Oil Search Valuation & Target Price, page-499

First 499 Last

Share
Profile

Follow
sircorp

8,355 Posts.

95

24/06/16

10:27

Post #: 18110045
Share

Originally posted by sircorp ↑

In Long Term, Interoil Take Over is a Excellent for Oil Search Share Holders(If ELK & Antelope resource are above 6.2 tcf). However, in Short to Medium Term, it will dilute Oil Search EPS from 15% to 20%. Here is my assessment(I could be wrong)
..
1) Interoil was not able to pay even for drilling for Resource Appraisal. They were looking to sell assets from long time, and Debt is around, US$250 Million plus, without any income what so ever. Two years back Inter Oil Sold Assets(Resources) to TotalSA that source of income has now dried up.
..
2) As per my understanding(I am not an expert) Inter Oil Debt of US$250 Million will be transferred to Oil Search(as part of 100% takeover agreement). $2.2 Billion Taker Over Price with US$250 Million Debt
..
3) TotalSA will pay US$1.2 Billion to Oil Search($141 Million + US$250 Million Later for selling 60% of Interoil Back to TotalSA. My understanding 141 Million will go to UBS & others who are managing the takeover process), out of 1.20 Billion, US$250 Million will go in Inter Oil Debt Repayment, plus some money for Retrenchment/Employee benefit Employee Payment. Only US$770 Million will be used for Buy Back of Shares.
..
4) CVR will go directly to Inter Oil Share Holders. CVR is attached to Inter Oil Shares not Oil Search.
..
5) If you add up everything, a total of US$1.6 Billion payment from totalSA minus $250 Million Inter Oil Debt & 700 Million for shares buy back, Net Transaction is Positive for Oil Search but that will happen from 1 July 2017 onward.(141 Million plus 250 Million is conditional and paid in July 2017 onwards
..
Inter Oil Assets may be great but that will be known once we know Net Resources.
..
.. Oil Search Estimate is around 5.9 to 6.2 tcf gas in Elk/Antelope while Inter Oil Estimate is almost double of that. Resource Modelling can have Large Errors too(Consultants/Employee are Loyal to their Pay Cheque Master).
...
In Short term, Inter Oil Acquisition will have EPS Dilution.

Expand

Every time Oil Search Trades above $7/share there is stampede to sell, race to who gets out first. Some reason or other Big Fellows/Fund Managers dont have belly or appetite for Oil Search. Probably PE too high
..
IOC Acquisition Dilution, Depressed Long Term LNG Pricing, High PE are few basic reason.
...
Either Oil Search MUST some do Oil Producing Acquisition to its portfolio. PLNG Train 3 and train 4 is 5 years away.
...
Does not make sense to sit on Massive Pile of Cash ( more than 2 Billion) and not use it for acquisition.

OSH Price at posting: $6.74 Sentiment: None Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

WC8

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

HotCopper Highlights: Your most watched stocks for Week 48, 2024

Ice-cold winner: Cryopreserver Vitrafy escapes November's IPO struggles to end debut week higher

MIN

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

ACW

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

Week 48 Wrap: ASX flirts with 8,500pts; APRA declines mortgage loan easing; Trump's Bessent tied to Dem donor

ADD

Parkes Au-Cu project to 'transform' Adavale Resources with key targets

RSG

Resolute shares bounce back as second payment made to Mali government to secure workers' release

History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

Dale Gillham's weekly wrap: Bold moves in NZ, caution in Australia

There are more pages in this discussion • 104 more messages in this thread...

First 499 Last

Add OSH (ASX) to my watchlist

Oil Search Valuation & Target Price, page-499

Top Stories

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

HotCopper Highlights: Your most watched stocks for Week 48, 2024

Ice-cold winner: Cryopreserver Vitrafy escapes November's IPO struggles to end debut week higher

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

Week 48 Wrap: ASX flirts with 8,500pts; APRA declines mortgage loan easing; Trump's Bessent tied to Dem donor

Parkes Au-Cu project to 'transform' Adavale Resources with key targets

Resolute shares bounce back as second payment made to Mali government to secure workers' release

History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

Dale Gillham's weekly wrap: Bold moves in NZ, caution in Australia

Featured News