delineation wells for certification together vs sequentially which would move up recertification

total in their Pressers stated need for another partner

lots of calls from those interested in being a partner

IOC has veto power over the new partner

can't say when but when the right terms are available they will move forward

IPI is final and done terms to be revealed soon not an issue was a contract

iOC had a list of 13 things they wanted and left with all 13 completed

total really wanted this deal

i find that very encouraging from the worlds second largest LNG partner

total has lots of cash over $20 Billion and pays over 5 percent dividend

one of the attendees left the room said IOC is a smoking buy hold stock like he's never seen

lets see looking back no partner, only 1 rig being used, low on cash, stranded NG , uneven govt relations

today looking forward 4 rigs lined up looking for another two for next year drilling

comfortable cash position

NG has an LNG plant to monetize the gas with 30 percent ownership

govt loves a second super major for PNG

sweet

Thanks for the update.  Let's hope everyone has learned their lesson on over-hyped expectations.  Concurrent delineation wells is common sense, why would there be any indecision?  Was the attendee saying a smoking buy and hold for 2 years, 7 years, longer?  Is reference to Total's cash position implying they can use cash to buy IOC?  Any mention of a stock split or dividend?

i understand a level of disappointment that the price per mcf was less than $1.00-1.25, the winner wasn't Exxon, and fid is later than hoped, but what I still cannot understand is the market's seeming unwillingness to do simple math in valuing the company in the mid-50's a full week after announcement given the amount of cash likely to come in over the next 24 months.   The market has to believe that the reserve estimates will come in dramatically lower than the GLJ and gaffney cline (adjusted for the new antelope well) estimates just because total posted calculations in its press release based on 5.4 tcfe.  There is some art to these calculations but not this much.

The market believes what Total is saying as the range no matter how conservative and there is a defined price.  So, it is what it is until proven otherwise which is 18-24 months away then FID in 2016, hopefully.  We need 9.89T's for $4.1 billion which is where the stock was trading prior to the announcement at $86.  If we get FID and FEED in 2016 then we wait until 2020.

[Thylacine-2]

Lot's of action coming up in 2014!  Four to six rigs working.  My yard man, Narcisso, says we will have several big discoveries. :-)   And we could speed up certifcation by drilling more than one certification well at a time.  Both Total and IOC want to get to FID as soon as possible.  The development of the LNG project might be sooner than the conservative dates given so far indicate.  The partners are not limited by the PSA or statements in news releases in doing things differently by mutual agreement.

[ltinvest]

Mike, I don't agree with your timelines and many important details are being left out. First, 4 to 6 rigs are scheduled to start drilling in the coming months. Now, there is potential of appraisal wells being drilled concurrently as opposed to consecutively. I'm trying to clarify the drilling program but there will be SIGNIFICANT drilling taking place over the next 12 months. Both inside and outside PRL 15. We will know a great deal more in 6 to 12 months. A multi billion dollar interim resource payment will be paid in 15- 18 months. FID is 24 months away and the LNG plant capacity will be clear. This does not include CSP details, farm-ins or rewards for additional discovery inside PRL 15 but outside E/A.

For the first time in Interoil history, we can drill, drill, drill the way many of us have wanted to see for years. And we have a clear path to monetization and production of all the resource we discover and certify.

2015 is going to be exciting.

[admin]

Mike, I don't agree with your timelines and many important details are being left out. First, 4 to 6 rigs are scheduled to start drilling in the coming months. Now, there is potential of appraisal wells being drilled concurrently as opposed to consecutively. I'm trying to clarify the drilling program but there will be SIGNIFICANT drilling taking place over the next 12 months. Both inside and outside PRL 15. We will know a great deal more in 6 to 12 months. A multi billion dollar interim resource payment will be paid in 15- 18 months. FID is 24 months away and the LNG plant capacity will be clear. This does not include CSP details, farm-ins or rewards for additional discovery inside PRL 15 but outside E/A. For the first time in Interoil history, we can drill, drill, drill the way many of us have wanted to see for years. And we have a clear path to monetization and production of all the resource we discover and certify. 2015 is going to be exciting.

Apart from that, what is actually the downside if the worst possible EA certification has already priced in?

• Certification is on the basis of P50 numbers, averaging two reports
• The GCA P50 number is 6.6Tcfe, but this excludes Ant3, which provided more certainty about resource continuity and provided stellar results
• Much of IOC has been derisked from an economic and political perspective
• A clock has been set toward Fid and gas monetization
• A dramatically accelerated exploration program will commence soon in an area with known whales.

It seems to me that most of the risks are priced in. Some (EA certification risk) seem more than priced in. But there are plenty of potential rewards. One could say that at $90, it was fully valued, but come Q1 and those drill bits turning, this could be a different matter altogether.