Arbitration decision nuetral

[calvin grad]

I have been concerned about an unfavorable outcome on the dispute  with OSH. I did not believe that IOC would receive fair value without a new facility. How can Bernstein say it is neutral.? They must believe that a facility will be built either way. Total based on the deal for EA were willing to put up big money if 8 to 10 T were proved. Since it seems there are more condensates at Raptor, as many as 3 or 4 times as many, Raptor should be more attractive. We don't need 10  T because if OSH prevails, IOC can choose to do what it wants with their share of the resource at EA. Who thought EA could be a tieback to Raptor? Go Hession.

[Palm]

Good stuff, thanks

You may want to do a little research on how things like SPAs, JVOAs etc work together. It's been explained here several times.

[Putncalls]

I don't know how anyone here can assume 60+ Barrels/MMCF of condensate at Raptor.

[Getitrt2]

I have been concerned about an unfavorable outcome on the dispute  with OSH. I did not believe that IOC would receive fair value without a new facility. How can Bernstein say it is neutral.? They must believe that a facility will be built either way. Total based on the deal for EA were willing to put up big money if 8 to 10 T were proved. Since it seems there are more condensates at Raptor, as many as 3 or 4 times as many, Raptor should be more attractive. We don't need 10  T because if OSH prevails, IOC can choose to do what it wants with their share of the resource at EA. Who thought EA could be a tieback to Raptor? Go Hession.

Forget that!  A deal and LNG project supported by Raptor would be much further down the road than the project supported by E/A and perhaps expanded from Raptor or elsewhere, where there would be much more appraisal left to do.  I believe the odds of an unfavorable outcome on the arbitration are very low, but OSH would have to match the terms from Total, anyway, including the "big money if 8 to 10 T were proved", and the ownership in a "new facility".  I think Bernstein and CS ARE saying that, and that a facility supported by E/A will be built either way, either separately or in combination with PNG LNG.

I'm not an expert, but I don't think a partner in a JVOA can simply "do what it wants with their share of the resource" without majority approval, any more than OSH could do so now.  Also, I think the attractiveness of a resource for an LNG project involves a lot more than the level of condensates, and, who knows, we may even have oil at Raptor.

[calvin grad]

My take on the analyst reports on OSH  is that if OSH wins they likely would use EA to supply their existing plant. Some  believe that Exxon would replace Total  or that OSH is only the pawn of Exxon. If either is true then Exxon is in charge to their advantage. Even if it would take a little  longer I think it would be worth it to be independent of  Exxon. I believe that the conclusion of an earlier thread was that a partner can choose to do what it wants with their share of the resource.

It would seem to me that OSH could do quite well as a partner with IOC and Total. I don't  think if OSH takes over Totals interest that OSH and IOC can  proceed on their own. So what do they want?

[Putncalls]

I hope the case is heard in London rather than Port Moresby.

[Getitrt2]

My take on the analyst reports on OSH  is that if OSH wins they likely would use EA to supply their existing plant. Some  believe that Exxon would replace Total  or that OSH is only the pawn of Exxon. If either is true then Exxon is in charge to their advantage. Even if it would take a little  longer I think it would be worth it to be independent of  Exxon. I believe that the conclusion of an earlier thread was that a partner can choose to do what it wants with their share of the resource.

It would seem to me that OSH could do quite well as a partner with IOC and Total. I don't  think if OSH takes over Totals interest that OSH and IOC can  proceed on their own. So what do they want?

I think the analysts are saying that even if OSH wins and preempts Total, IOC would have to get the same deal on E/A and it would essentially be about neutral for IOC, even if the plant got built as an expansion of PNG LNG.

I don't think getting a new deal done with a partner and developing Raptor for a new LNG plant would take just a "little longer", but rather much longer.  IOC will proceed with E/A one way or another. I think it is likely to monetize Raptor either with its strategic partner Total as expansion of Antelope LNG, or as a separate project.  IOC is independent of Exxon now and I expect will win the arbitration and remain so.  Although not absolutely sure, I think you are wrong about any partner here being able to "choose to do what it wants with their share of the resource" in a JVOA, but would be interested in the input of others here on that.

I think what OSH wants is a bigger ownership share of E/A, in fact a majority share, or at least a majority share in conjunction with Exxon, period.