No one posted anything re the recent announcement re cost blow out on the LNG project. From my point of view I am nor surprised but i am disappointed. This is the first time in my memory that OSH has had to report a surprise problem. My read is that is was the same for OSH management which is almost of more concern. There appears to be tension rising in the relationship with Mobil which is the first time I have detected cracks in the partnership. There is no doubt the project still has very strong payback credentials and i am still very supportive, especially as i anticipate in the next 12/18 months a 3rd and possibly 4th train being announced. In the meantime we have to hope they can get the relationship back on track and work to find cost savings together to mitigate. I wouldn't be surprised eitehr if this is a very concervative estimate and the project comes in under this mark.
I suspect the current market malaise and the concerns re this surprise has created a good buying opportunity for OSH and it will commence its climb back towards the $8 mark in due course. Might be a struggle now however to reach it by 31 Dec however which was my expectation.
I looked at some numbers PB was quoting re the size of sales expected once we get to 2014, they are enourmous and I think any sucess in the current drilling program for oil will recieve a pretty muted response, it will be hitting more gas reserves to support the 3rd and 4th LNG trains which will move the price up.
Just some thoughts - question is whether to buy more - tempted to if price drops below $6.70
OSH Price at posting:
$6.96 Sentiment: LT Buy Disclosure: Held
