More talk of IOC takeover

[Stavros]

Mr. Mspieks on YAZOO posted the following:

http://finance.yahoo.com/mbview/threadview/?&bn=72dee70a-8d52-344d-94e2-bd463b806ffe&tid=1438125704163-ed56e881-1780-46c8-940b-027949900827&tls=la%2Cd%2C1%2C3

QUOTE

Total may not make a bid but they may encourage a more favored partner to bid, eg an Asian partner who can provide / secure offtake, financing and, or lng plant building exprtse. My bet is Inpex, capable of all of the foregoing and a jv partner with Total on other projects. IOC has NOTHING to offer Total; Inpex has a lot. If Total wants Inpex to be their partner in E/A , they will do everything legally possible to assist , inform , advise Inpex. At $43, IOC is unlikely to last. $60 takes it; especially with current pps

END QUOTE

INPEX as a potential buyer of IOC is an interesting thought. INPEX is Japan's largest oil and gas exploration and production company.

HOWEVER, a takeover price of $60 per share will not be entertained by IOC or major shareholders at this point in time, even if the only value IOC has to offer is E/A. No one knows for sure the amount of gas/condensate in the resource. That will be officially estimated in 1Q2016 or thereabouts.

Many in the industry still feel that 12 tcfe is possible (excluding Antelope South) which would engender an immediate $2.48 Billion payment by TOTAL for their 40.1% Gross of E/A PLUS an additional payment $ 517 Million at FID. That comes to a total of $61 per IOC share.

IOC still retains 36.5% Gross of E/A which by proration would be valued at another $54 per IOC share.

We know that Triceratops, Raptor and Bobcat are all Discoveries - let's say they're worth $5 per share each

We don't know yet whether Wahoo is a Discovery ... we'll know soon how much value it adds to the PPS. If recoverable quantities are found, it would add at least $10 per share.

We don't know yet whether Antelope Deep contains Oil/ Gas/ Condensate ... indications are that it does.

So add up all the above, and you come up with POTENTIAL value of over $130 per share by 2Q2016.

Therefore, to my opinion, at this point the IOC Board will not entertain a low-ball offer and large shareholders will not either.

An "imminent" takeover bid at low valuation is not in the cards (I'm using IOC's definition of "imminent" which is any time between now and New Year's Day).

[jft310]

Well thought out . It was clear from the AGM Hession had a defensive strategy to stop takeover talk . Many readers and posters need to read the Morgan Stanley June 18th Hession Chat posted by Gator with a PDFs on this board . I bumped it up yesterday

[Tusker]

Total is looking to add to balance sheet 6 Billion USD in 2015 through sale of assets. Recently sold some off shore Shetland islands fields and consolidated 60% ownership and operatorship of the remainder.

As for talk of takeover thoughts, I'll wait for the wild cat 170km SE of Elk/Antelope. A basin of Nat Gas is a creature of a wholly different reality to consider.

Cheers

[Palm]

Problem is Total doesn't really need someone with LNG sales contacts/experience or LNG plant building experience. They are the Operator (or soon will be) and were brought in because of THEIR vast experience in LNG. Same as Exxon for PNG LNG. Last thing Total needs is a partner sticking their nose in where it isn't needed. If an Inpex is brought in it's usually for a minority share to give them sure and less expensive source of energy.

There has been buyout buzz thrown around for years on IOC and many times it's when pps is down and some analyst or journalist lights the buyout fuse. Gets outsiders talking but usually is based on no factual base. MSpieks loves throwing these super-secret boiler room things out there, but so far nada has ever come of these "rumors".

Means nothing for me. Eventually someone may get lucky and can say "I told you so.", but that same person will never come out and say, "Huh, I was wrong again."

[Stavros]

INPEX is the operator at Ichthys and TOTAL is the lower percentage partner.
There's no reason why it can't be the opposite at E/A.

Then all other acreage will belong to INPEX

[Palm]

Not what I'm saying. INPEX (or whomever) may want in to Papua LNG, but it doesn't mean that the best or only way for that to happen is for a buyout of IOC to occur. Total was at one point said to be interested to bring someone else in at a 10-15% interest whether that means that's all purchased from Total or split between the current partners would remain to be seen. It's a way for the bigs to spread risks among projects. One takes the lead here one time and the other takes the lead on the next one.

Very common concept in things like real estate. Large home builders "take turns" being the lead. One will buy the land and develop the plan, lay out the lots, etc. then other bigs come in and commit to X number of lots. They then end up with 3-5 bigs, each with models and their own set of lots and sell the crap out of the project. Next time big 2 takes the lead, etc.

IOC knows this and also that they may need to sell another 5% to make it work. But for them to completely sell out they will demand a price that will be too rich, until maybe further down the road, and these bigs know that. Too risky until at least FID and by then pps should be much higher. And by then we will likely hit another EA-type structure and the game starts all over again.