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Monness, Crespi, Hardt & Co on Interoil

October 9th, 2009 · 16 Comments

It’s a little older (17th of September), but still quite interesting..

Monness, Crespi, Hardt & Co. – 09/17/09

Sal Ilacqua, Oil & Gas, 212-838-7575

IOC Update

InterOil Corp (IOC – Buy – $34.39): InterOil announced the Antelope 2 well has encountered reservoir rock at 6,007 feet, some 345 feet higher than pre-drill expectations. The target structure based on seismic data has been some 2,000 feet from about 6400 feet to total depth at about 8300 feet. Pending further drilling, the Antelope structure could have a thickness of as much as 2300 feet, a depth largely associated with the huge Middle Eastern reservoirs. The well is currently being cased and we suspect drilling will be resumed within the next two weeks.

While it is very preliminary to discuss potential oil and gas reserves, it now appears that the reservoir between the Antelope 1 and Antelope 2 wells could be over two miles horizontal and over 2,000 feet in depth, a major structure that should contain many trillion cubic feet of recoverable natural gas. Beyond the potential for natural gas, there is a strong possibility of significant reserves of condensate and or crude oil at the bottom of the Antelope structure. IOC has ordered equipment for horizontal drilling that could be used to produce any liquids and at a minimum we presume some type of natural gas liquids stripping operation will be developed around the Antelope structure.

We suspect that today’s announcement will induce those strategic investors biding for participation in InterOil’s proposed LNG export facility to accelerate negotiations toward an attractive financial arrangement and could well be finalized in the next few months. Today’s news should also have a meaningful impact on the IOC common shares which should easily surpass the 50 level in the next few months with an open ended upside potential pending additional drilling results. We would not minimize the potential impact from any future indication of potential reserves of condensate or crude oil at the bottom of the Antelope 2 well. Finding additional liquids would add an entirely new dimension to InterOil and to the IOC common shares.

Tags: IOC · Research Reports

16 responses so far ↓

  • 1 kencooksam // Oct 10, 2009 at 2:11 am

    Great report

  • 2 rory mcgowan // Oct 10, 2009 at 4:10 am

    ADMIN: What do we know about Goldman Sachs researching Interoil? If their lurking they may come out before the DST. What about RAYJAY they’re going to have to reevaluate, but the Compliance Dept. won’t let them until the DST is released. otherwise it will look like churning. The DST will give them cover as a fundamental change in the size of the field. That analyst is crying about now,knowing he’s been there since day one and now is being out flanked by MS.

  • 3 admin // Oct 10, 2009 at 7:15 am

    Yes, Rory, GS seems to be one of those rumors doing the rounds. We can’t confirm it, but it’s definitely a possibility.
    Yes, we thought that it would have been better for Pavel to wait for some well results, but hey, nobody’s perfect..

  • 4 Harold Chamberlin // Oct 10, 2009 at 11:39 am

    Always liked Sal. He has good questions at the end of the pc’s.

  • 5 JoEllen // Oct 10, 2009 at 5:09 pm

    Thanks again!

  • 6 JoEllen // Oct 13, 2009 at 9:04 pm

    Thank you! Your work ethic and presentation of accurate information is an example for all!

  • 7 Roger // Oct 13, 2009 at 10:03 pm

    STP,

    Can you provide any updated insight or rumors on what you’re hearing. This lack of news is deafening. There is so much going on behind the scenes and I’m wondering when we can expect information on upcoming DST, deals, new rig, flow tests, government agreement, etc?

    Thank you in advance for your continued due diligence.

  • 8 Janine // Oct 13, 2009 at 11:16 pm

    Update: DST coming this week. Another in 2 weeks will be spectacular. I hear DB will start coverage with a buy.Deal will be signed most likely before Gov approval with certain provisions contingent upon Gov approval.Xom has issues… companies finding out our project is a MUCH BETTER DEAL.Next 3 months should be great.

  • 9 Roger // Oct 14, 2009 at 2:28 am

    Thank you Janine , glad you’re back!

  • 10 Harold Chamberlin // Oct 14, 2009 at 12:32 pm

    My heart soars like a hawk to hear a positive news from Janine. Thank you Janine, thank you so very much.

  • 11 Roger // Oct 15, 2009 at 6:34 pm

    Janine,

    You were a bullseye on the DST info. Here’s hoping the two week prediction is spot on as well!

    Thank you for your continued insight I know that I greatly appreciate it.

    Take care.

  • 12 Janine // Oct 15, 2009 at 10:56 pm

    Roger: I hear MS and IOC and starting a Global Institutional roadshow next week. Get ready.

  • 13 Darcy Patten // Oct 15, 2009 at 11:06 pm

    wow, that should dry up the float real quick…….MWHAHAAHAHAHAAHA!

    Thanx Janine!

  • 14 Roger // Oct 16, 2009 at 12:03 am

    Thanks again Janine!

  • 15 Jeff // Oct 16, 2009 at 2:38 am

    Thanks Janine… but what would be the reason for a road show? Secondary or ome other type of financing or something totally different?

  • 16 James // Oct 16, 2009 at 4:11 am

    The roadshow would be to introduce investors to the IOC story. It will be to drum up buyers, who would presumably take the stock higher, be happy when the idea works, and do their trades through MS.

    It has nothing to do with any secondary offering, and anyone who suggests it does is either ignorant of securities laws, or lying on purpose. Like that fool Eric on Yahoo, who is short the stock and getting beaten up.