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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: teevee who wrote (180109)	8/18/2013 9:10:16 PM
From: akmike	4 Recommendations of 206332

Political risk in PNG is too high? XOM and partners are spending $19+billion on a two-train LNG plant. And you would avoid IOC that is negotiating a sale of a minimum of 4.6TCF of gas which at $1/mcf (below the regional average of $1.20/mcf) values IOC at $100 per share just on the 4.6TCF alone. Should XOM recognize the IOC NG at a price of $1.50/mcf reflecting economics attendant to the very high flow rates of the IOC resource and the proximity to XOM's pipeline (that S & P kindly pointed out to you), creating a market value of $150) for IOC without consideration for Triceratops or their 3.5 million acres of other reefal prospects, what are you saying is the market value for this resource-rich company? Is it your position that the "political risk" of PNG trumps a take or pay contract with XOM? Should the XOM transaction proceed then IOC's future exploration wins (if any) will not be stranded gas, but booked reserves. Are you saying that PNG political risk will eliminate the value of such reserves? If you are short, I think you have over-estimated PNG "political risk".

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