Yea but you wrote that the rigs might be deployed in the Elk-Antelope fields. The company earlier said that their rigs might not be suitable as roads are getting constructed.
Sorry I'm not the author of the article. My understanding is, since the private spinoff is called off, they are probably going to do a normal spinoff and my guess tmis they are trying to make this PNG business as unappetizing as possible so the insiders and Cyrus may still get a large slice of the pie (depending on the deal structure of course). So they are now saying they are not sure about the timeline of the total project and roads may be built so their rigs may no longer be required etc. Look at the $20mm rightoff they took last Q. They made some serious doomsday assumptions and assigned a 25% discount rate IIRC, which is some pretty crazy stuff
My understanding is that the current Elk-Antelope project is going to have more roadways built due to the size and complexity of the project. I asked about how competitive the heli-portable rigs would be relative to land based rigs. They did say they would bid and think they have a decent chance of winning a contract. Although the activity levels with multiple rigs being deployed like in the past may not be an appropriate benchmark.
The timeline of the project is out of their control and really up to Total and Exxon. The project would have required roads regardless, so how much of this is them trying to lower PNG expectations due to the reorg is something I don't know.
I do think they are trying to temper expectations of a PNG revival. The recent write down of assets seems pretty ill-timed due due to the reorg. It looks bad that it wasn't done before the reorg and before the Elk-Antelope project was this far down the project timeline. I would have assumed that any meaningful adjustments would have been at the end of the year with the fully audited statements. The CFO transition also is a bad look.
As for Cyrus, I'm not sure what their position is. I am sure that they would want the 38.2 million distribution. After that, I would assume that they would prefer something with liquidity for the PNG business. But I don't know that for sure. Cyrus has experience with a variety of securities so maybe a private company is fine for them.
Regardless of all this noise, had a decent proposal been presented to shareholders in May last year then they would have all this behind them. Even if it wasn't perfect or ideal, had they just provided a listing on another exchange or a reasonable valuation for PNG they would be able to focus 100% on the business and not the reorg distraction.
Still think there is low risk from here, but high uncertainty. Just my thoughts.
Well said and thanks for the additional details. Agreed that its low risk and high uncertainty. Unfortunately, whatever the outcome is, we all have to admit that the stock/company essentially spent a whole year doing absolutely nothing and whatever our projected IRR was is now lower
Activism sounds like a giant headache.
Thank you for attending the meeting in person.
I find it funny that VN thought they had an understanding with Cyrus who then voted against their proposal...
Yeah someone is playing 4D chess here. It's not me though.
What you’re saying is there might be a roadmap to deploy the rigs for the Papua LNG project ?
That's what the company has been saying except their partners timelines kept changing
Yea but you wrote that the rigs might be deployed in the Elk-Antelope fields. The company earlier said that their rigs might not be suitable as roads are getting constructed.
Sorry I'm not the author of the article. My understanding is, since the private spinoff is called off, they are probably going to do a normal spinoff and my guess tmis they are trying to make this PNG business as unappetizing as possible so the insiders and Cyrus may still get a large slice of the pie (depending on the deal structure of course). So they are now saying they are not sure about the timeline of the total project and roads may be built so their rigs may no longer be required etc. Look at the $20mm rightoff they took last Q. They made some serious doomsday assumptions and assigned a 25% discount rate IIRC, which is some pretty crazy stuff
Thanks both of you for the discussion.
My understanding is that the current Elk-Antelope project is going to have more roadways built due to the size and complexity of the project. I asked about how competitive the heli-portable rigs would be relative to land based rigs. They did say they would bid and think they have a decent chance of winning a contract. Although the activity levels with multiple rigs being deployed like in the past may not be an appropriate benchmark.
The timeline of the project is out of their control and really up to Total and Exxon. The project would have required roads regardless, so how much of this is them trying to lower PNG expectations due to the reorg is something I don't know.
I do think they are trying to temper expectations of a PNG revival. The recent write down of assets seems pretty ill-timed due due to the reorg. It looks bad that it wasn't done before the reorg and before the Elk-Antelope project was this far down the project timeline. I would have assumed that any meaningful adjustments would have been at the end of the year with the fully audited statements. The CFO transition also is a bad look.
As for Cyrus, I'm not sure what their position is. I am sure that they would want the 38.2 million distribution. After that, I would assume that they would prefer something with liquidity for the PNG business. But I don't know that for sure. Cyrus has experience with a variety of securities so maybe a private company is fine for them.
Regardless of all this noise, had a decent proposal been presented to shareholders in May last year then they would have all this behind them. Even if it wasn't perfect or ideal, had they just provided a listing on another exchange or a reasonable valuation for PNG they would be able to focus 100% on the business and not the reorg distraction.
Still think there is low risk from here, but high uncertainty. Just my thoughts.
Well said and thanks for the additional details. Agreed that its low risk and high uncertainty. Unfortunately, whatever the outcome is, we all have to admit that the stock/company essentially spent a whole year doing absolutely nothing and whatever our projected IRR was is now lower