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  • kencooksam kencooksam Oct 18, 2013 2:36 PM Flag

    Wayne Andrews call today ,from Investor Village poster wiggling

    Notes on my discussion today
    Spoke to Wayne today. Very useful call. Here are my notes based on MY interpretation of our discussion.

    (1) First I am reassured. It appears XOM is at the table and eager. It appears IOC is not asking anything unreasonable. An equity stake in PNG LNG sounds like it's definitely part of the package. The citi report is not a bad guide where the guy used $1 an mcf to estimate an 11% stake in 4 trains. I get the impression XOM wants to eat all the gas at E/A. 1 train is a given and the negotiations should include delineation drilling for 2 or more trains.

    I suspect about $1 an mcf will be the price in a final transaction.

    (2) The ship is now run very tight by Hession. In particular, Pacific LNG is not at the table and they were the source (apparently) for a lot of leaks. The I bankers are also not at the table. Hence the dearth of leaks and info. Hession fully understands that he didn't support shareholders in the last call, and I expect things to be different in the next call assuming a deal is not already announced. I still hope we get a deal prior to our conference call.

    (3) Apparently it's down to the fine details. Hession has brought in a lot of expertise from Woodside and they are negotiating away to get us the best possible deal. Most importantly, it appears there are no objections from Duma or Kavo, and we already know the national government is on board.

    (4) Everybody wants it done. I do believe it will get done now. The BOD fired Phil basically because he was running amateur hour with lots of overpromising and underperforming. That has swung the other way. Hession doesn't want to say anything; he appears to want his results to speak for themselves. We shall see.

    (5) They do not believe that PRL or PPL retention will be an issue. Expiration is in March 2014, and so far, licenses have been renewed for companies in good standing in the PNG. I tend to agree.

    (6) Oct 31 XOM conference call; the week of Nov 11 for us. I expect it to be handled much better than last time.

    (7) They have enough money to continue exploration. Wahoo should still spud in November and a PRE joint well at Triceratops in Q4 or Q1 of next year. They are running seismic with oil exploration at triceratops, and they've also seen a new anomaly between Tricer and E/A. That's exciting.

    (8) In terms of other possible partners: they are all majors. I get the feeling Total is the main player interested in IOC, which also makes sense in terms of their land position and failure to hit with Oil Exploration. If they top XOM, it will have to be a damn good offer since it will be a green field project versus XOM's excellent economics of adding to their existing infrastructure. XOM's pipeline can already support 3 trains.

    Summary: I think we have been smacked around by lack of data. It sounds like negotiations are on a reasonable track to the extent that Wayne knows what's happening. I expected a sell-off around the debt ceiling issue as I posted before. I also expect a strong rise going into the XOM call; a prediction I hope comes true!

    I think the call confirms my view that this is a different IOC. It's run by a serious crew. We are trading at less than 1/2 my expected price for E/A alone. The company will be massively rerated if or when they close the monetization deal. Let's see some results by our conference call please!

    Wiggling





    Notes on my discussion today
    Spoke to Wayne today. Very useful call. Here are my notes based on MY interpretation of our discussion.

    (1) First I am reassured. It appears XOM is at the table and eager. It appears IOC is not asking anything unreasonable. An equity stake in PNG LNG sounds like it's definitely part of the package. The citi report is not a bad guide where the guy used $1 an mcf to estimate an 11% stake in 4 trains. I get the impression XOM wants to eat all the gas at E/A. 1 train is a given and the negotiations should include delineation drilling for 2 or more trains.

    I suspect about $1 an mcf will be the price in a final transaction.

    (2) The ship is now run very tight by Hession. In particular, Pacific LNG is not at the table and they were the source (apparently) for a lot of leaks. The I bankers are also not at the table. Hence the dearth of leaks and info. Hession fully understands that he didn't support shareholders in the last call, and I expect things to be different in the next call assuming a deal is not already announced. I still hope we get a deal prior to our conference call.

    (3) Apparently it's down to the fine details. Hession has brought in a lot of expertise from Woodside and they are negotiating away to get us the best possible deal. Most importantly, it appears there are no objections from Duma or Kavo, and we already know the national government is on board.

    (4) Everybody wants it done. I do believe it will get done now. The BOD fired Phil basically because he was running amateur hour with lots of overpromising and underperforming. That has swung the other way. Hession doesn't want to say anything; he appears to want his results to speak for themselves. We shall see.

    (5) They do not believe that PRL or PPL retention will be an issue. Expiration is in March 2014, and so far, licenses have been renewed for companies in good standing in the PNG. I tend to agree.

    (6) Oct 31 XOM conference call; the week of Nov 11 for us. I expect it to be handled much better than last time.

    (7) They have enough money to continue exploration. Wahoo should still spud in November and a PRE joint well at Triceratops in Q4 or Q1 of next year. They are running seismic with oil exploration at triceratops, and they've also seen a new anomaly between Tricer and E/A. That's exciting.

    (8) In terms of other possible partners: they are all majors. I get the feeling Total is the main player interested in IOC, which also makes sense in terms of their land position and failure to hit with Oil Exploration. If they top XOM, it will have to be a damn good offer since it will be a green field project versus XOM's excellent economics of adding to their existing infrastructure. XOM's pipeline can already support 3 trains.

    Summary: I think we have been smacked around by lack of data. It sounds like negotiations are on a reasonable track to the extent that Wayne knows what's happening. I expected a sell-off around the debt ceiling issue as I posted before. I also expect a strong rise going into the XOM call; a prediction I hope comes true!

    I think the call confirms my view that this is a different IOC. It's run by a serious crew. We are trading at less than 1/2 my expected price for E/A alone. The company will be massively rerated if or when they close the monetization deal. Let's see some results by our conference call please!

    Wiggling





    Notes on my discussion today
    Spoke to Wayne today. Very useful call. Here are my notes based on MY interpretation of our discussion.

    (1) First I am reassured. It appears XOM is at the table and eager. It appears IOC is not asking anything unreasonable. An equity stake in PNG LNG sounds like it's definitely part of the package. The citi report is not a bad guide where the guy used $1 an mcf to estimate an 11% stake in 4 trains. I get the impression XOM wants to eat all the gas at E/A. 1 train is a given and the negotiations should include delineation drilling for 2 or more trains.

    I suspect about $1 an mcf will be the price in a final transaction.

    (2) The ship is now run very tight by Hession. In particular, Pacific LNG is not at the table and they were the source (apparently) for a lot of leaks. The I bankers are also not at the table. Hence the dearth of leaks and info. Hession fully understands that he didn't support shareholders in the last call, and I expect things to be different in the next call assuming a deal is not already announced. I still hope we get a deal prior to our conference call.

    (3) Apparently it's down to the fine details. Hession has brought in a lot of expertise from Woodside and they are negotiating away to get us the best possible deal. Most importantly, it appears there are no objections from Duma or Kavo, and we already know the national government is on board.

    (4) Everybody wants it done. I do believe it will get done now. The BOD fired Phil basically because he was running amateur hour with lots of overpromising and underperforming. That has swung the other way. Hession doesn't want to say anything; he appears to want his results to speak for themselves. We shall see.

    (5) They do not believe that PRL or PPL retention will be an issue. Expiration is in March 2014, and so far, licenses have been renewed for companies in good standing in the PNG. I tend to agree.

    (6) Oct 31 XOM conference call; the week of Nov 11 for us. I expect it to be handled much better than last time.

    (7) They have enough money to continue exploration. Wahoo should still spud in November and a PRE joint well at Triceratops in Q4 or Q1 of next year. They are running seismic with oil exploration at triceratops, and they've also seen a new anomaly between Tricer and E/A. That's exciting.

    (8) In terms of other possible partners: they are all majors. I get the feeling Total is the main player interested in IOC, which also makes sense in terms of their land position and failure to hit with Oil Exploration. If they top XOM, it will have to be a damn good offer since it will be a green field project versus XOM's excellent economics of adding to their existing infrastructure. XOM's pipeline can already support 3 trains.

    Summary: I think we have been smacked around by lack of data. It sounds like negotiations are on a reasonable track to the extent that Wayne knows what's happening. I expected a sell-off around the debt ceiling issue as I posted before. I also expect a strong rise going into the XOM call; a prediction I hope comes true!

    I think the call confirms my view that this is a different IOC. It's run by a serious crew. We are trading at less than 1/2 my expected price for E/A alone. The company will be massively rerated if or when they close the monetization deal. Let's see some results by our conference call please!

    Wiggling




    Notes on my discussion today
    Spoke to Wayne today. Very useful call. Here are my notes based on MY interpretation of our discussion.
    (1) First I am reassured. It appears XOM is at the table and eager. It appears IOC is not asking anything unreasonable. An equity stake in PNG LNG sounds like it's definitely part of the package. The citi report is not a bad guide where the guy used $1 an mcf to estimate an 11% stake in 4 trains. I get the impression XOM wants to eat all the gas at E/A. 1 train is a given and the negotiations should include delineation drilling for 2 or more trains.
    I suspect about $1 an mcf will be the price in a final transaction.
    (2) The ship is now run very tight by Hession. In particular, Pacific LNG is not at the table and they were the source (apparently) for a lot of leaks. The I bankers are also not at the table. Hence the dearth of leaks and info. Hession fully understands that he didn't support shareholders in the last call, and I expect things to be different in the next call assuming a deal is not already announced. I still hope we get a deal prior to our conference call.
    (3) Apparently it's down to the fine details. Hession has brought in a lot of expertise from Woodside and they are negotiating away to get us the best possible deal. Most importantly, it appears there are no objections from Duma or Kavo, and we already know the national government is on board.
    (4) Everybody wants it done. I do believe it will get done now. The BOD fired Phil basically because he was running amateur hour with lots of overpromising and underperforming. That has swung the other way. Hession doesn't want to say anything; he appears to want his results to speak for themselves. We shall see.
    (5) They do not believe that PRL or PPL retention will be an issue. Expiration is in March 2014, and so far, licenses have been renewed for companies in good standing in the PNG. I tend to agree.
    (6) Oct 31 XOM conference call; the week of Nov 11 for us. I expect it to be handled much better than last time.
    (7) They have enough money to continue exploration. Wahoo should still spud in November and a PRE joint well at Triceratops in Q4 or Q1 of next year. They are running seismic with oil exploration at triceratops, and they've also seen a new anomaly between Tricer and E/A. That's exciting.
    (8) In terms of other possible partners: they are all majors. I get the feeling Total is the main player interested in IOC, which also makes sense in terms of their land position and failure to hit with Oil Exploration. If they top XOM, it will have to be a damn good offer since it will be a green field project versus XOM's excellent economics of adding to their existing infrastructure. XOM's pipeline can already support 3 trains.
    Summary: I think we have been smacked around by lack of data. It sounds like negotiations are on a reasonable track to the extent that Wayne knows what's happening. I expected a sell-off around the debt ceiling issue as I posted before. I also expect a strong rise going into the XOM call; a prediction I hope comes true!
    I think the call confirms my view that this is a different IOC. It's run by a serious crew. We are trading at less than 1/2 my expected price for E/A alone. The company will be massively rerated if or when they close the monetization deal. Let's see some results by our conference call please!
    Wiggling

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    • "Summary: I think we have been smacked around by lack of data."
      Bingo. This is right on the mark. For the bashers or jump on this messageboard, it becomes easy to use each day where no announcement is made as a platform to say "see nothing's happening". The only source of rebuttal will be the eventual announcement of a deal, be it a triumph or disappointment.
      For anyone concerned with claims of talks no longer being exclusive, there is NOTHING out of the ordinary there. Typically companies will negotiate the right of exclusive talks for a period of time, to give that negotiating partner a 'leg up' on the other companies. It's natural that period may expire prior to the announcement of a deal but is in no way an indicator that no such deal will happen.
      I'm not saying the deal will happen, though I obviously prefer to think it will, but there is no information at this moment to feel that anything has changed until one of the negotiating partners exclaims the deal is dead. In short, No Ga-News is good Ga-news. In the meantime, this stock is way undervalued at $65 a share.

      Sentiment: Buy

    • Shortie doesn't like this post must be a good one

    • Thanks Ken, a great update; hope we hear something soon.
      ed

      Sentiment: Strong Buy

    • Excellent post Ken, reassuring to say the least.
      Hang tough

      Sentiment: Strong Buy

    • bump

    • most of the time when you do speak with these guys, they ask kindly that you NOT go out and post anything on line. It is just something they hope you will not do. I have spoken to Wayne and he has said to me that I should not go post it and out of respect for him I do not. This appears he taped recorded the conversation and do not think Wayne would like this.

      • 1 Reply to stevejackson22
      • " I have spoken to Wayne and he has said to me that I should not go post it "

        If that's true it's the first time I've ever come across an IR exec stating something like this. By saying "don't post it" it implies that it is some kind of *wink *wink or inside scoop or selective and/or inappropriate disclosure. I've dealt with a great many IR execs and have never come across this. In fact I would hang up the phone if I ever heard those words as it could freeze me from trading if it's some kind of inside scoop.

        Surely Wayne isn't that stupid.

        Sentiment: Strong Sell

    • I have been noodling on this issue for a little bit now, and I want to present a hypothesis. I not only don't believe that what is said here, at Investor's Village, or at SHU matter that much (nor does what bashers say), but I no longer believe that the individual investor matters much to IOC price per share. There are probably just not enough of us. That would help to explain why we struggle to even stay green today, despite such a rosy posting. After all, this is not a well known stock like Apple or Coke. There are just not enough of us to move the needle either way in the face of large hedge fund or investment houses like Wells Fargo. So this obsession with bashers, with moderates, with pumpers and anyone who expresses an opinion here should just be seen for what it appears to be: dialogue between interested parties and the occasional new basher ID that irritates everyone. In a way, this revelation is liberating. Not only don't thumbs up or down matter (although satisfying to give), but actual investment decisions by us individual investors probably don't matter much. The one exception to this is the former BIG rumors...e.g., of an immanent deal, or new bidder. Those did seem to move the needle. For example when O'Neill said we were in exclusive negotiations with Exxon, and there seemed to be a 60 day window...now their was info that could move the needle.
      So my conclusion is: lets not get too wound around the axel over whether people are looking at the right evidence. It's a fun exercise in dialogue, nothing more, IMHO.

    • Excellent write-up and it would certainly make me feel much better were it not for the following: The big investors certainly have access to Wayne as much as some anonymous caller. If THEY were reassured in any way, then why do we languish below 65 due to no significant buying as the rest of the market does well? I am not one who believes the market "knows all", but it is certainly a measure of how the big investors are reacting to the delays and prospects of near and medium term resolution. This piece makes it sound like they are AGAIN, just working out the details. I will be reassured when the market is reassured.

    • Thanks Ken, it makes my waiting a little more tolerable.

      Sentiment: Strong Buy

    • yadayadayadada.. and stock heading to 40....

 
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