Come on raiseyou, I'm trying to get a rise out of some folks. I don't appreciate your sound logic and rational thinking. Please cease and desist.
I'm not prepared to go there yet. But I'm starting to formulate a preliminary hypothesis that $100,000 per month Hession might be a train wreck. His free passes are about up. And "I am not Phil" only goes so far. Not being Phil still allows for being the second-worst CEO in modern history.
I love how Phil seemed to only care about the share price, and Hession doesn't seem to give a frack about it. With $100,000 per month tumbling in the door in base salary why would he worry too much?
Ho Ho HO! It's great stuff MS. I know exactly who Indoreservoir is - I would never out him but let's just say he is in the industry as he purports and is worth reading.
I had a very long and cordial exchange on Seeking Alpha in the comment section of STP's article titled "Interoil's Increasing Value Proposition". We really got into a bunch stuff and had a great discussion. So much so that the SHU nut crowd were carrying indo around on their shoulders as the "Bonkslayer" and there is a whole thread dedicated to it.
Palm noted "Seems to know his stuff and does great job of explaining using examples based on his experience."
Art noted " I read the first 65% then the last 5% of 'the great debate' involving Bonk, Indoreservoir et al" and "I certainly agree a meaningful discussion is best to understand the opinions of others, and certainly appreciated greatly the insights given by Indoreservoir. His review of the technical viability of IOC's resource claims and his cautions with respect to the politics of PNG were comments well taken that likely would not have been revealed in the absense of a debate. On the other hand, the short arguements provided by Bonk et al were tiresome to read for the upteenth time."
But eventually, after joining SHU and offering a few sober facts (like the success rate of wells) and other level-headed blasphemy, the nutters like Getit went bonkers (pun intended). It's even more fun as Hession came out and used the same well success rate shortly after Indoreservoir.
With shorts having more or less moved on (in fact supporting the stock with their covering), and the stock slipping slipping and back in the 50s, while the market makes record highs, it's truly enjoyable watching fools like Getitwrong twist in the wind.
If that doesn't deserve a Ho Ho HO! I don't know what does, other than making a fortune on NQ puts :)
If you Google "Yermack" and "Yuanzhi Li" (of Stern and Temple University, respectively), there is a great academic paper they put out through the National Bureau of Economic research called "Evasive Shareholder Meetings"
Amazing, yet not surprising in what they concluded, and it made me immediately think of IOC and the Spinnaker Lounge. They found shares underperformed when meetings were held more than 1,000 miles from HQ, and it gets even worse when more than 80 kilometers from a major airport. A few choice tidbits:
" They found “a systematic pattern of poor company performance in the aftermath of meetings that are held a great distance away from headquarters.”
"Companies appear to schedule meetings in remote locations when the managers have private, adverse information about future performance and wish to discourage scrutiny by shareholders, activists, and the media. However, shareholders do not appear to decode this signal, since the disclosure of meeting locations leads to little immediate stock price reaction."
"Rather, when companies have news they would like to muffle, they hope that moving the meeting to an inaccessible location will help them evade prying questions from the hostile shareholders and financial journalists who follow them closely. "
Good ol' Phil. I miss him.
With much of the Total cash being depleted on drilling, Wahoo seemingly about to be abandoned for "safety reasons", I would not be at all surprised to see IOC back in the $40s. Major drilling success could support it up here in the high 50s though.
The current price makes total sense to me. Not nearly cheap enough for me to buy it but I don't think it is at a very unreasonable level here.
Enjoy your day.
"I guess your goal is to try to blur any piece of positive info for ioc."
Nope. My "goal" is to point out tidbits of helpful information as I come across them, and occasionally counter nonsense with facts.
" when any company sells the assets of a subsidiary, not its equity, the sales price is the gross sales price which includes any assumption of debt."
In this case they sold the equity, not the assets.
From the SPA "The Seller has agreed to sell and the Buyer has agreed to purchase the Shares, on the terms and conditions set out in this document". The name of the document is "Share Sale and Purchase Agreement".
Even the muppets on SHU cooed about the $525 and there was clearly ambiguity.
Frankly I found the press release misleading "Interoil sells downstream business for US$525.6 million". Technically accurate but when half the proceeds go to others and the SPA purchase price (that nobody reads but people like me) clearly states $242.5M.
Regarding your nutty car analogue, the point isn't what number is technically correct, the point is that by omitting critical deals investors were forced to make their own assumption and most muppets got it wrong. What IOC should have done is simply state :Net proceeds to IOC of X$ are expected after adjustements". Instead we got a shady "which includes adjustments for cash and working capital" with zero explanation.
Which would you have preferred?
As usual, if you scratch beneath the surface of an IOC press release it's deflating. On this point many companies are guilty though, such as NQ Mobile.
The refinery SPA is up on SEDAR. The schedules are excluded but the purchase price of the refinery business is clearly about $245M, with a 10% ($24.5M) deposit. They are taking over the debt of the subsidiaries so this is how they are grossing it up to $500M+. It's not clear how much, if any, of the assumed debt would be inter-company loan from parent IOC and how much is external to Westpac and others (remember they mortgaged the refinery recently).
In December I estimated the going-concern value of the refinery business at $327 million - seems Puma is getting it for a bit less.
Still good to get the cash though.
Two 13G/A filings from Altimeter today. the first was for June 25 showing 28.1 million shares. The second filing for today (July 3) shows ZERO shares. The only own some worthless no-bid call options now.
You are a fool. There were two 13G/A's filed by Altimeter today. the 28.1M shares + 1M call options were for June 25. The filing for today, July 3, shows ZERO shares.
The 1M options are obviously worthless and no bid.
Altimeter isn't too worried now as they just unloaded all of it.
"Interoil is trading at a 65 percent discount to their value"
Kenny, you numbskull. Macquarie's price target is $80 based on their DCF valuation of $82.51, making it about a 22% discount "to their value". And the $80 is their 12-month target.
The $171 per share is their "unrisked NPV". Only in Kennyland has risk been banished.
$77 of the "unrisked NPV" relates to Antelope Deep-1, Raptor-1, Wahoo-1, and Bobcat 1.
Heck they even assigned a $15.15 "unrisked NPV" amount to Wahoo. That's $750 million for a well that IOC can't even drill out and the CEO is telling you they may abandon for "safety reasons".
They even ascribe $17 of "unrisked NPV", or $850 million to the midstream and downstream ops that they just sold for $525M literally the day after the Macquarie report (and of course the $525M may include debt and other adjustments so we don't know the net).
You're just going to have to make your peace with the FACT that IOC was previously outrageously overvalued, and is only now, in the post-Mulacek era, in the realm of reasonableness.
Do you wonder why so many of your fellow longs despise you so much now?
Since Antelope in Dec 2009 IOC has an annualized total return of -0.33%. $100,000 invested in IOC on Dec 2, 2009 would be worth $98,500. $100K invested in the S&P then would be worth $190K.
By the way a few days after that in 2009 you wrote " Appears they should learn to do DD. I will teach a class for them at the PNG Yacht Club Party IOC at $100 a share..All welcome"
"No because it traded under a different ticker and message board is now gone. I think you were short in early 2000. LOL you say "late 2009 when the stock was around where it is now" How convenient!
I call that rubbish!"
Whatever you say, nut. I remember you back in 1985 selling crank at the Twisted Sister concert. I took a Polaroid of it but I spilled my twist shandy on it. How convenient for you.
"On Stockhouse? bonk people remember you before yahoo."
Ummm, ok. Can you point me to any stockhouse post on IOC before late 2009? No you can't. I first heard of Interoil at an investment conference in Oct 2009. It was presented as a short idea. I believe the title was "IOC: the next Bre-X?" Take a wild guess who presented it.
Great post jdeo. I feel the biggest thing I was wrong about is Phil. I thought they would NEVER get rid of the guy and used the formula:
IOC = Phil = IOC.
Definitely a new era at IOC. I think most of the angst people have now is frankly because IOC was very overvalued in the Phil/hype days.
If Hession took over when IOC was at $30, signed the deal and it went to $40, and then drifted up to $50, he would be viewed as a hero by now. IOC had to grow into its valuation. It still needs to IMHO (full disclosure I went short on the opening bell yesterday after reading Hession's remarks and covered this morning).
At a 6.5 TCFE level I valued IOC around $43. That is definitely a possibility (the 6.5 TCFE) here. It could be less or more. But a chunk of that value has now been poured into these 3 wells (maybe $300M by then end?). If they come up zeros that is perhaps $5-6 wiped from the value.
Very high level I would baseline IOC around $40 right now, with about $20 of "hope" in the stock - with the $20 either having to be filled by exploration wells (dicier by the day) or the final E/A number. That $20 is around $1B in present value.
I think the range is about $40-$80 and we are smack in the middle of it right now. Sometimes the market gets things right.
Better shorts out there, but better longs as well, IMHO.
"Did you know back when Interoil was trading in the single digits Eric, bonk and Tonka were the lead shorts?"
That's rubbish. I didn't start terrorizing you until late 2009 when the stock was around where it is now. Look it up.
Well put VS. I'd also note that the narrative now is that IOC will never need to tap the capital markets again (with all the resource payments) so little need for a "VP Capital Markets". Basic IR should be enough.
There is little reason for management to hype or pump the stock now. I like Hession's style. E.g. if the wells aren't going well, are way too late, and way over budget - he comes right out and says so.
Ultimately the value will be determined on what is delivered. Nothing more, nothing less.
IMHO the recent pumping about the wells and smacking around folks like indoreservoir who dare point out that drilling success rates are low was counter-productive.
I think Hession was trying hard to downplay the drilling odds all along (to his credit) but Pavlov's dogs can't help but revert to drilling in the Phil days. Back in tha day the cold hard reality of drilling would have been replaced with Cheshire Cat smiles, winks in the Spinnaker lounge, and whispers of oil.
Full disclosure I am short here for a trade.
Sentiment: Strong Sell
FYI PRKR's lawsuit was thrown out yesterday and the stock is down 70% in two days and I was loaded to the gills on puts and outright short. I'm in a good mood today funkensteinn, how about you?