Sorry folks, it’s all InterOil at the moment. Wayne Andrews is a highly respected analyst and geologist who has been bullish on Elk from the discovery onwards. Here a summary of his position after the Antelope discovery at Elk4.
1. The Antelope find will significantly augment the gas found at Elk1. This is a “significant and positive” development.
2. IOC will drill 500 feet below the last casing and test the well. Due to the fracturing and high porosity encountered in the last 200feet, IOC will begin managed pressure drilling using the previously installed downhole deployment valve.
3. IOC will have detailed management comments on Elk4 when 1Q financials are released mid-May.
4. With the new seismic data acquired over last 18 months, the confirmation of hydrocarbons at this location should provide reservoir engineers with sufficient data to calculate a significant discovery and move upward the lower end of the previous estimated resource potential.
5. In Raymond James’ opinion, “Elk is a sliver of limestone thrust upon the much larger Antelope structure, the top of which is approx 1,500 feet higher and significantly broader to the south of Elk4”.
6. The other imminent catalysts which will affect the valuation are
a. The independent reserve assessment
b. The active negotiation with an industry partner to sell a 10% interest in Elk, which has the potential to create an implied “Industry” valuation several-fold higher than current values.
c. The possibility of farm outs to industry partners to rapidly advance exploration on IOC’s extensive acreage position.
We especially like the following “Elk is a sliver of limestone thrust upon the much larger Antelope structure, the top of which is approx 1,500 feet higher and significantly broader to the south of Elk4”
This bodes very well for InterOil’s future!