IOC: What to expect from the general shareholdersmeeting

The scent of oil, all a bit speculative, of course..

  1. We have a feeling that deals might have to wait until there is clarity over the oil and/or condensates situation (unless there are parties who cannot wait). Negotiating without an anywhere near realistic picture on the prospects for oil is just, well, all too complex, perhaps.
  2. Another crucial element is, InterOil can wait. They have enough cash, a sound balance sheet, a proven ability to tap the finance markets even in difficult circumstances or (as as last year, when they had to repay the Merrill Lynch loan) when under time pressure. Even their mid and downstream businesses could very well add to cash-flow this year, so they can hold out for a better deal if they feel their chances for oil are good.
  3. Oil trumps condensates, it’s potentially bigger and potentially easier to get out.┬áCondensate stripping could be held in reserve, so to speak, only to be revived if there is no chance for commercial oil at Elk/Antelope, but we have a feeling that management quite fancies their chances on the oil
  4. We therefore think most of the immediate attention in the coming months will probably be on oil, to find the right spot to get it out. We know there is oil, we know that it is in porous rock, but the permeability so far has eluded InterOil.
  5. It looks like Antelope1 is will not be the well to get the oil flowing, but we still might be surprised, although the chances are diminishing.
  6. Other drilling sites, especially downdip hold better promise, as permeable rock will be deeper laid. Some of the old drilling sites like Elk2 (and Elk3, the horizontal drilling from Elk2) and Elk4 might also be revisited.
  7. So we think the private placement, instead of going to condensate stripping, would be better spend on at least one extra rig, to speed up that process.
  8. We have little doubt parties are interested to do a deal with the company though. It’s gas properties are just way too good for that. The super high flow rates and cheap environment make monetization here much cheaper than almost any competing project. It is something we have yet to see any argument against, let alone any even remotely credible ones.
  9. There is already 3.4Tcf of gas confirmed by third party and that’s not even including almost all the salient data from their record well, Antelope1. Monness, Crespi, Hardt & Co. have therefore argued the figure is likely to be 5Tcf, which will double after Antelope2. This too, might very well increase deal metrics.

5 thoughts on “IOC: What to expect from the general shareholdersmeeting”

  1. Might not be that long to wait.Maybe 3-4 months.More info from the meeting I would think.

  2. Jim Tate AKA KENCOOKSAM told me I worry to much . Now look at the story just as I predicted.

  3. Who is Jim Tate???
    Rory why are you so focused short term.You got a new reservoir size estimate today.Almost double the older one. You have a timeline from the slides for a deals.You have a new rig coming.The size of the IOC stock float because so many shares are in safe hands mine for say and managements that makes IOC a volatile stock. The number of shares available to trade is tight or not that many.. In time like 6-12 months that ends as the deals close , the stock rises and they split the stock and we get more investors and that makes the stock more liquid.I think you should wait and let mgt do its thing which is maximize shareholder value. Why cause they own 18% of the company and have options. They get paid to do the right thing increase shareholder value.Thats your shares price and it will rise over time. I am still up from $12 and hope you are also.I hope you stay but you need time with this investment. Not 30-60 more days but say 12 good solid months..Then you will be happy.This Knowledge Reservoir firm will figure how to maximize Antelope 1 for NG, NG condensate and hopefully oil production..The oils there but it may take Antelope 2 to get it out, or horizontal drilling or acid. Thats worth waiting for!!!They have the oil !!!Not like its not there its there!!!!If you sold within 60 /90days you will regret that decision I would think. Timing IOC is not possible.Being long IOC is possible.

  4. jim- ken we’ve both seen this stock go from 45 to 10 and now from 37 t0 30 in 3 weeks. Stocks are for timing to keep your profit intact. Thanks to your information its up to each individual to diesect the twists and turns of the story. As you have told the IOC story, the management has changed with the well results. I anticipated disappointment which saved me some cash. Once the chart and story improve I’ll be back in. Even if you pay a higher price it doesn’t matter if the stock goes higher while your in. Thanks again for keeping us informed

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