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InterOil Corporation Message Board

  • pickboone pickboone Mar 29, 2013 10:54 AM Flag

    The last shackle breaks, the floodgates break open?

    Rumors of Petromin's dismantling and a scramble by Shell to buy into InterOil's assets posted by credible long-time posters have suddenly flooded the message boards. Assuming the veracity of these reports is confirmed, the implications are very significant for InterOil:

    1) On April 21, 2011, Petromin reportedly "schemed “Project Zebra”under which it has mounted a hostile takeover or dilution bid of InterOil’s LNG project equity position as a condition of Shell’s engagement as Gulf LNG project operator."

    2) Though PM O'Neill's position has been to "develop the two LNG projects together and for new and returning foreign investors to follow the laws of PNG and come through the “front door” to invest in PNG", IOC's stock has been stagnant since April 2011 despite the stock market appreciating approximately 20%, Antelope-3 and Triceratops-1 being successfully drilled and tested, the LNG market tightening further, and "several bids" from world class operators for stakes in Elk/Antelope being received.

    3) Hence, one could surmise that despite the O'Neill administration's unprecedented power and positive predisposition to private industry and InterOil, concerns about Petromin and Shell's antics have suppressed the stock's appreciation and emboldened the shorts.

    4) Shell's CFO has already publicly acknowledged Shell's interest in InterOil's gas, and Petromin's dismantling would logically have been the final straw that would result in Shell legitimately bidding for InterOil's assets or even the entire company as the hope that Petromin could coerce a bad deal for InterOil gets obliterated; hence it's no coincidence that reports of Petromin's dismantling are being followed by reports of Shell's scramble to bid for InterOil's resource.

    5) With Petromin being disempowered, I believe IOC is worth significantly more than Oil Search, which has a $10 billion market capitalization.

    6) Shell's late entry into the fray implies a true bidding war for IOC's assets - think Cove!

    Sentiment: Strong Buy

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