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From: CommanderCricket	4/30/2012 3:14:00 PM
	2 Recommendations Read Replies (1) of 178586

Morgan Stanley comments on the IOC farm-in. shareholdersunite.com Today’s sell-down of an interest in block PPL237 provides resource value and improves IOC liquidity. Impact on our views: Today’s sell-down relates to PL237, including the recent T-2 discovery, as the Elk/Antelope sell-down continues. The sell-down is important to IOC for three reasons: (1) it establishes the value of IOC’s upstream resource in Block PPL237 at potential value over 4x what is currently implied by the share prices for Elk/Antelope resource, (2) solves potential funding gap in 2012 (cash/carry), and (3) provides leverage in on-going sell-down and operatorship negotiations. Today’s sale price will be $2.65/mcfe for 2C resource after final appraisal is complete, above the $2.41 implied by the Mitsui off-take in 2010 for Elk/Antelope, which compares with the implied price for resource in IOC shares estimated at $0.51/mcfe (IOC current 2C gas resource (9.4Tcfe *58.6%) /public market cap as of Friday ($2.8Bn)). The sale provides IOC with up to $345MM of cash, based upon closing conditions, which is necessary with $108MM of cash/cash equivalents/restricted cash on IOC’s balance sheet as of 12/31/11.