'Palm' pid='51432' datel Wrote:
'mikesioc' pid='51429' datel Wrote:If Hession believes PRL 15 is the mother load he pulled the trigger way too soon. There was no need for the SPA to include more than enough for 2 trains or 7T. If Total is going to owe another $2 billion for 40% of one lease unless they are fools there is no way they do that rather than buy the entire company. Furthermore being outflanked by OSH and Exxon effectively takes them out of the bidding and perhaps gives Exxon their expansion gas with zero compensation to IOC. Let's see how arbitration plays out. PNG has telegraphed the end of their patience. Don't count on much help from OSH on the development plan. Remember who PNG is married to. What other "political coercion" remains? IMO Chandler will exert his influence soon without a dramatic reversal of fortune. The drilling campaign speaks for itself. The stock performance speaks for itself. IOC is destined to be sold by the end of 2015. Could it be that people recognize that and are therefore buying or holding? Does it always have to be they expect $300-$400 per share in 8 years? The former seems far more plausible and if it doesn't happen everyone will have to reconsider the investment and their expectations. Starting with Chandler. If the prospect of a buyout at a handsome profit that is less than your 8 year best case valuation makes you whine then life must be one big disappointment. There is no Santa Clause by the way.
Mike, once again you spout off with little or no support for what you say.
1. Hession had to "pull the trigger" as Duma/DPE had given IOC a Dec 31, 2013 deadline to get a deal done. Did you want him to wait until Dec 31, and would he have suddenly gotten at deal 2x as good as the deal on Dec 6th? Don't think so.
2. Under PNG O&G Act IOC would not be able to take part of PRL 15 and do a deal. The development has to be for the whole PRL license and the government likely would have said "A partial deal is not enough". The government has stated in the past that projects must be intergrated.
3. You've been saying that IOC is going to be bought out in November of this year; now you're saying by the end of 2015. Why the drastic change?
4. I've asked you several times to explain how, under the terms of the SPA, IOC "gave away all of the upside" in PRL 15. You've yet to do that.
You like to rant and play Monday morning QB, but offer little or no substance to what you say. Pretty noisy and worthy only of being ignored with most of what you say.
Palm, I don't have your encyclopedic knowledge and recall of the O&G Act or any SPA, but 35 years of teaching, training, and consulting on business negotiations leads me to a similar conclusion regarding Mike's post. I feel as I am back in the classroom, going over some fundamentals.
Making judgments about IOC's deal with Total or might-have-been deal with XOM is simply silly. We don't really know what any of the parties were offering. We don't know what inputs IOC had from major shareholders or from the PNG government, or if any of them were speaking with one voice. Some posters write as though they think a negotiation is a static process, or a yes-no binary process. Reality is, IOC and Total did a deal based on what they felt their alternatives were at that time. And their evaluations of alternatives likely depended on their beliefs about the future, which is anyone's guess. The particular contingency arrangement in the deal struck seems to me to likely be a compromise between positions which both parties could accept.......and a deal which could be sold as viable to the government and to major shareholders. But WE WILL NEVER KNOW what the trade-offs really were.
A reality which people have to grasp about ALL of this is that WE WILL NEVER KNOW. We will never know the real goals and positions of any of the parties at the out set, we will never know what was actually proposed, we will never know the pressures felt by anyone, we will never know how the final outcome was arrived at, and one should get the idea that WE WILL NEVER KNOW and that any critique of IOC's negotiations remains entirely an exercise in speculation.
katytrader
