Deal with Exxon to close shortly (could be two months of course, but who cares now)
Exxon will fully carry drilling next 4 Wells. Staged payments for resource, last payment after 4 Wells drilled and total resource re-certified. Meaning probably 3rd quarter 2014.
Thereafter, it doesn't matter when this LNG train goes into production. IOC and partners fully paid up for resource.
Assuming very conservatively 8TCF resource, Leaves IOC/partners with 3,5TCF to do Gulf LNG plant. Meaning at least 2 million tons LNG p.a.
Let's not forget the 130 million barrels of condensate, which Exxon may split in the Gulf or at Antelope and ship to the IOC refinery, making that one hugely profitable.
By drilling aggressively the Triceratops discovery and the other structures for which IOC spent tons of money on seismic already, there WILL be more gas found, which will all go to the Gulf LNG, where Exxon may or may not want to participate in. If XOM so choses, it will be on IOC's terms.
By the end of the decade Gulf LNG might produce 5 to 6 million tons of LNG, with corresponding huge cash flow for IOC/partners.
As the original press release mentioned that payments by XOM will be made also DURING production, this must mean that IOC either gets a royalty or swaps some gas for a direct interest in the XOM plant.
Fact: IOC sometime next year could have $ 50 per share in cash, and still own enough gas to do a substantial LNG development in the Gulf. PLUS, any gas it then finds goes to ITS OWN plants in the Gulf, with corresponding cash flow for the next 20 to 25 years.
IMHO a good deal. And once the SPA with Exxon is signed, IOC/Partners can take that contract to the bank and get funding. After all, the Gorilla signing off on it is somebody called Exxon.
Sentiment: Strong Buy
great set up now.. give some cushion here. now it is few months. Pick had this in January now he backs off. Then comes 60 day event -- now it will be few months but hey who cares... it will go up one day... aren't you guys tired of getting peed on and being told it is raining... set up for when the next deal does not close. .. LOL two months.. hey right and when that does not come what will you say then?? Such BUll sheet.. you are fools to wait while they take big bonuses and issue the shelf since they " will just get it back" yea right.. that is the next bombshell.. we have to issue more shares but in the long run it will add shareholder value.. cough and say bull sheet...
Why would anyone invest in a company who cannot come clean with the reason for the recertification?
Why is there a need to recertify? They have logged well performance data already. Exxon is deliberately slowing the process, a process that ONeil wanted to see completed by now.
It does not pass the smell test. They are waltzing with words to hide past lies told.
If you have a stake for or against IOC, how can you know or understand so little?! None of what you said is true. They explained it briefly in the presentation. XOM wants enough for an additional train in the form of a percentage interest in PRL 15, but IOC believes there is more gas than the current certification, especially with the undrilled prospects in PRL 15, and wants to keep the amount in excess of that train's worth. Therefore, they requested and negotiated more drilling and recertification to provide in the SPA, which will not be delayed for it, for an adjustment of that percentage interest later. As they stated, "InterOil believes the best strategy to develop its resources is a dual-development path; which includes EMPNG at its PNG LNG facility, and an LNG facility in the Gulf Province."
Both IOC and XOM are in a hurry to get the deal done asap. I know this must be hard for you, but try to think hard about it.
InterOil Says Deal With Exxon PNG Unit Progressing as Planned
2013-06-25 12:22:46.637 GMT
By Arie Shapira
June 25 (Bloomberg) -- InterOil says all matters at annual meeting yday approved; sell-down w/ ExxonMobil Papua New Guinea
(EMPNG) progressing as planned.
* IOC, EMPNG, Pacific LNG engaged in finalizing binding
* AFTER TALKS, IOC AND PACIFIC LNG HAVE CLEAR PATH TO RESOURCE
MONETIZATION; PURCHASE OF INTEREST IN PRL 15 NOT CONTINGENT
ON RESOURCE RECERTIFICATION
Fact is, you are speculating just like everybody else at this point, beyond the statements in the first three sentences, if that. (BTW, IOC has never drilled a well in less than 6 months, including testing, and has never had more than one rig operating at a time, so it is highly unlikely that the resource will be certified by 3Q14.)
There'll be plenty of time to do that after the deal terms are revealed, at which point some of the current variables will have been turned into fixed facts.
All the speculative pumping hasn't done a thing for anyone, as it turns out, except to attempt to reassure vulnerable investors, after which their vulnerability is unaltered and still subject to market and voodoo forces.
Sentiment: Strong Buy
VS, apparently one of your guiding life principles is that the future is limited by past history. LOL. I have some doubts about your six months claim, but nevertheless IOC has never in the past had plenty of cash or XOM as a partner, a different future, I assure you.
Thank you for your take away. Everything on the surface looks great there are only two concerns I have.
1) timing to close and 2) How does this deal conform to the 2009 PA? I think that's why EWC and Flex were booted.
Timing very close and Duma knows this too.
The PA is really just an Agreement that fixed the fiscal terms. It said that IOC had to find a partner "with enough experience in managing similar size LNG plants". Well, if XOM doesn't have that experience than who has ?? The PA will have to be changed anyway now to allow for XOM and for Gulf LNG which is going to be the driver for huge cash flows for IOC/Partners and for the government. .
And don't forget that Kavo wants this and needs this. Plus XOM can seamlessly redeploy their workers from the first two trains at PNGLNG to the next two trains.