Hilarious. No qualms about posting past Westlake reports that were uber bullish, and no qualms about posting MS research provided by Gator, but somehow this one is stamped top secret. Not because it has a $71 target and a $30 scenario, surely.
Based on the details of the Westlake report, it is a much more bullish report than would appear just from the "Base Scenario" target of $71, and the "Bull Scenario" target of $91. The $71 target is based on extremely conservative assumptions and aggressive risk probabilities, and those are actually pretty conservative and aggressively risked for the $91 target also. Furthermore, using the GLJ resource estimates and data for a two-train LNG project with high capex similar to PNG LNG, he arrives at an unrisked NAV of $131 per share on a PRESENT VALUE BASIS. They are the only source I know of at this point that is calculating a value for IOC's 30% interest in an LNG project.
The $71 base scenario assumes only a 75% chance of achieving only 7.5 Tcfe of resources, only a 75% chance of achieving FID on an only 4.5 mmtpa plant (one train), and only 40% and 10% chances of achieving FID on 7 and 9 mmtpa plants, respectively, and no chance of any bonus discovery at all.
The $91 bull scenario still assumes only a 50% chance of achieving 10 Tcfe at PRL 15, only a 50% chance of an only 5 Tcfe exploration discovery at PRL 15, and only a 20% chance of a 9 mmtpa plant (two trains). All that heavy risking still adds up to $91 per share, on a PRESENT VALUE BASIS!
He also points out likely near-term "Future Catalysts", including closing transaction with Total, potential Oil Search farm in with Total's share, EXPLORATION WELL RESULTS, buy out of the Minority Interests / IPI Holders, and possible disclosure by government of results of past resource report by GCA, an approved firm for agreement.
It's as if the analyst, after being burned on a published target, wants to build into that very conservative assumptions and heavy risking with plenty of room to change those and raise targets as we go.