Friday, December 6, 2013

The Interoil-Total deal

Interoil - an oil and gas company with operations in Papua New Guinea - is a controversial stock. And there are reasons - today demonstrates just some of them.

Interoil did a deal - maybe a very important deal - with the French oil major Total.

The problem is that the press release issued by Interoil is dramatically different to the press release issued by Total.

This link is the Interoil press release.

And here is the Total release.

After reading these it is seemingly impossible to even agree on the facts.

No wonder genuinely held opinions differ.



Unknown said...

Total was always perceived to have returned too much capital to shareholders and not invested enough in future production. I guess InterOil is what you get when looking for girls to dance at 3am in the morning. That said IOC has R Chandler sitting in its corner, albeit he screwed up on SinoForrest, I never would fancy being short against R Chandler, he makes Warren B's track record look average given he apparently doesnt leverage and nor does he sell float (premium) all day long or write fanciful puts. However like Warren, Richard does get deals you or I can not... see GDG LN for example. Maybe Total should cast its eye to Persia per Eni, Tehran safer than Port Morseby

Robert in Chicago said...

Based on comments during the conference call, the two releases can be tied together. Total's number assumes IOC's low resource number (3.5Tmfe), and it assumes that the parties do a back-end sale of part of the interest and nets out Total's proceeds from that sale. If you gross up Total's number for the assumed back-end sale, you get $1.5B, the same as IOC's low-end number.

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