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1) Makes the String of Pearls theory stronger
2)Helps validate Interoil's search techniques
3) Raises the odds of the idea of excess gas being sold to Exxon
4) Increases the odds we get a buyout offer next summer . Nothing sold fire sale either.
5) The Antelope drilling results before the Total payment is a window into which an offer to buy could come about . Take the T count determines the received price per mcf and that T county determines the plant size and thus the cash flow and thus the stock price target . So say an 8-10 percent discount rate per years on that price target and one gets a takeout price . At what price would the scales tip is the question!!!? Or let the bidding begin next summer is my take . Low offer walk away , a strong offer lets talk. Odds still low but each new discovery the odds increase .
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I wonder if we should start to question whether the "string of pearls" theory is valid, considering now if it might in fact not be a string but a sweater or a vest. Sure, we're getting ahead of ourselves, but then again perhaps not.
Any sellout offer IMHO, to be valid, must contain in addition to cash a substantial equity percentage in the offering corporation. I don't know how that might be done unless IOC remained independent and sold off parts of its licenses for equity.
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'ArtM72' pid='51758' datel Wrote:I wonder if we should start to question whether the "string of pearls" theory is valid, considering now if it might in fact not be a string but a sweater or a vest. Sure, we're getting ahead of ourselves, but then again perhaps not. Any sellout offer IMHO, to be valid, must contain in addition to cash a substantial equity percentage in the offering corporation. I don't know how that might be done unless IOC remained independent and sold off parts of its licenses for equity.
Art - Easy. Many deals include the shareholders getting stock in the acquiring company. Would be more interesting if it was Oilsearch stock than Total's, as the Interoil piece would be a large part of the corporate upside. It could happen, XOM could fund part.
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11-09-2014, 12:11 AM
(This post was last modified: 11-09-2014, 12:12 AM by ArtM72.)
Dave -
You are right, I'm getting a little too excited once again. The skies are clearing and I think I'm seeing stars. :-\
I've of course thought about OSH but OSH doesn't have the mountain of cash I'm dreaming would be necessary to make the deal legit.
Conceptually, should the string theory pan out, partners would buy in with deal structures for new units not unlike what Hession put together with Total. (Can't believe I just said something nice about Hession) The new advantage to this sort of arrangement is IOC wouldn't be forced into any deal like they were with Total as the resource would be significantly derisked and the deals wouldn't be done with as many government time and partner constraints.
Damn sure would be nice if Hession at least said there were sea shells in them tailings. So much new information. So little disclosure.
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Looks like the Coral Sea or Bay of Papua extended years ago over much of Interoil's basin. Shale extends from Triceratops to Wahoo we now know so our ancient sea shore was capped and then cooked over millions of years . The market may finally understand what Phil and Dave Holland guessed and is now being proved out . I will never forget the Interoil slide with over 40 gas and oil seeps identified . Those seeps now refined into 40 prospects to be drilled over the next 10 years or so . Bright lights ahead ...
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Ken,
While I agree with you stated conclusions, I have also come to realize that we will not see full value of IOC's gas discoveries until we have a means of moving these resources off of the island. Our situation reminds me of the Oceans 11 movie where they discuss breaking into the vault which has $150 million dollars and the guy says, how do we get the money out after we break into the vault. Well, we are now in the vault and MH is trying to get the money out. To get the money out will require the November 15 development plan submittal.
I think the OSH arbritration is an attempt to push IOC back into a timing issue with the development plan submittal and I am getting more and more concerned about this submittal. If they suceed, OSH could get IOCs gas at firesale prices. The key question for the group is, what happens after the arbitration ruling in March? If OSH wins, will we receive the real value for our gas? Can we simply rebid the partnership and require more upfront money that OSH cannot afford to pay or will we simply award to OSH. I don't think we have time to rebid with anyone other than Total. If OSH takes over for Total will IOC receive a development plan that is good for IOC shareholders?
So in summary, while the Raptor discovery is great news, I don't expect any big moves in the PPS until the arbitration is behind us and we have clarity on the development plan forward. I have sold my call options until such time. After the arbitration ruling, I fully expect IOCs stock price to increase dramatically. This is from a simple engineer that knows nothing of the legal system.
Still believing in the resource and hoping the arbitration goes well. Good luck longs.
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'ArtM72' pid='51766' datel Wrote:Dave - You are right, I'm getting a little too excited once again. The skies are clearing and I think I'm seeing stars. :-\ I've of course thought about OSH but OSH doesn't have the mountain of cash I'm dreaming would be necessary to make the deal legit. Conceptually, should the string theory pan out, partners would buy in with deal structures for new units not unlike what Hession put together with Total. (Can't believe I just said something nice about Hession) The new advantage to this sort of arrangement is IOC wouldn't be forced into any deal like they were with Total as the resource would be significantly derisked and the deals wouldn't be done with as many government time and partner constraints. Damn sure would be nice if Hession at least said there were sea shells in them tailings. So much new information. So little disclosure.
Art, it looks to me like IOC's present disclosure policy is designed to dampen Beta, making IOC more attractive to institutional investors, and giving shorts less to work with.
Most of the investors in IOC, institutional and private, don't understand the technical details of the oil and gas business. That is the case even on this board, with the fine resource people who post here.....petroleum engineers and others who are experienced in the oil and gas business. An example of that lack of technical understanding is that some members of the board are still convinced, despite mountains of argument proving otherwise, that it would be possible and desirable for Antelope Deep to be in pressure communication with Antelope.
I loved the old disclosure policies, having well logs and all, with our own resident Petroleum Engineer to help us work through them. It was immensely interesting to have that detail of technical information about IOC. But that kind of information did not, in my opinion, contribute to a stable SP. It may even have encouraged argument and controversy.
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Will and Thy we need certainty of some of the events for stock stability . Interoil win or not .
Antelope Deep communicate or not . Etc..Etc..
There are many things we don't know , including geology and OSH intention etc and thus black and white statements about future events have huge risk because of this lack of knowledge.
Again we must wait .
But the assets prospects for monetization have risen with the new drilling .
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'ArtM72' pid='51766' dateline='<a href="tel:1415455 Wrote:Dave - You are right, I'm getting a little too excited once again. The skies are clearing and I think I'm seeing stars. :-\ I've of course thought about OSH but OSH doesn't have the mountain of cash I'm dreaming would be necessary to make the deal legit. Conceptually, should the string theory pan out, partners would buy in with deal structures for new units not unlike what Hession put together with Total. (Can't believe I just said something nice about Hession) The new advantage to this sort of arrangement is IOC wouldn't be forced into any deal like they were with Total as the resource would be significantly derisked and the deals wouldn't be done with as many government time and partner constraints. Damn sure would be nice if Hession at least said there were sea shells in them tailings. So much new information. So little disclosure.
A buyout now would IMHO be very smart....for the buyer. I think shareholders would be seriously short changed. With a continuous multi rig program for the indefinite future, valuation could be on the verge of making significant sustained step increases. The raptor discovery provides more statistics to support the model. Of course we still lack a lot of info but the leading indicators are positive.
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