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Saudi Aramco IPO

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Re: Saudi Aramco IPO

Unread postby Cog » Sat 12 Jan 2019, 04:55:23

We are all going to be dead and buried before SA runs out of oil at current rates of production.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Sun 17 Feb 2019, 14:04:56

The Saudis have changed course again. Four years ago Prince Muhammad said Saudi Aramco shares would be sold in an IPO, and the money would be used to modernize Saudi Arabia and shift away from and to a "modern" economy.

Then the Saudis said the IPO would be delayed.

Then they said said the IPO would be delayed even longer while Saudi Aramco bought a chemical company.

Then they said the IPO wold be delayed even longer while Saudi Aramco issued bonds.

Now Prince Muhammad is keeping a low profile and Saudi Aramco just announced they are actually be EXPANDING its activity in the oil biz by going overseas and looking for new oil resources to buy and produce.

saudi-aramco-makes-existential-bet-oil

Image
Don't be surprised if Saudi Aramco buys some land and starts fracking in Texas.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sun 17 Feb 2019, 16:28:33

This from an interview with Amin Nasser, CEO and President of Saudi Aramco at the WEF in Davos a few weeks ago:

Just a few weeks ago, Aramco announced the results of an audit by DeGolyer & MacNaughton, the leading independent expert on the oil industry, which showed Aramco is sitting on a treasure trove of 263.1 billion barrels of oil within its concession area, higher than previous estimates. That was one of the essential requirements for the IPO.
“Everything that is required for listing is there. If the government decided, it could be done in no time,” he said. So why had it not happened?
Basically, Nasser explained, because an alternative strategic play came into view. Aramco decided there were more pressing priorities, especially a tie-up with SABIC, the Kingdom’s petrochemicals and industrial giant.
“We came to the government and said that our desire is to be the leading petrochemical company globally. We can do that organically or inorganically. We are always looking for opportunities in this field and we have huge investments in petrochem with Dow Chemical and Sumitomo. However, if you want to be the leader, you need an acquisition, a major acquisition. You need a platform, a good platform so you can go global, especially with our decision to have 2 million to 3 million barrels of oil going to petrochemical.
“So we approached the Public Investment Fund (Saudi Arabia’s ambitious sovereign wealth fund) to see if it was interested in selling their shares in SABIC, and they were interested. We have been in discussions with them and we went back to the government and said … based on our governance requirements and regulations, you cannot list Aramco while we are going through a major acquisition. It doesn’t work. That process needs to take its course, and the government said that’s fine. Because also you cannot list and then come in three or four months later and say you’re going to acquire a company. That would have to be in the IPO prospectus.
We need to close a share-purchase agreement and we’re in discussions now with PIF about that. When we reach an agreement we have to go and seek regulatory and antitrust approval. That will take almost until the end of the year 2019, or maybe a little bit more; we don’t know because you need approval from a lot of countries where SABIC has major operations. SABIC is not a small company, it’s a huge company, so you need a lot of approvals from lots of countries,” he said.
“After you finish that you need a minimum of one year to reflect the purchase in your balance sheet. It has to be consolidated and show what is the impact on our balance sheet — where is the integration, where is the value, because the investors will want to see … After that you can go to the market,” he said.
“It’s going to happen. There is no doubt the commitment is there, and it was also further confirmed by the Crown Prince Mohammed bin Salman and by the Minister of Energy Khalid Al-Falih. Both of them say the commitment for the IPO is there,” he insisted.


http://www.arabnews.com/node/1442461/business-economy
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Sun 17 Feb 2019, 19:25:56

... an interview with Amin Nasser, CEO and President of Saudi Aramco at the WEF in Davos a few weeks ago:
“Everything that is required for listing is there. If the government decided, it could be done in no time,” he said. So why had it not happened?
Basically, Nasser explained, because an alternative strategic play came into view. Aramco decided there were more pressing priorities


Exactly right. Thats exactly what I've been trying to explain to you for several years now.

In spite of your repeated insistence the IPO would happen in 2016, and then more of your posts and more insistence on the IPO happening in 2017, and then another barrage of your inaccurate posts insisting it would happen in 2018, in the real world the IPO hasn't happened yet. It has been postponed and delayed for years now.

“It’s going to happen. There is no doubt the commitment is there, and it was also further confirmed by the Crown Prince Mohammed bin Salman and by the Minister of Energy Khalid Al-Falih. Both of them say the commitment for the IPO is there,” he insisted.


Yes, of course, there is no doubt. Yes, if the government decides it can be done in no time.

Unless....and this is a big caveat.....unless another alternative strategic play comes into view again, necessitating another delay.

Then the IPO wil likely be postponed......again.

And what was it that KSA and Saudi Aramco said just a couple of days ago....why look look in my post just above. What do you know---- they just announced they have developed a new alternative strategic plan. Yes, there has just been a significant change to KSA/Saudi Aramco business plan. Now they are talking about expanding Saudi Aramco to take on new oil plays and opportunities in areas OUTSIDE of KSA.

It makes one wonder.....if buying SABIC caused a delay in the IPO as Saudi Aramco digested the new acquisition and updated their books, will taking on new properties and new oil developments OUTSIDE of KSA also require another delay in the IPO as Saudi Aramco digests these latest acquisitions and updates their books again and again?

Time will tell.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sun 17 Feb 2019, 21:22:33

Exactly right. Thats exactly what I've been trying to explain to you for several years now. 

In spite of your repeated insistence the IPO would happen in 2016, and then more of your posts and more insistence on the IPO happening in 2017, and then another barrage of your inaccurate posts insisting it would happen in 2018, in the real world the IPO hasn't happened yet. It has been postponed and delayed for years now


Are you done making crap up? Please show us where I specified a date that I thought the IPO would be done? I linked to various statements and spoke to what was being told to the world by Aramco and SA. And you conveniently ignored the part of what Nasser said regarding the fact they had not cancelled the IPO (which you claimed they had at one point) but that they could not complete it until the purchase of shares from SABIC was completed as it would require having to reissue the prospectus given that the financials of the company would have changed. Nasser actually lays out the exact timing required. He is the CEO and President...I guess you can ignore his viewpoints if you wish but he is one of the few inside of the tent who are speaking to the public about plans.

Unless....and this is a big caveat.....unless another alternative strategic play comes into view again, necessitating another delay. 


Yes anything is possible, the world could get struck by an asteroid as well or the Nashville Predators might win the Stanley Cup or Scotland might win World Cup Rugby. :roll:

Yes, there has just been a significant change to KSA/Saudi Aramco business plan. Now they are talking about expanding Saudi Aramco to take on new oil plays and opportunities in areas OUTSIDE of KSA


Exactly how is that exclusive of doing an IPO? In fact that would be exactly what you would like to do as a Publically traded Super Integrated Oil and Gas company which has been their goal all along.

It makes one wonder.....if buying SABIC caused a delay in the IPO as Saudi Aramco digested the new acquisition and updated their books, will taking on new properties and new oil developments OUTSIDE of KSA also require another delay in the IPO as Saudi Aramco digests these latest acquisitions and updates their books again and again


No they would not. The SABIC deal would require use of significant funds from ARAMCO’s warchest…they would be trading cash they have for equity and future cashflow which would have an immediate impact on their “point in time” valuation. On the other hand entering into a partnership agreement to explore or develop future oil and gas does not require anywhere near the amount of cash upfront (maybe a small signing bonus) and all they are committing to is future capital expenditures which has a much smaller impact (if any) on “point in time” valuation.

The point made in by Nasser and in many other articles is exactly what I have been saying...the reason they conducted the reserve audits and reorganized the corporation was in order to prepare for an IPO. If they weren't interested in doing the IPO they would not have done either.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Sun 17 Feb 2019, 21:30:20

....entering into a partnership agreement to explore or develop future oil and gas does not require anywhere near the amount of cash upfront (maybe a small signing bonus) and all they are committing to is future capital expenditures which has a much smaller impact (if any) on “point in time” valuation.


Thats a nice fantasy, but we don't know yet if Saudi Aramco will enter into one partnership, or several partnerships, or do a takeover and buy an existing company and their oil reserves, or even start up a global exploration program and buy their own leases and start up their own development program as part of their new plan to expand into overseas operations.

Lets just wait and see what they actually rather then making things up, OK?

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sun 17 Feb 2019, 21:35:35

enter into one partnership, or several partnerships


doesn't affect valuation at time zero

start up a global exploration program and buy their own leases


well first you don't "buy leases" you only get the right to explore and lift oil and gas. You pay an annual lease fee and commit to future expenditures, it is the same in every country I've ever explored in and that leaves very few left.

start up their own development program as part of their new plan to expand into overseas operations.


same thing. Committing to future expenditures whether they are exploration or development doesn't take money out of the bank at time zero.

The point is the SABIC deal and expanding overseas are not the same thing unless they were to decide to buy Marathon Oil, which ain't going to happen.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Sun 17 Feb 2019, 23:50:14

rockdoc123 wrote:...you don't "buy leases" you only get the right to explore and lift oil and gas..


How do you imagine you are going to explore and lift oil gas without buying the lease to the land? You can't just barge in there and take the oil, you dummy. You have to purchase the lease first. Only after you pay the requisite lease fees do you have legal access to the resources there.

Leases are sold at lease sales like these being offered by the BLM here in the USA

oil-and-gas/leasing/regional-lease-sales

Get it now?

Sheesh! How did you ever get along in the oil biz without knowing that?

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Mon 18 Feb 2019, 12:14:10

How do you imagine you are going to explore and lift oil gas without buying the lease to the land?


you should try to learn a bit about how oil and gas E&P works around the world before you start pontificating like you are an expert.

Companies do not "buy" leases in most of the world. By law in every country in the world with the exception of the US oil and gas along with mineral rights are owned by the country. A foreign company can acquire the rights to explore for and extract hydrocarbons either through direct negotiation or as more often the case participation in a bid round. In that effort, a company proposes a forward work program where they will agree to a minimum work program with associated capital expenditures. In many countries there is no upfront payment, all that is required is a commitment to the work program which is often backed up by an LC or similar instrument (unless the company is large enough to provide their own backing). In some circumstances, a signature bonus will be required which can be anywhere from a few hundred thousand dollars to a few million dollars usually dependant on the anticipated competition in the bidding round. The company will generally pay a yearly lease fee which is quite small along with other small fees for local education etc. That fee grants them access to the land for the period during which their concession grant holds (usually 5 years with a possibility of 1 or 2 year extensions) but they do not own the land/lease nor do they own the hydrocarbons. So as I said there is no large up-front investment in this case. How do I know? I did this sort of thing for over 30 years around the world.

Leases are sold at lease sales like these being offered by the BLM here in the USA


As I said the US has completely different regulations than anywhere else in the world but that being said the term “sale” is a misnomer given a company simply gets the right to explore for oil and gas on the acreage for a period of time, in the case of BLM it is 10 years at which point all oil and gas rights revert to the state. The upfront payment which is a competitive bid for the sale is quite small. As an example in Colorado last year the highest price bid per BLM acre was $1,000. Given the acreage available in the US is relatively limited the amount Saudi Arabia would pay if they were to win all bids (impossible) would be inconsequential given their enterprise value. As an example in the last Colorado lease round the total receipts were under a million dollars which included forward admin fees and yearly rentals. That is a drop in the bucket compared to the $70 billion required to purchase SABIC. And even if Aramco was interested in entering into the US they would not be looking at BLM lands but would have to be looking at freehold acreage. In that case, there is a relatively small payment to the landholder upfront and then an agreed upon yearly rental fee (small) and a royalty payment (usually around 20% - 25%). Their more likely method of entering the US (assuming they decided that made sense) would be to farm-in on a large piece of another companies interests. The way that is handled is generally that all forward work would be leveraged such that the buyer (in this case Aramco) would pay 100% of the Capex to gain whatever earned working interest they have negotiated (say 40% - 50%). Again this just requires a commitment for future expenditures and little in the way of upfront spend, hence having little impact on the financial analysis conducted for the IPO prospectus.

So, once again, whether it is in the US or anywhere else in the world entering into an E&P agreement through direct negotiations with the government or through an official bid round results in at most a trivial amount of upfront cash, especially when compared to the impact a purchase of SABIC would have on Aramcos immediate bottom line.

Get it now? :roll:
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 18 Feb 2019, 18:10:49

Companies do not "buy" leases .....


Of course they do. There are lease sales and companies buy leases at the lease sales. I even linked to a lease sale in a prospective petroleum area being held by the BLM just in case you'd never heard of a lease sale.

But you still don't get it. Thats not surprising really, considering your often comical obtuseness on many topics.

....an official bid round results in at most a trivial amount of upfront cash


Again, you just don't know what you are talking about. Yes, leases on land that has little petroleum potential often goes for a pittance. But leases on land that is highly likely to contain large amounts of recoverable petroleum can cost tens or even hundreds of millions of dollars per lease block.

Perhaps tens to hundreds of millions of dollars is a "trivial" amount of cash to you, but back here in the real world most folks would consider that amount of cash to be non-trivial.

Get it now? :lol: :-D :) :razz: :idea: :mrgreen: :roll:

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Mon 18 Feb 2019, 20:17:47

Of course they do. There are lease sales and companies buy leases at the lease sales. I even linked to a lease sale in a prospective petroleum area being held by the BLM just in case you'd never heard of a lease sale.

But you still don't get it. Thats not surprising really, considering your often comical obtuseness on many topics.


OK...when you "buy" something it means you own it. If you buy a car you own that car forever, you don't have a requirement to do anything with it if you don't want to, you can sell it without anyone's permission, you can paint it, or have it compacted...it's yours.
When you acquire an oil and gas lease...whether it is in the US or anywhere else in the world all you have is the rights to explore for a limited time period. In the case of state lands in the US it is 10 years, in the case of most places in the world it is only 5 years. You do not have the right to sell that lease, you don't have the right to tear up the land and do anything other than drill for oil and gas or shoot seismic, and at the end of the term, you lose all rights unless it has been converted to a production license which requires further future commitments.
In any event, no matter what you want to call it, the amount of money required upfront to win a bid or a lease is minuscule in terms of Aramco's bottom line. SABIC, on the other hand, would immediately take out a large proportion of their cash on hand and other equity and, indeed, they would be likely to take on debt. The former would not require significant adjustments to the Prospectus (it would hardly show up in Aramcos financial statements) but the SABIC deal would change it entirely. That is the point that Aramco's CEO was making and what I have been trying to get across.

But leases on land that is highly likely to contain large amounts of recoverable petroleum can cost tens or even hundreds of millions of dollars per lease block.


OK please show examples of this happening as of late. In the US the highest signature bonuses are related to the offshore continental shelf blocks. In the U.S. OCS since 1953, the average bonus has been $3.2 million ($627/acre). However, the average bid in the past 10 years since 1988 has been $0.5 million ($122/acre). This is insignificant. The highest signing bonuses I have seen as of late are related to the offshore Egypt Nile Delta where significant discoveries have occurred. Those range from $1.3 to $11 million, the larger ones being shared by 2 to 4 multinationals.
SABIC is $70 billion and would require taking on a large amount of debt. Taking on billions in debt alone changes Aramco's financial picture enough that it would require a re-write of the prospectus, but $70 billion is about 30% of the current valuation for Aramco. $10 million, on the other hand makes up 5 x 10e-6% of Aramco's valuation.
It doesn't matter what is or is not a "trivial" amount of cash to you....what is important from the perspective of the IPO and issuing the prospectus is what is trivial in terms of Aramco's valuation. And any sort of bid round signature bonus would fall in the category.

But feel free to try and change the subject once again...your go-to method for debate.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 18 Feb 2019, 21:24:02

OK...when you "buy" something it means you own it.


Of course. And when an oilco buys an oil lease it owns the oil lease. They don't own the land...they own the LEASE to the land. Do you get it now?

When you acquire an oil and gas lease...whether it is in the US or anywhere else in the world all you have is the rights to explore for a limited time period.


Yes, thats what the word "lease" means. It means the right to use something for a limited period of time.

------------------------------------------

I think we have now discovered two reasons why you have been objecting to the idea that oil companies "buy" a "lease."

(1) You didn't know what the word "lease" means, and (2) you didn't understand that leases commonly come with restrictions.

So do you get it now?? Do you now understand that (1) companies actually do buy leases at lease sales and (2) these leases commonly come with all kinds of restrictions on what can be done on the leased land.


In the US the highest signature bonuses are related to the offshore continental shelf blocks..... the average bid in the past 10 years since 1988 has been $0.5 million ($122/acre). This is insignificant.


Once again I have to correct your mis-statements. In 2016 Conoco Phillips bid 18.5 million for North Slope leases here in Alaska, and a 2018 oil lease sale in Alaska brought bids totaling 29 million.

SO do you get it now? As I already told you--- leases on the most prospective oil properties can run from the tens of millions to the hundreds of millions.

------------------------

Whew....thats three times I had to correct you in just one post. Would you be so kind as to accept the facts on these topics and not start going around and around on the same subject as you usually do. Its gets tedious having to correct your mis-statements on the same topic over and over again....I suggest lets go for an entirely new topic next time, OK? Please?.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Tue 19 Feb 2019, 17:12:18

I think we have now discovered two reasons why you have been objecting to the idea that oil companies "buy" a "lease." 

(1) You didn't know what the word "lease" means, and (2) you didn't understand that leases commonly come with restrictions. 

So do you get it now?? Do you now understand that (1) companies actually do buy leases at lease sales and (2) these leases commonly come with all kinds of restrictions on what can be done on the leased land. 


As is your normal modus operandi you change the discussion/argument. What started this off was your claim that entering into a lease for E&P would cause Saudi Arabia to have to put their IPO on hold. And I pointed out that is not th,e case, in fact it is pretty dumb to think it would be and shows a healthy ignorance of how any of this works, pretty much the same ignorance you showed up thread regarding how the IPO and debt financing works. But of course that doesn’t stop you from blathering on and on about minutia that is not pertinent to your claim.

As to what leases are? Look moron, I was involved in evaluating, bidding and signing lease agreements for over 30 years on almost ever continent. I think I understand what it entails.
But thanks for the lecture from someone who has never had any involvement. :roll

Once again I have to correct your mis-statements. In 2016 Conoco Phillips bid 18.5 million for North Slope leases here in Alaska, and a 2018 oil lease sale in Alaska brought bids totaling 29 million. 

SO do you get it now? As I already told you--- leases on the most prospective oil properties can run from the tens of millions to the hundreds of millions


And as I pointed out that is not significantly material enough to cause Aramco to redo a prospectus.
Firstly lets look at the stress test. A signature bonus of $100 MM by Aramco amounts to 0.005% of their assessed market value, or 0.02% of their annual revenues. As a comparison for a fairly large independent company that % is less than the cost of one wireline logging program…i.e. in terms of corporate valuation it is insignificant.

But apparently, you don’t understand how the valuation works.
When the SABIC deal is evaluated it entails an extremely large payment which amounts to almost all of Aramco’s 2018 free cash flow and about 4% of its market valuation. They would have to take on a significant amount of debt affecting their debt/equity ratio. The valuation done by the investment bankers is now completely different whereas before it entailed a portion of downstream revenues and valuation of the P1 producing reserves after the SABIC purchase not only does the cash and debt position change but also downstream revenues double whereas reserve valuation remains constant. This is a complete change in the way the company looks for the purposes of a prospectus…you are now selling what is more of a downstream company with larger debt and less operating capital.
In comparison, if they were to enter into a bid round all that changes is the money out for the signature bonus. As I’ve pointed out the cash out is minuscule in comparison to either the company valuation or their annual cash flow, and because there is no revenue or no proven reserves associated with winning an exploration license it does not alter the upside valuation of the company either. It is essentially a non-event as far as the prospectus is concerned.

So go on an on about the meaning of “buy” or “lease” (when it is clear you have never been involved in a bid round in your life), it is unimportant to the original claim you made that entering into a bid round would cause Aramco to redo their prospectus. As I think I’ve demonstrated that is incorrect and shows a healthy ignorance of how valuations work.

But go ahead, play the fool some more, your good at it.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Tue 19 Feb 2019, 22:08:35

entering into a lease for E&P would cause Saudi Arabia to have to put their IPO on hold


1. Saudi Aramco's IPO is already on hold. Its been on hold years now---try to keep up.

2. Saudi Aramco has announced a new strategy to expand into foreign oil production. Sure....they might take out leases as you are suggesting, but they also might buy an existing foreign oil company, just as they bought a hunk of Sabic. IMHO they are more likely to buy an existing company to get their oil reserves, rather then trying to grow their own reserves from scratch by starting up an E & P program as you are suggesting.

...your good at it.


Thank you.

And, I hate to point this out, but the contraction for "you are" is "you're"...not "your" as you've written.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Tue 19 Feb 2019, 23:47:42

1. Saudi Aramco's IPO is already on hold. Its been on hold years now---try to keep up.


we all know that Einstein.....the comment was in the context of what you were claiming up thread....Aramco would have to postpone again because they might look at acquiring E&P acreage somewhere in the world. Nice try to divert from your stupid comments though.

2. Saudi Aramco has announced a new strategy to expand into foreign oil production. Sure....they might take out leases as you are suggesting, but they also might buy an existing foreign oil company, just as they bought a hunk of Sabic. IMHO they are more likely to buy an existing company to get their oil reserves, rather then trying to grow their own reserves from scratch by starting up an E & P program as you are suggesting.


and your "opinion" is based on your vast understanding of Aramco's finances and business strategy as you have shown in the ridiculous claims you've made previously on this thread?

Why would Aramco need more oil reserves right now? Their current reserve situation (which has been audited) would make them the largest upstream O&G company in the world. They went after SABIC because their goal was to be the largest integrated O&G company in the world which meant they needed to increase their downstream capabilities. The CEO of Aramco said that much in his latest interview. The reason they would look at participating outside of SA is for diversification, which is another one of it's goals, not because they are worried about their reserves base. But apparently, you know more about their business than he does. :roll:

Thank you.


first time I have ever seen someone thank someone else for calling them a fool. But I guess that is the way your mind works...if you can call it that. :roll:
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Wed 20 Feb 2019, 01:42:09

your "opinion" is based on your vast understanding of Aramco's finances and business strategy ...


So it would seem. After all, I've been consistently right over and over again that the IPO was NOT about to happen.

The trick here is to gather as much information as possible, from multiple independent sources.

Its been amusing watching you stumble and bumble and fall for every press release made by the PR stooges in the media office at Saudi Aramco. And now that all the PR press releases about the imminent IPO have been proven wrong over and over for the last three years, you never learn from it. You just wait for the next PR announcement from the flacks at Saudi Aramco and then you regurgitate it like it is gospel. Its Hilarious.

I prefer to see what the experienced reporters and financial analysts at places like the Wall Street Journal and the Financial Times make of what is going on. And time and time again their skepticism about the timing of the Saudi Aramco IPO has been proven correct.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Wed 20 Feb 2019, 16:34:39

so it would seem. After all, I've been consistently right over and over again that the IPO was NOT about to happen.

The trick here is to gather as much information as possible, from multiple independent sources.


Jesus wept. Lets recap

First you claimed that the WSJ was reporting the IPO was canceled, you were adamant that was the case.

When in fact, the IPO was never canceled, they have been working on plans for an IPO continuously and the official reserve reports were just released to Aramco (as the CEO stated in his recent interview). They have completed much of the work necessary, financial and reserve audits and have restructured the corporation specifically to allow for an IPO (as the CEO has pointed out).

Then you claimed the WSJ was reporting Aramco wouldn’t do an IPO because they were afraid of public disclosure of their reserves, which you claimed they had been lying about.

And yet not one but two independent reserve audits have been completed indicating the reserves are actually slightly higher than Aramco had previously claimed. The CEO announced this in an interview…so much for being afraid of public disclosure

Then you claimed that based on a New York Times article that Saudi Arabia had no spare capacity and that they would not rise above 10.3 MMb/d without a massive drilling program.

And yet in October of 2018 SA production was somewhere between 11.1 and 11.3 MMb/d, that accomplished without a massive drilling program, simply by using spare capacity

Then you claimed that Aramco would somehow “takeover” SABIC even though they were not planning on acquiring all the outstanding shares and then you claimed they would do an IPO of a combined Aramco and SABIC.

The CEO of Aramco has stated they will not seek more than the investment funds shares which means SABIC remains a public company. Being public means they can’t be put in a IPO whether they have a majority shareholder who is private or not.

You claimed that based on reports you had read that Aramco was only worth about 20% of the 2 billion that Aramco suggested the IPO might be listed at.

The math doesn’t work. They retain 50% of reserves which amounts to 134 MMB. Their full production cost is something in the order of $9.00/bbl which means at a Brent price of $60 the value of that oil is $6.8 billion in money of the day. Pretty hard to get to $400 MM valuation from that with a time value of money calculation and especially when you take into account this doesn’t take into account any of the value associated with the downstream business.

So, all in all, I don't think relying on journalists viewpoints whether they are from the Wall Street Journal or Buzzfeed has worked out for you.

You keep claiming that I have been predicting dates for an IPO to happen, which in fact I never did. What I have said all along is Aramco has been proceeding with getting everything in place to complete an IPO and they would issue the prospectus when it made sense to them. Delays have made sense for a number of reasons. That is exactly what the CEO of Aramco has been saying for several months.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Wed 20 Feb 2019, 16:57:57

the IPO was never canceled, they have been working on plans for an IPO continuously


Yes, for years now they have been working on the IPO continuously. Except when they're not.

For years now you've been claiming it is just about to happen, only for some little....delay.....to screw it up again. And again. And then again. And now again.

The latest announcement by a spokesperson for Saudi Aramco says the the IPO will occur in 2021. Well...that means no IPO in 2019, no IPO in 2020, and maybe an IPO in 2021. Obviously they are in no hurry to do the IPO.

us-saudi-oil-aramco/saudi-aramco-to-issue-bonds-in-second-quarter-2019-list-in-2021-energy-minister

We'll have to wait a few more years to see if this actually happens, or if this latest IPO schedule turns out to be as bogus as the past announcements on the timing of the IPO have turned out to be. :o :lol: :-D :) :twisted: :mrgreen: :roll:

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Re: Saudi Aramco IPO

Unread postby Plantagenet » Wed 20 Feb 2019, 17:26:01

You keep claiming that I have been predicting dates for an IPO to happen, which in fact I never did..


Saudi Aramco has announced several dates for the IPO to happen, which you accept each time as gospel. Thats what we are in dispute over here, in case you haven't noticed. I have questioned in multiple posts whether Aramco will do the IPO on the dates they announce, and you then make posts where you state that you disagree with me and the IPO is definitely on track just as ARAMCO says.

Except you've been wrong every time and the IPO isn't on track. Its now years behind the original planned date for the IPO to happen---. I've lost track of how many times ARAMCO has set a date and then cancelled those plans and set a later date---just as I've predicted in each case.

Here's the most recent example: when Saudi Aramco said the IPO would definitely happen in 2018 you wrote "At each and every opportunity since they started down this road ARAMCO had stated they were on target with their original goal of an end 2018 listing. Throughout the period you claim they were stalled they were busy completing all the work necessary to put an IPO in place."

Please note that once again you were totally wrong. ARAMCO did not complete all the work to put the IPO in place for offering in 2018 as you claimed. IN fact ARAMCO's plan to do an IPO in 2018 is not only stalled, as I said, but it is now cancelled. The soonest they will try again is now apparently 2021.

Lets wait and see if that happens. I'm skeptical, based on ARAMCO's repeated failures to do the IPO in a timely fashion, but maybe they'll get their act together over the next 2+ years and actually do what they say they are planning.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Wed 20 Feb 2019, 17:56:17

Saudi Aramco has announced several dates for the IPO to happen, which you accept each time as gospel. Thats what we are in dispute over here, in case you haven't noticed. I have questioned in multiple posts whether Aramco will do the IPO on the dates they announce, and you then post that you disagree with me and the IPO is definitely on track just as ARAMCO says.
 

Hardly

Here is what you said:

In spite of your repeated insistence the IPO would happen in 2016, and then more of your posts and more insistence on the IPO happening in 2017, and then another barrage of your inaccurate posts insisting it would happen in 2018, 


Which in fact I never said. What I have said all along is they have been preparing the information in support of the IPO and they would no doubt execute it when it made sense. Do I need to find those quotes? Exactly why would they continue to do all the background work required for an IPO at considerable expense when there was no intent to complete it? Their timing is their timing and the best understanding of that is what the CEO of Aramco has stated several times….they still plan on executing an IPO but it will be when the time is right. Also note that Aramco never predicted completing an IPO in 2016 or 2017...they suggested early 2018 then postponed to late 2018 and then to a later date to be announced.

Please note that once again you were totally wrong. ARAMCO did not complete all the work to put the IPO in place for offering in 2018 as you claimed. IN fact ARAMCO's plan to do an IPO in 2018 is not only stalled, as I said, but it is now cancelled. The soonest they will try again is now apparently 2021. 


Cancelling the IPO means they aren't going to do it at all which is not the case. They are simply postponing it to the appropriate time. Not the same thing at all, but nice attempt at wordsmithing to cover your ass. :roll:

What work did they not complete? The CEO of Aramco just stated that they had completed all the necessary work (the following quote from the interview with Nasser last month)

What I have to say about the IPO is that a lot of work has been done and the commitment is definitely there. The proof of that is what has already been done by the government and by the company. We have changed the tax rules, made a new concession agreement, changed Aramco into a joint stock company, and introduced a lot of fiscal reforms to facilitate a listing,”


Everything that is required for listing is there. If the government decided, it could be done in no time


But apparently you know more about the state of work conducted on the IPO than the CEO of the company. :roll:
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