Friday Fact

[Gator]

Fact: InterOil is down 49.53% since Hession became CEO.  It has not been easy for any company in the energy sector but IOC has under performed OSH (33.3%), Woodside (28.4%), XOM (18.2%) and TOT (6.3%). Not to mention the other 4 companies pay dividends.  Hession took over InterOil because he said they had a world class asset.  When a sports team has an all star player, but fails to make the playoffs, they fire the coach.

[MartiniStocks9756]

Interesting everyone is on Hession's case as coach. Never a word about the Board Chairman. I guess in this analogy he is the general manager and we are the owners. I am probably crazy but bought more.

[jft310]

Sure we could have sold all of PRL-15 to Exxon for the GCA number of 5.3 T's P-1 . That would have been brilliant .Exxon only pays on P-1 numbers . A deal with no upside in asset discovery . A deal with a set price or a scaled deal more pay for more assets . Which pile of money is higher the Exxon deal with 5.3 T's or the Total deal with unlimited upside which many think is 12 ish T's .

The point about the Officer's not buying stock is valid . The point about not proving out the assets for a higher cash payment has no merit . Why?? Look at increase in the assets that's been taken from seismic to tested and now proven . Just FACT's .

[ArtM72]

Few coaches are able to negotiate $30 million severance packages, especially without a long history of winning teams. As senior VP of the Browse project he led quite a few people down the primrose path. I've wondered for some time whether echos of that disaster are now haunting IOC.

[jft310]

Further the Exxon deal offered no LNG participation to Interoil . They wanted to buy our gas only , use their current pipeline and expand by one train the PNGLNG plant .
What yields more value a 30 percent interest in an LNG plant or Exxon's zero percent interest .
FACTS!!

[Gator]

If 12tcf is certified, then it is a fact. As of now it is speculation. I am dealing with facts only. Fact: IOC stock has under-performed. Fact: InterOil had pushed back the expected certification twice. Fact: Two of the largest shareholders have sold. Fact: The current market cap of the stock is under $1.7 billion. InterOil can not control energy or stock prices, but they should have controlled the time to certification better. The first delay Wall Street gave a pass, the second has killed the share price. Hession said we only get two bites of the cherry, the problem is if you leave fruit on the vine too long, sometimes it goes bad.

[ArtM72]

Further the Exxon deal offered no LNG participation to Interoil . They wanted to buy our gas only , use their current pipeline and expand by one train the PNGLNG plant . What yields more value a 30 percent interest in an LNG plant or Exxon's zero percent interest . FACTS!!

Sorry, JFT, your beliefs about what was on or off the table during the Exxon negotiations are not facts...or "FACTS" for that matter.  Third hand (at best) rumors don't quite qualify.  It is unfortunate that we need to try to reassure ourselves there really are good things happening with IOC.  Trying to keep things real doesn't help.

[Gator]

Further the Exxon deal offered no LNG participation to Interoil . They wanted to buy our gas only , use their current pipeline and expand by one train the PNGLNG plant . What yields more value a 30 percent interest in an LNG plant or Exxon's zero percent interest . FACTS!!

Post the documents regarding the XOM offer, then it is fact. Since you don't know the details of that deal, you are speculating.

[Getitrt2]

Gator, I would really like to hear your "factual" description of exactly how they "should have controlled the time to certification better".

The suggestion by a shareholder that the stock action of IOC should be comparable to the majors, which have suffered extremely heavy declines for them historically, and that as a result of what's happened Hession should now be fired, seems to me so incomprehensible and frankly ridiculous that I can't help wondering what world that shareholder is living in, or whether he is really even a shareholder. IMO, and you are, of course, welcome to your opinion as well, fwiw.

[MRP]

The stock price issue is an interesting one. Energy prices are obviously outside of management's control but a very sizable chuck of value has a locked in price per mcf by the Total selldown. The biggest thing that will make a difference over the next year is the Elk/Antelope certification number. You may note that Hession has never explicitly stated any number or range for the expected certification at Elk/Antelope.

The closest Hession has come is in the most recent presentation when he spoke about having enough for a two train development. The problem was when an analyst asked if this mean 7.0TCF he declined to say anything other than enough for two trains.

Management has spoken about shifts in their high case to mid case for specific parameter assumptions. This is certainly a good thing but we don't know what current managements mid or high cases were to begin with and they were certainly different than previous managements. Also, this is only one or two parameters out of many that are needed to estimate reserves. The well data has been great so far but it remains difficult to piece together the big picture for people that are very versed in it. Its nearly impossible for people who aren't specialized. Once a Elk/Antelope is certified at X.X TCF this becomes a much more straightforward story.

I appreciate that Hession is trying to establish a conservative approach but if he wanted to put a floor on the stock all he would have to do is say "We are expecting Elk/Antelope to be certified at no less that 7.0TCF and up to 9.0TCF pending drilling results" The analysts would run with this and it would be instant stock appreciation. He obviously doesn't want to miss this number to the downside but at this point management must have a pretty good idea of what the range is going to be. I think its likely we hear nothing until the actual certification but thats all it would take.