Interoil vs other energy stocks

[jft310]

Speaking to IR yesterday I was reminded of a key point that needed to be reinforced . The major catalyst for Interoil is the Total payment or certification. It's even more important because it's not tied to the price of oil or the price of LNG but in fact tied to the asset size . The more that's proved out the more we get paid not conditional on the oil or LNG markets . Further per Dr Hession's AGM talk if Wahoo hits we could be looking at another payment from Exxon. More cash flow for the kitty.

When for the payment and how much are to be determined . The AGM slides give you an indication with the Ant 5 Fault move west that the asset size is larger than first thought.

[Gator]

"The major catalyst for Interoil is the Total payment or certification"

True, but the major problem with InterOil is WHEN? 593 days after our “transformational deal” shareholders and Wall Street still do not know the three critical components to calculate what the value of the company is: When, How much, What price. We know that price is determined by quantity (bigger is better) but other than that we know nothing. Timing of payment keeps slipping. Management wants to get paid on every molecule of gas. That’s great but if we spud Antelope 17 in 2028 to make sure we got the last drop, none of this matter. Shareholders are now faced with a plethora of energy stocks down 25% to 90% from the peek. Some have less risk than InterOil and some have more. As we have seen so far this month, some shareholders move on. As they say timing is everything.

[Palm]

And the point I made with IR yesterday. The share liquidity changed very little with this Chandler bail as most of the shares were purchased by another big or two. They now have gotten in at much lower pps that Chandler. Same with the Wells buyers. These and other buyers at this lower pps purchase price don't have to see near as much price appreciation (ie don't need to see $125+) to be very happy. We all assume every holder of shares will hold until the magical multi-hundreds pps. Won't likely be the case. So if/when pps gets to $75-$80 (for instance) will we see these new buyers sell-the-news because they have reached their target pps and thus we see "our" pps held back/stunted? Then we have to wait for the next and next catalyst to get to where we are finally "happy"?

Hard to answer that unknown today because we never seem to get to those big catalysts, or when we do they are not so big. A lot of good old "potential" in this stock. Will these "coaches" get everything out of it? We have a few seasons before we see any answer.

[ArtM72]

"The major catalyst for Interoil is the Total payment or certification"

True, but the major problem with InterOil is WHEN? 593 days after our “transformational deal” shareholders and Wall Street still do not know the three critical components to calculate what the value of the company is: When, How much, What price. We know that price is determined by quantity (bigger is better) but other than that we know nothing. Timing of payment keeps slipping. Management wants to get paid on every molecule of gas. That’s great but if we spud Antelope 17 in 2028 to make sure we got the last drop, none of this matter. Shareholders are now faced with a plethora of energy stocks down 25% to 90% from the peek. Some have less risk than InterOil and some have more. As we have seen so far this month, some shareholders move on. As they say timing is everything.

Good points.  A good stock that has dropped 90% that will return to 2013 levels in a couple years is a two year 10 bagger.  Is IOC a two year 10 bagger?  Some of us still think so (and have for many years).

Whatever the reason for Chandler's sale it seems to me a lot of 5,000 share blocks out there in other peoples' hands has to be good for the market of this stock.  Absent malfeasance IOC still looks good.  Wouldn't it be odd if there was no market response to success at Wahoo?

[Getitrt2]

Gator, you can express disagreement and criticism about how the Company is proceeding or progressing without gross negative exaggeration, like "keeps slipping" and Antelope 17 in 2028". There has been initial slippage from the Ant 4 problems caused by the poor rig they had to use, which we've all known about a long time. The Ant 5 operational performance, with a better rig, and well results have been not only good, but spectacular. The JV decided to drill Ant 6, and in spite of the Ant 4 problems that is expected to complete drilling in Q4. It is false statements to say management wants to get paid on "every molecule of gas" or "make sure we got the last drop". They want to get paid on every Tcfe of gas, that's TRILLION CUBIC FEET, and have a better understanding of the resource size for the project, and I feel sure will not be proposing an Ant 8. Management thinks, and I agree, that those results, including hundreds of millions of dollars in additional cash for IOC in coming months, would be worth a few months more in appraisal work, while probably not even delaying LNG project work. That resource certification, of course, will better enable investors to "calculate the value of the Company", and is likely to be the most important catalyst for the stock in the coming months and year. Timing is very important, but not everything.

[Getitrt2]

There may be some valid points about new shareholders at lower entry costs being happier with lower future prices. However, I don't think those shares are mostly with traders, but rather longer-term investors who will evaluate the value of the stock as catalysts occur and time passes, and will be happier with possibly taxable triples than doubles. A lot of current shareholders have lower cost bases. Hell, UPL multiplied TEN times in its early years, and sophisticated investors will understand the potential if progress continues.

I also think it will be better for the stock with less concentration in holders. There is still a lot of concentration now with American Funds (Capital ...), but that is spread among multiple funds that are very large, and they are definitely long-term investors.

[Palm]

But IR is saying that the high concentration is BAD, not good as there is not enough liquidity. And so there is more danger of these bigs doing what Wells and Chandler have done; exiting through block sales at lower prices than what the current pps happens to be. We've had several of these bigs get fed up and leave/drastically lower holdings (Soros, Paulson, Pickens, Wells, Chandler); all due to unmet expectations.

The history of this company has been lots of potential, lots of good news coming, 10, 20, 27 Ts, and yet we sit today at $42. Unfulfilled potential is a dangerous thing and IOC as become known for it. With that history and with those bigs who have come and gone, eventually the reputation precedes. Current "long-term investors" question more and newcomers may well have much less patience. I can't be any more certain of that than you can that they will "possibly be happier with triples than doubles". We'll see who these new bigs might be, and how much patience everyone has should more delays come.

[Getitrt2]

But IR is saying that the high concentration is BAD, not good as there is not enough liquidity. And so there is more danger of these bigs doing what Wells and Chandler have done; exiting through block sales at lower prices than what the current pps happens to be. We've had several of these bigs get fed up and leave/drastically lower holdings (Soros, Paulson, Pickens, Wells, Chandler); all due to unmet expectations. The history of this company has been lots of potential, lots of good news coming, 10, 20, 27 Ts, and yet we sit today at $42. Unfulfilled potential is a dangerous thing and IOC as become known for it. With that history and with those bigs who have come and gone, eventually the reputation precedes. Current "long-term investors" question more and newcomers may well have much less patience. I can't be any more certain of that than you can that they will "possibly be happier with triples than doubles". We'll see who these new bigs might be, and how much patience everyone has should more delays come.

I agreed on the concentration.  Who are you arguing with?  I said above, "I also think it will be better for the stock with less concentration in holders."  I just went on to say the one of the three biggest ones we have left is probably the best one to still have.  I also do not have the impression that ALL the liquidations were ENTIRELY "due to unmet expectations", a factor but not the only one in every case.

Your "triples" quote is rearranged and incorrect.  "Possibly" went with "taxable".  Please do not use quotation marks and misquote me.  It was expressed as an opinion and not just a possibility, but it's not a big deal.  Of course, an opinion is not intended as a "certainty".

You have valid points about the Company's history.  However, I strongly believe it is now a totally different company and situation, and that more investors over time will realize that with that history becoming much less of a factor.  I hope people here will begin to be able to put it behind us as well.

[Thylacine-2]

It seems to me that the word "delay" is being used when some investors' expectations aren't met. And investors are different. To me, there haven't been any significant delays since Hession came to IOC. If the target date for FID slides, Id call that a delay.

[jft310]

How long would you wait for the next Arun??
Arun was 14 T's , 6 trains , 50 percent of Mobil Oils profit for 20 years .
Many posters only talk about Elk/antelope T's .
Hint not lost on Total they bought into PRL 15 .
Antelope South is smaller part of the payment but per Interoil Internal Reservoir Engineers it's got another 5.5 T's to add to Elk/Antelope .
If Elk/Antelope is 10 T's add another Interoil's best guess is 5.5 T 's more .
Or 15.5 T's larger than Arun.
This ignores the acreage outside PRL 15 .
Looking back and casting stones is easy .
Looking at what Hession has created for future shareholder capture is very meaningful . One needs to measure from Hession start not your invest date on your purchase . This is a new company . The market price will catch up to his foundation efforts .