Was one of my most vicious and paranoid attackers. He basically told me I was going to jail because of my "underhanded activities" re: IOC (you know, like pointing out facts that are now proven, that they should do production and communication testing which they are now doingm, and so on), and also because of my "involvement with the illegal hit" on NQ Mobile, now a proven fraud.
I admit it is rich seeing him go off the hizzle.
"As of today, there is no Antelope 7 on the drilling program. Clearly if the joint venture decides, they need to need seven to target that upside and I think yes that would push the project schedule to the right."
Oil Search Says Expanding PNG LNG Easier Than New Total Project
" It’s easier to commit to a 3rd production unit at the Exxon-operated Papua New Guinea LNG project than making decision on a new LNG project with Total and InterOil, Oil Search Managing Director Peter Botten tells analysts Tuesday.
Committing to Total-led Papua LNG project in 2017 would be “very challenging,” Botten says on conference call"
"No one cares Gerald"
Well, they should Jdeo. Why don't you dispense with the ad hominem attacks and address the serious issues he raised - the LNG backdrop, and Total's ability and willingness to fund major projects.
Or how about the re-start of nuclear reactors in Japan. I read this from a well-respected analyst this morning:
"• A Potential Threat to Future LNG Demand Growth: With nuclear power coming back online in Japan, global LNG demand projections, which are the cornerstone for long-term projects could potentially be revised downwards. If the Japanese Ministry of Economy, Trade and Industry’s latest draft plan, envisioning 20-22% of the country’s electricity being generated from nuclear power by 2030, were to materialize, LNG imports to Japan will likely fall back to the pre-Fukushima levels. Securing long-term sales agreements for export projects in the face of such uncertainty could potentially become increasingly difficult. The state of the Japanese nuclear power sector is therefore, in our view, a key indicator to monitor for investors interested in the LNG space."
Just because IOC is trading where it was over 10 years ago in February 2015, has paid no dividend, and allowed Phil to cash out to the tune of hundreds of $millions doesn't mean you have to be so grumpy and saucy.
Nope I did take a punt in the $41s today but will keep a pretty tight stop at around $40. My reasons are on the poor side - more of a gut feel and hope of a snap back in energy. Sentiment couldn't be worse. I have buyer's remorse already.
You are double counting northerntrader. the 3,104,638 reported by Cohen includes the Point72 Capital Advisors amount of 3,062,610. The difference between the two is the Cubist piece which Cohen controls but over which Point72 has no voting power.
So it is more like 6.2%.
Still "bullish" as Cohen is smart and greedy. Chandler is dumb and greedy.
"""Exxon would likely still be waiting in the wings I would think to just add this gas to their plant. That would seem to greatly lessen the risk, wouldn't it?"""
I don't know about "greatly" but I think it is better than Exxon not being in the country with a running project. But if Total backs out Exxon might get a distressed price. Lots of moving parts and unknowns .
Phil Mulacek is the real clown here. He probably could have done something real in 2010 and LNG might be rolling off a train right now.
I am wholly unimpressed with Hession, in no small part from the fact that he spends none of his $100K per month salary on buying a single share of IOC.
Having said that, incentive structures are what drives most people. Hession gets a fat salary and a fat severence if they can him, and gets rewarded huge for taking a fat swing.
Simple example - IOC got what, $600M from Total? Say Hession had a choice between paying that out as a dividend, or plowing it into the ground as high risk drilling. In the former he gets almost nothing, but if the ladder works he gets some big $$. What door did he choose?
Blame Phil. Blame the board, and yes blame Hession. And blame Kenny and the other clowns that wouldn't listen to a lick of common sense or the data that was staring them in the face about what these deals get done at on a per mcf basis, or flow testing, or communication testing, etc.
Where is Sam Tibbs these days?
Hi Lib. I don't think you should be looking at it that way - namely because pricing at various levels of "T" is non-linear as there is HUGE variance in what the resource payment will be based on the certification.
For example at 5.4 TCF as the estimate, there is no resource payment, and perhaps no FID. But at 7.1 TCF they get $600M, and at 9.9 TCF they get $1.7B.
Any meaningful value above the resource payment is really contingent on FID, which at this point is far from certain.
I agree with mspieks that if Total thought there were any real chance of a 10 TCF certification they would make a buyout now. In fact if they were to do so they should have (or would have) bought Chandler's piece.
However, in this market I think they will wait until certification and know exactly what they are bidding on.
"""Good analysis although no mention of the POLITICAL RISK factor which is enormous."""
Absolutely. The provincial noise is troublesome. However I think the bigger risk is the next national election in 23 months.
I'm worried that with the PNG LNG / Exxon money starting to flow, control of that cash could tear the country apart.
If IOC were at current prices 6 months ago I would probably be buying here.
The problem is really the macro now. Other energy names (with far less risk) have become really cheap so riskier (albeit with potential for high reward) names like IOC are naturally getting discounted heavily.
At a $2.1B market cap, a 7.1 TCF resource certification, which would be healthy and not unreasonable, would yield about $600M or call it $12 per shares.
I think the market is basically saying it doesn't believe the higher numbers (e.g. 9.9 TCF which would yield $1.7B or almost all of the current market cap, or $34 per share - rough math).
The fact that Chandler and Wells are dumping (particularly Chandler) while the production / communication testing is going on is *perhaps* some indication of an issue on the ground. Maybe not though.
In any case, for the stock to be worth even $41 you need:
a) new massive, monetizable, discoveries AND / OR
b) big resource upside that the market seems to not believe (e.g. 10 TCF for E/A) AND/OR
c) the project to move to FID and buildout
Valuation is even trickier as rather than using that cash to fund project costs, Hession may very well flush it like he has on drilling to date. That is not necessarily stupid as it might have paid off (or could), but the market isn't in a risk taking mood.
IMHO what the market is really worried about here is that the project never gets done. Even if Total makes the resource certification payment ( and doesn't reneg, or delay forever, etc.), it is not full steam ahead at any cost. Past money is spent. It was a former CEO. Indications are that LNG will be weak and a buyer's market for years. Total has lost $60 Billion in market cap.
So I think what is creeping in is the thesis that the project doesn't move to FID or might get mothballed until 2025, or killed altogether. Nobody likes to walk away from cash, but abandoning a former CEO's project that was inked in Dec 2013 ( a lifetime ago)...
Those were the days.
InterOil Drops 1.8%; 4.8m-Shr Block Prices at $42, Fly Says
By Arie Shapira
(Bloomberg) -- InterOil falls 1.8% pre-mkt to $41.75-shr; 4.8m-shr block trade prices at $42-shr via Morgan Stanley, according to Theflyonthewall.
"Who bought 2-3 million shares in the last 72 hours?"
I think it was sprayed into the market for the most part. IMHO whoever took the other side of it (Morgan Stanley or via Morgan Stanley) bought at $45 and firehosed it on the market, and most of the 2.9M shares we saw yesterday were taking profits. Quick trade for some hot money and I think it ended up in a lot of places.
Nice little upgrade timing by Evan Calio huh? Upgrade with a $85 target and get to help Chandler unload.
I have to agree with you there tarules. Chandler, or whatever moron is running his book is a fool IMHO.
FWIW I heard along the way that the gump at Soros who was responsible for IOC ended up at Chandler. I could never confirm it though.