InterOil Corp. (IOC/$62.88/Outperform) sells downstream assets at a healthy price. InterOil’s new management team has signaled over the past year that the sale of non-core (downstream) assets – the refinery and fuel station network – is under consideration. Today the company announced that these assets are, in fact, being sold. The buyer is privately held Puma Energy. The sale price of $526 million is attractive, in our view – it’s above our $467 million DCF estimate for the downstream segment. We think the stock will trade up modestly on this news, but to be clear, refining and fuel distribution have long been regarded as an appendage to the InterOil story – definitely not something that’s central to how investors think about the company. The market continues to be focused on the ongoing exploration program, with three wells having been drilling since March.
