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InterOil Corporation Message Board

  • erichsussman erichsussman Jan 2, 2012 6:07 PM Flag


    With so much great football on the tele, I was able to multi-task. Stp asked me to provide at least five misleading, incomplete, or misleading press releases that IOC has issued over time. Here is that list. Now, keep in mind that the company's website has faulty links, so many of the older press releases are unavailable...and I found several of those to be problematic. But I cannot access them now. In addition, I am not saying that IOC has lied in these press releases, and Stp is confused about that. Lying is one thing, while being misleading, incomplete, and/or inaccurate is another. Here goes:

    1) This is misleading because the 10% rate ignores the $1.0 million finance fee, which was buried in the quarterly report, and it brought up the APR on the debt to over 20%. I think you even conceded this was inappropriate. Well, you said it looked to be a “favor” from the company to Civelli, which kills me.

    2) coupled with . Note that in first release, the company states that “InterOil and its subsidiaries were not party to, nor otherwise involved in, the Nikiski Partners filing referenced in the article.” How curious and incomplete that initial press release must be since the later press release indicates that “it has entered into an agreement to settle all claims against it and its subsidiaries”. Wait a sec! They were not involved? Oops. Well, as the latter press release goes on to state, the Company “will issue 199,667 common shares to the plaintiffs,valued at $12 million based on a volume weighted average price calculated over the ten trading days prior to execution of the settlement agreement.” What a joke.

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    • 3) coupled with any number of other quarterly financial press releases. Note that when the company reports a net profit, they mention it in the press release title. Not so, when they report a loss. While factually correct, this is misleading for a couple reasons. One is let’s face it. IOC reporting a nominal net profit is simply not a big deal. It’s meant to make a big deal out of something, which is a big “who cares”. That’s not too material, in my view. The bigger issue is that the net profit highlighted in the press release includes non-recurring gains, which distort the results (which they pump big time by stating that the results are a company “record”). There was a $10.2 million gain on the sale of certain property and a foreign exchange gain of $3.5 million. The latter was interesting because it appears nowhere in the initial press release, but then shows up in the financial statements. They buried it in the press release. Gotta love that! Anyhow, the sum of these two things materially changes the picture of the reported results.

      4) This is misleading because they characterize – on several occasions – the funds received from Mitsui as a “payment to fund the Front-End Engineering and Design of the proposed condensate stripping plant. An initial payment of $2.2 million was recently received and is representative of the commitment by Mitsui to further the FEED process. InterOil expects further instalments in the near future to cover costs already incurred by InterOil on the project” when they are really an “advance”. That is the word they should have used to indicate that the funds are really a loan until FID is reached. The way they have worded it in the whole paragraph is incomplete and misleading.

      • 1 Reply to erichsussman
      • 5) This is a doozie. On September 27 of 2011, the company issued this press release:, which states in its header that “INTEROIL’S GULF LNG PROJECT IN LINE WITH PROJECT AGREEMENT.” And yet, a mere three days later, they issued a completely different press release: This release is a clear acknowledgement that the company was not in compliance with the Project Agreement.

        6) This press release really puzzles me on a whole host of levels, and is incomplete and misleading. One issue is that the entire release is about a release obtained by PIE Group LLC, an entity controlled by Mr. Mulacek, related to the OPIC Loan. There was no change in IOC’s continuing obligations or guarantee, so why this needed to be disclosed via a press release is beyond me. The financial statement footnotes make no mention of this fact, that certain PIE assets acted as additional security for the loan. If anything, this is a negative vis a vis IOC, since they are now the sole collateral for the loan. Then, the press release says PIE Group LLC has informed InterOil that” it will distribute the common shares to its individual members and will be dissolved. The effect of this distribution will be a reduction in the number of InterOil’s common shares controlled by Mr. Mulacek and a less than corresponding increase in his personal holdings.” Hmm. If it is to be dissolved, that can be done very quickly, and yet, the company continues to pay PIE consulting fees? And where did the shares go? To others who can sell? There are as many questions than answers. And, finally, Collin Visaggio, InterOil Chief Financial Officer, commented, “I am pleased that we have restructured the existing debt arrangement in preparation for further investment in the Gulf LNG Project.” But, this is not true, as indicated above. IOC does not benefit one iota from this change, but only Phil.

        7) Bonk has written extensively about the conditional guarantee required by Samsung, and I believe he found it elsewhere, in the Flex press release. The press release makes it sound like a no-brainer, a done deal, and we now know it is anything but.

    • I am pleased to announce that in this thread we have indications of a late night for STP.



      and you know what seems the gas has gone too....


    • casserta Jan 2, 2012 6:39 PM Flag

      Pumps will be sucking pond water for a long time on this one!!!!

      could someone please foward to ms mary l. Shapiro esq. C/o the sec, wash dc?

    • VERY funny, Stp. And I have more to post, darn it, but Yahoo won't let me...

    • I mean, Bonk!

    • And I have a total of 15 (I'll see if I can post later tonight or tomorrow), and all press releases from 2003 through 2008 (or thereabouts) are not available on the company website due to some bad links...

    • Hey Eric - here is a head scratcher for you:

      There was recent discussion about a PDL, and whether or not it is required for advancing the project. Courtesy of Binck who posted a transcript from the Nov CC:

      "Phil E. Mulacek: We have a retention license and a lot of - or even Chevron went into production with a PRL and the PDL allows you to do the social mapping for landowners, complete the landowner forms and then you get a PDL.
      And that’s - can happen post-production or prior. For us because of the LNG project, it’ll be - we’ll get it pre-production because of the timing; we’ll have [ph] then (52:34) significant time.
      But the final approvals by the minister and the government is - were submitted documents and that process is underway.
      So it’s not a fixed milestone that you have to have before the next step. It’s something that you do in parallel sort of like our refinery facilities licence actually was granted post-commercial operations."

      Yet here is what IOC's 2010 AIF says about a PDL:

      "Petroleum Development License (“PDL”)
      In order to progress the proposed development and commercialization of the Elk and Antelope fields, which
      are within PRL 15, we are required to apply for a PDL."

      and here is the hammer in that same document on page 28:

      "We are currently undertaking the work required under PNG’s Oil & Gas Act for a PDL for the Elk and Antelope gas fields and other related licenses which will be required for pipelines and processing facilities."

      and even weirder, there is this IOC press release:

      which says on Dec 2, 2010:

      "A petroleum development license, for which application has not yet been made, and further government approvals will be required before commencement of construction or commercial production of hydrocarbons."

      But the above PR, while filed with SEC, is NOWHERE on the IOC website PR listing - not just a broken link, just not there.

      I don't know about you but what the CEO stated on the call doesn't seem to exactly jive with what's in the company's own PR and filings in my opinion, or at least there is room for clarification. The debate that took place on this board (where I had to straighten out the ubers on this matter) is a testament to the confusion.

    • Hey Eric...

    • Hey bonk...

    • View More Messages
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