3 Reasons to Sell InterOil

In the following video, analysts Joel South and Austin Smith continue their discussion to give you both sides of the InterOil story. Parliamentary government in New Guinea is forcing the company to battle through tons of red tape, which cuts into the company's ability to start developing LNG export facilities. InterOil needs to seize the opportunity with extremely profitable Asian-Pacific markets right now, but government delays could allow competitors to sneak in and grab the profit. Joel cautions investors to watch how these government interests play out for the energy stock. 

InterOil is still a risky venture with a lot of upside potential. If InterOil is not of interest or if the company is carries too much risk, then you should check out our new free report, "The Motley Fool's Top Stock for 2012." In it, our chief investment officer identifies his favorite company for the year. To access the report before the rest of the market catches on, click here -- it's absolutely free.

Joel South owns shares of ExxonMobil. The Motley Fool owns shares of ExxonMobil. Austin Smith owns no shares of the companies mentioned above. Motley Fool newsletter services recommend Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On July 16, 2012, at 4:04 PM, ArtM72 wrote:

    Nothing like thinking IOC's 15+ TCF of natural gas (with condensates) 40 miles from a protected shore might never find its way to market, expecially when one of the two fields has wells that have test flowed at 300 and 600 million cubic feet per day with immediate pressure recovery. The second field has logged in with over 1,600 feet of pay zone with final DSTs pending next week.

    I wonder how many Australian coal seam gas wells it would take to match that production rate? That, and I guess XOM's $15.7 billion 6.6 MTPA LNG facility fed by 9 TCF of fields with 200 mmbbls and a 400 km pipeline is a small, almost an inconsequential, entrance into PNG.

    Go short quick while the market gives you the chance on this uptick! Nobody in China or India wants to be in the middle class anymore and Japan plans to restart all of its nukes next year. LOL.

    I suppose it is tough to make enough investment videos to keep a roof over your head, much less understand the geology and do the research as well. That's ok. Raymond James has still only upped its projected price to $100 and they do a lot of due diligence. But $1.00/mcf for Elk/Antelope and disregarding Triceratops altogether? Hmmm.

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