That a buyout rumor circulates, again, on an options-expiry Friday. No complaints at all, yet somehow every downtick is "manipulation", and "shorts and thieves at work". Heh
As to a buyout at $4B it ain't happening anytime in the next 6 months. I guarantee it. If Total and OSH are paying prices that value 100% of E/A at $3.9B, what fool at Woodside or anywhere would pay $4B for a third of it, especially before delineation wells?
Regarding PNG politics I am less sanguine. It's been quiet of late but the next election is in July 2016. That is only 20 months out. We know from experience what a circus it is.
The big worry for me on the political front is now that PNG LNG is up and running, the dollars will really start to flow (and will ramp in the coming years as Exxon/OSH recoup their costs from production). So whoever comes out on top in 2016 will be sitting on a 4-year gold mine of corruption opportunity. Frankly I think the country could eat itself alive (pardon the cannibalism pun) over this. We know it's one of the most corrupt places on earth so things could get VERY dicey.
Exxon/OSH have political risk insurance from the Japanese and elsewhere. Total may be able to secure it as well, and I have way more faith in Total being able to navigate it vs. Trainwreck Phil but it could be pretty interesting. Don't forget Gulf Province has been promised an LNG plant - what happens if they build in Port M etc.
Not much point in speculating now, but the politics here are not to be dismissed.
What makes this even more idiotic (if that were possible), is that you are quoting from a Credit Suisse report on SHU and tout "Page 5-GCA estimate Dec 2013 7.0 T's of gas." as a bullet point.
I'm sure Keubiko would say that one of the reasons he likes to write on IOC is as a public service to those being spoon-fed tripe.
The 2011 GCA report without A-3 had a 6.6 Tcfe figure. It was updated in Dec 2013 for OSH and the PNG government, a full year after A-3, which is why it was revised upwards slightly to 7.1 including condensate. GLJ's moved up slightly as well.
You are a fool.
Now tell us again how IOC is worth $3.9 Billion because E/A is worth $3.9 Billion, forgetting that IOC owns only a third of it now.
Do you really think "your" (nod to moose) helping?
Not only is he embarrassing himself and others but being off by a year on the GCA report, now he is saying:
"OSH made this bet on Interoil
Oil Search paid $900 million cash for 23 percent of Elk/ Antelope plus agreed to pay another .77 cents per mcf over 7 T's. Assume the worst there are no more assets found. So using OSH paid in amount the Interoil is worth $3.9 billion today . Whats the current market cap ? Answer $2.3 Billion. Or based on the OSH price paid Interoil today is worth $77 a share. Was Botten wrong??? OSH's Botten also sees upside if they win the arbitration with Total .
Mr Market will figure this out."
Kenny has just inadvertently agreed completely with the Seeking Alpha article. He uses $900M / 0.23 to value IOC at $3.9 Billion. BUT he forgets that IOC has sold 40% of E/A it to Total now and IOC only owns 36.5% - so that wacko math is actually $1.4B, not $3.9B.
"Stick to the facts" indeed....
I'm sure the author would appreciate your compliment. IMHO if one were "desperate" to bring down the price of IOC, one would make a stronger argument along the lines of:
Total is only willing to pay for 3.5 Tcfe up front.
There is a material chance that a disappointing A4 and A5 will peg it there
The money IOC has received from Total is all they would get in such an event
That money is being flushed down the toilet on risky expensive wells that are months overdue and one already suspended
There is no refinery or downstream to fall back on now
The convert is due next year
Zero is not out of the question
That's what I'd argue if I were desperate to bring down the price.
Ho Ho HO
Note Hession's discovery "bonus" is a dollar amount but it is paid in stock. He's actually been given an economic incentive to take the stock as low as possible, so the moment he gets his $500K discovery bonus he will get the maximum amount of shares.
Hession is smart enough to own IOC, just not with his own $100K per month base salary.
The full handle was "Stpioc" the STP portion was the ticker for Suntech power. He pumped STP and IOC originally hence the handle "Stpioc" which is both tickers combined.
STP is bankrupt (the solar firm, that is). Investors lost 100%. Not sure about Stpioc though - investing in STP, IOC, NQ, DSNY, XXII, ANY! etc have been rather costly to a portfolio. No wonder he's bitter. To be fair every has losses but when the majority of your portfolio has to fend off serious fraud allegations one might revisit one's underwriting.
Rather than debate DSNY on Seeking Alpha he has retreated to SHU where he has created a Keubiko shrine - a whole message board thread apparently written for his own mental health where, in his own mind, he has debunked the thorough drubbing that Keubiko layed out, without having to worry about a retort. That stock is down about 70% from the Feb article where the alarm was raised, but who cares about the scoreboard?
With respect I see little chance of a buyout now. People seem to forget that IOC has already sold E/A to total (yes they've retained a piece but have ceded control of the development).
Outside of E/A what is there, really? Some minor gas at Triceratops, and "exploration upside" that nobody will pay for, especially given what a train wreck the drilling is so far (IMHO).
Why would Total buy IOC when they already have E/A on the cheap - no chance of them buying IOC until A4 and A5 are drilled.
No supermajor will buy IOC because all they would get is a minority slug of E/A at a higher price than Total paid with no control.
All IMHO of course. Selling the company now would be a disaster and I doubt they'd clear $50.
My prescription is:
1) Farm out majority interests in all remaining acreage - let others burn the cash while retaining a stup position.
2) Focus 100% of remaining effort on E/A and advancing the LNG efforts. Perhaps a stab at Antelope Deep as a final hail mary - should have done that with the $50M buyback money.
IMHO IOC had no business whatsoever buying back stock. With zero revenue, an enormous cash burn, and potentially a massive investment to be made in an LNG plant it was a huge waste. They could have drilled another well for that.