If you ended exclusivity period and you had a higher money offer and a better deal would you accept it?Or would you give the first bidder a chance to rebid. Would you bring in an experienced LNG deal team??Would you sign a deal to monetize the more than 9 trillion mcf(per 3 independent reviews) you found at E/A for a twenty five year period with the first acceptable deal you were presented. Or would you put one bidder against the other and take the best deal. That's why you brought in the experienced LNG negotiating team. The winner will pay up for the largest find in Asia in 20 years with the lowest costs to develop in the area. No one can compete with IOC's concentration of assets and costs. Sell it to the high bid.Will it be October 2013???
On December 31, 2009, IOC's stock price closed at 76.81. It was not long thereafter that the 2009 Annual Report was released with estimates that E/A contained contingent resources north of 9 tcf. Subsequently, a sell down process was begun in September of 2011 using three well regarded investment banks. After a nearly year and a half long process, it still took almost three months before IOC entered exclusive negotiations with a prospective partner. And when no deal was consummated after another three months, exclusivity lapsed.
If the asset is so amazing, why has there been no monetization after all this time? Why did XOM not close and relinquish exclusivity? I have bought many companies, and if my partners and I really wanted to get a deal done, we would never have allowed exclusivity to lapse.
Further, isn't it logical to assume that XOM put the best deal on the table? Why else would IOC grant exclusivity in the first place? And why would anyone think that now, after all this time and after that three month period between the final bids and XOM exclusivity, would there now be another entity willing to pay more? What has changed in the meantime? Certainly not additional drilling results.
The longs, pumpers and touts will cling to the idea of this spectacular "verified" resource, but if the resource was as good as they think it is, there is no way it would not have been monetized yet. I don't care if it is PNG, the markets are just not that inefficient.