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InterOil Corporation Message Board

  • pittsburghnorm74 pittsburghnorm74 Jul 6, 2014 7:25 PM Flag

    Things I like from the recent Macquarie report

    Macquarie's recent report was posted on SHU. Two things stood out to me that bode well for IOC. First, "As with PNG LNG, Antelope LNG looks set to benefit from attractive fiscal terms, low onshore development costs and respectable liquids yields. This drives an attractive estimated IRR of ~24% and a breakeven price of just $7.9/mmBtu at Antelope LNG – both extremely competitive for a greenfield project.".

    Second, "With U$400m of upfront proceeds from the PRL15 sell-down, an enlarged U$300m bridging facility, the likelihood of a considerable future resource payment from TOTAL and a ~U$125m (gross) back-in payment from the government, IOC looks comfortably funded through to FID on Antelope LNG (especially given its significant carry in the current drilling program). After this, we expect the LNG development to be project financed suggesting IOC may have largely managed its funding pressures."

    24% IRR and a breakeven price of $7.9/mmBtu means that this project is going to be developed. Also, IOC's cash position is vastly improved so the posters who previously worried about that don't have to fret any more:)

    Sentiment: Buy

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