Topic: IPAA Presentation — shareholdersunite.com

IPAA Presentation

This topic has 9 voices, contains 28 replies, and was last updated by sageo 105 days ago.

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February 2, 2012 at 6:17 am #7020
Justin94360	On Interoil’s site: http://www.interoil.com/presentation/2012-02-02_IPAA_Final.pdf
February 2, 2012 at 7:31 am #7021
admin	Thanks Justin, I’m sure there are people going over them meticulously.
February 2, 2012 at 7:42 am #7022
my2cows	Love slide 18 comparing T-2 and Antelope/Elk. trading at .58/mcf… not including condensates. If T-2 successful, we’re currently trading at 25 cents/mcf Partner… it seems they are looking for partner to add capacity and still build out with at least EWC. Flex?!? idk. But Flex is not working under agreement now. maybe that capacity will go towards traditional LNG plant with new partner?? Still think everything depends on partner. It would be beneficial for IOC to maintain EWC for T-2 field. Grow there own LNG plant along side traditional LNG plant for Elk/ANT with super major, imho.
February 3, 2012 at 9:53 am #7066
petrengr1	http://www.interoil.com/presentation/2012-02-02_IPAA_Final.pdf 1. Apparently no decision has been made to eliminate EWC or Flex. Negotiations are still ongoing with Flex. See charts 3 and 8. “Pending PNG Government confirmation, the Board of Directors of InterOil is ready to make a Final Investment Decision to proceed with its LNG project in the Gulf Province” Is there a difference between “confirmation” and “approval”? 2. They are drilling ahead at Triceratops-2 with a 17 ½” bit at a depth of 1,693+ feet as of Feb. 2nd. This means in the last 2+ weeks they have set some type of surface pipe, probably 18 5/8”, at an estimated depth of 600-800 feet, installed the blowout preventer and drilled ahead to the present depth of 1,693+ feet. I expect them to set a string of 13 3/8” casing somewhere around 3,100 feet. I don’t know if they will drill through the sandstone mentioned at http://www.interoil.com/presentation/2011-11-15_3Q11_Results_Presentation_Final.pdf chart 15 or set the casing before drilling into the sandstone. After setting the 13 3/8” casing they will drill a 12 ¼” hole to the top of the carbonate reef where they will set a string of 9 5/8” casing. They are expecting to find the reef at a depth of 1,320 meters (+/-200) or about 4,331 feet. 3. Let’s compare the Feb. 2, 2012 presentation http://www.interoil.com/presentation/2012-02-02_IPAA_Final.pdf chart 9 with the Aug. 16, 2011 presentation http://www.interoil.com/presentation/2011-08-16_Enercom_Final.pdf chart 11and see what has changed. A. Under Elk/Antelope Fields we now have 6-10 wells as compared to the previous 5-11 wells and 1 surveillance has been added. B. Under Condensate Stripping Facilities the 28” size of the Fields to CSP wet gas line has been eliminated. I guess the size of these line may vary. C. Under Pipeline License Condensate the 2- 100,000 Bbl condensate tanks have become one 100,000 Bbl condensate tank with others to be added as necessary. D. Under Dry Gas Pipeline the pipeline size has changed from 32” to 36” and the 16” pipeline has become a 12”-20” pipeline. E. Under Export Facilities “Common Facilities” has been added and this includes an Acid Gas Plant. So now we know where the CO2 will be removed. It looks like the gas will be dehydrated (water vapor removed) at the CSP in the field and the CO2 will be removed at the coast upstream of the LNG facilities. This Acid Gas removal plant is pretty big deal and it is not clear who is paying for it since it will serve both the land based LNG plant and the fixed floating LNG plant. F. Under Liquefaction Facilities the plant size has changed from “up to 10.8 mtpa” to “8 mtpa capacity with potential for expansion”. Also the 180,000 cubic meter LNG storage tank has changed to “LNG storage tanks” without the size being mentioned.
February 3, 2012 at 10:17 am #7068
Palmtok	Pet, thanks once again! I saw the size they are using at T2 and recall that’s what you expected it to be for them to later possibly turn this into a production well, correct? Also, on the project changes this certainly shows they are getting closer to finalizing things with partners. These kinds of changes sure show progress during FEED process and discussions at many levels, including the PNG government. Things are coming into focus gradually, and when an announcement comes it will be major, since all phases are being developed in conjunction.
February 3, 2012 at 10:31 am #7069
Tree	Hey Pet, Good question regarding IOC’s choice of words. They are throwing elbows and protecting their legal turf. My view is there is a significant difference between IOC using ‘confirmation’ and ‘approval’. IOC had approval in Jan 2010 to proceed with plans for Gulf LNG in Gulf Province. That approval came with the promise from Gov’t to amend the 2009 PA to allow the approved move. I agree with most that NEC PA amendment legislation is the key. That will allow binding FIDs with EWC/Flex/Mitsui and should move our OT HOAs to binding contract. Not to mention, SD and SM will have a secured project to join. I like IOC using confirmation to describe what project partners await. I also like they state they are ready for FIDs, which will be binding at this point
February 3, 2012 at 10:45 am #7070
Justin94360	Tree, I agree that it is all down to the govt/NEC now. I keep thinking that the delay could be for one of two reasons. - The govt is so busy dealing with the current political situation that all other items of business have gone on a back burner. - The govt is just holding off with it’s approval until they are totally happy with IOC’s choice of SM and the way it is going to progress the project(s). This just gives them some leverage with regard to the operator/deals. I think both of these situations is not unrealistic or unreasonable on the govt’s part. Although the political situation could drag this out I assume that a NEC meeting could be convened anyday, approval granted and we would be away.
February 3, 2012 at 10:57 am #7071
Palmtok	Justin, I think it’s door #2. The fact that Horizon/Talisman were able to announce FID and within days have Mr Duma comment on how it’s an example of working together with the government, etc shows things are working in PNG, and companies are not afraid of Somare’s proclamation that any government deals would not be official. The resource sector is far too important to PNG’s future to be ignored or back-burnered. Remember, last year or in late 2010 Horizon had their PRL yanked by the government for non-action. Can you imagine the dirty drawers IOC shareholders would have it that had been done this past summer instead of the wake up call we received? The fact that Horizon has come full circle (went to court to have PRL reinstated) to now be able to announce FID speaks volumes. Those that think IOC fell completely from the graces of the PNG government should take heart with all of this. PNG spoke, IOC listened and got back in line with full understanding of what the government wants. I would expect they have told IOC clearly what needs to happen before they get NEC approval for the PA amendment. I feel very confident that they will get it; in time, but they will get it.
February 3, 2012 at 11:13 am #7072
petrengr1	Palm- Yes, I think they can use this size casing for a producing well if they choose to do so. Tree- I believe your analysis is correct. Their use of “confirmation” seems to indicated they believe they already have approval of the PA and they are just seeking confirmation after the public comment by Duma. This confirmation could come in the form of an approved amendment to the original PA as mentioned by Palm above.
February 3, 2012 at 11:53 am #7077
Palmtok	From jonleba on YaZoo: http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_I/threadview?m=tm&bn=26290&tid=323530&mid=323530&tof=1&frt=1 “Spoke with Wayne at length yesterday. NEC members have been all been spoken to about approval of Gulf project, IOC feels it could be any day. All four of Duma’s concerns will be met and the government knows the names of the SD bidders and has no trouble with any of them being the IOC partner. Wayne could not elaborate on details of bidding process or numbers other to say we could pick someone today but are still working towards the best deal. Selldown should be less than 40% of IOC share. Trying to pick someone that can work with EWC and FLEX. Also looking for SD partner to be JV partner in PPL 236. 2 years ago not interested in a JV partner, now they want one to accelerate drilling program. Weather put drilling of T2 back a good month or more, now drilling 24/7. Question asked by Pet1 about drilling deeper and other seismic to the west of T2. In some report Bwata West was considered a reef. Currently doing more seismic at Wahoo and Tuna,then go back to the North and West of T2 to test for more reefal structure. IOC plans to finish this well, test, if a productive well, then drill an offset well from the same location. The closed structure area and gross GRV at T2 is many times greater than E/A, the key is if the limestone is dolomized as is E/A. Answer in a few weeks. T2 is being drilled to show that IOC has the gas resource to produce enough to meet contract demand of 10.6 mta required in government contract. Next well to be drilled will be Wahoo/Marlin or Tuna hopefully this year. to be cont.”
February 3, 2012 at 12:06 pm #7078
Palmtok	Lots of very good news in jonleba’s post. Thanks jonleba! Of note is that there seems to have been nothing in their presentation that the shorts were able to “feed” on. Last year there was the mention of FID pushback, and they bombarded the stock and it took a dive. Looks like we will hold here for a bit until NEC approval comes, then we should see nice pop followed by other good progress (SD, PDL application, T2 results, etc). I do hope Feb is a great month; we’re overdue.
February 3, 2012 at 12:06 pm #7079
admin	Just when I was about to offer some secretarial help with his notes .. Interesting stuff. ["Selldown should be less than 40% of IOC share."] Happy to hear that. Lots of cash, but still a sizable position Will they wait for T2 confirming reef to close the deals? If there is a reef, for sure their options increase (and the price probably as well). They could sell most, even all of E/A and start anew with Triceratops, for instance. All in all, quite reassuring, although it would be nice to have some sort of indication on the price/Mcf..
February 3, 2012 at 12:11 pm #7080
admin	Palm, yes. Although perhaps they’re waiting for T2 results (see my previous post). On another note, I know some people were rather disgusted with me for calling IOC overbought, but I rather face a wall of good news in better technical conditions, even if perhaps it doesn’t matter all that much (it is something I’m actively studying at the moment and explains the Technical Trading Ideas forum topic)
February 3, 2012 at 12:25 pm #7084
Palmtok	STP, I agree on the SD; T2 may well be a key. They should be at the top of the reef by the end of Feb. If we hit dolomite early on it will be interesting to see how soon from there anyone is ready to pull the trigger. My guess is a SM will want the full depth with core samples; I would. Seismics get one excited, but the proof is in the drilling. Too bad the weather delayed things. Had they been able to start when they wanted, they would be done by now. From there I would guess the SM is in for the duration. Also very good to hear all current bidders are OK with Government. As far as your overbought comment; it was your opinion, and people shouldn’t get bent out of shape about it. It’s a piece of information to use (or not); I really doubt Wall Street saw that comment and decided to change their thinking All is going very well IMHO and if T2 results are the tipping point for the SD, so be it. It’s close at hand in the O&G exploration world.
February 3, 2012 at 12:49 pm #7086
admin	No Wallstreet didn’t notice, hardly surprising If I thought I would be able to even fractionally influence I would not have said it. But a few people noticed and I got some rep from a few of them, which in a way, I can understand. T2 it is, then. Good to have seen Pet so confident in the presence of the reef, as this is something that I worry about, at times. Another interesting question is whether E/A is enough for supporting 9mtpa for 20 years. I realize that these figures can change when the resource is producing, for good or worse (Slochteren, the big Dutch gas resource, has constantly been re-evalued positively when producing, for instance)
February 3, 2012 at 12:53 pm #7087
maui4marko	PalmJumeirah – based on Pet’s input above on the drill rate and expected targets, and extrapolating current progress rates, I’m calculating the following target dates for T-2 drilling: Estimate to set 13-3/8″ casing at ~3,100′ Earliest – Feb 15th Latest – March 15th Estimate to set 9-5/8″ casing at ~4,330′ Earliest – Feb 27th Latest – April 8th Estimate to reach total depth Earliest – March 29th Latest – June 9th Company estimate to complete well Earliest (60 days post-spud) – March 18th Latest (120 days post-spud) – May 17th While it’s still too early to accurately estimate TD based on current drill rate, as of now it looks like the early target date is in the mid- to late-March timeframe and the late target date is late May / early June. Add in Jonleba’s comments about drilling a second offset / deviated well from the same site, then looks like this rig will be staying at this site for potentially most of 2012.
February 3, 2012 at 1:07 pm #7088
sageo	Thanks to all of you guys for your immensely fine comments.I guess the key word for now is “patience”.
February 3, 2012 at 1:10 pm #7089
Palmtok	jonleba Part II: “IOC wants to finalize current HOAs on gas selldowns to get some cash upfront, like the great potential of the Chinesse connection. SD partner would bring in other conventional contracts. Mitsui standing by, eager to participate. XOM wants to add trains 3and 4. to their plant, perfect gas source just miles North of their plant at PPL 236. If not potential reefs Tuna, Mackerel, Tuna, Whale, Wahoo/ Mako are 35- 40 miles away from the soon to be built new IOC Gulf LNG project, just west of Kerema. Napa- Napa LNG plant should be put off for many years to come, the action will all be at Gulf Lng, plans are being made to make it very big. PNG Government has said yes to the location just need the paperwork to finalize. More news on this coming soon. Despite the worst weather in 100 years IOC continues to work on the road from Herd to E/A. More construction equipment is being sought. Rumors of late about dividend, stock buyback have been discussed by the board, too early to take serious until all the numbers are in. Bidders are not concerned about the PNG political nonsense. Majors and sub-majors are used to working in 3rd world countries worse than PNG. Election time is silly time, every minister is jockeying for the best photo-op or press statement. Sometimes the needs of the country come last. If not an election year IOC would have had all its approvals and been much further along. Guaranteed all the politicos will be attending the marshmellow roast at the T-2 flareoff. Who the next PNG Prime Minister will be is really up for grabs. Trust no one. The minister you trusted yesterday could be your opponent tomorrow, hopefully O’Neil prevails. If not whoever gets in does realize the country cannot meet its economic promises without revenues from the Gulf Project, XOM project does not help the people as much as IOC. Wayne made a point several times to state the support IOC has from its main institutional holders and that they are on top of PNG goings on and support IOC undertakings. Also there is a large unknown buyer acquiring IOC stock and others waiting for SD. Early March IOC is supposed to have their conference call and announce a reserve update, no clue what that entails. Wayne will start the Investor Presentation circuit with Ray James, Prichard, IPAA NY. in March, April.Time has come to spread the word. http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_I/threadview?m=tm&bn=26290&tid=323530&mid=323548&tof=1&frt=1
February 3, 2012 at 1:33 pm #7094
Palmtok	Mauiofmanyhats; what? We need to add PE after your name now? Hohoho Good info on the drilling. Message is, continued patience is warranted while this plays out. There will be good reports, etc to prop pps until we get there, but I think the markets have figured out IOC pps. I really think that unless there is REAL bad news or REAL good news we will see steady movement up (but less crazy girations). They know what is real for IOC and what is pure speculation and the chances of it happening. Maybe some of those naive analysts that Eric was always pounding on are getting a good education through this. Who knows? A lot of what jonleba says is very confirming of what many of us (HERE) have been thinking. Having Pet’s analysis as we go down the hole will be very valuable now; maybe more than ever. Instead of getting garbled up and buried on YaZoo, it is much easier to read and keep at hand here. When there’s comething to talk about we do; otherwise when things are slow there’s no idiots posting under 300 names just to bury good posts. Life is much simpler here, and more productive me thinks.
February 3, 2012 at 1:34 pm #7095
Tree	Thanks to jonleba for the very positive report. It goes back to Pet’s note of IOC’s usage of confirmation vs approval. jon clearly reports the Gov’t, SMs and SDs partners agree Gulf LNG has an approval life. When all loose ends are bottom lined the Gov’t will eagerly amend the 2009 PA to confirm Gulf LNG’s legal existence, as promised. Meanwhile the pre-investment rolls on, T-2 bit spins, future exploration plans are being firmed and apparently IOC is now eger for drilling JVs in 236. Safe bet it will be XOM/OSH there. Thanks again jonleba for attending and reporting again.
February 3, 2012 at 2:41 pm #7100
petrengr1	Jonleba- Thanks for the feedback from your meeting with Wayne and for sharing the many details. “The closed structure area and gross GRV (gross rock volume) at T2 is many times greater than E/A, the key is if the limestone is dolomized as is E/A.” Let me put this in perspective for the uninitiated. He said he gross rock volume of the closed structure area of the Triceratops Field is many times greater than Elk/Antelope Field (which is presently the largest gas field ever discovered in PNG). This seems to be a fairly significant statement. As soon as we see some cores, cuttings and logs on the carbonate section of T-2 we will know if we have dolomite and/or what the porosity of the reservoir rock is, even if it is or is not dolomite. If it is not partially dolomite like E/A the gas volume/cubic meter of rock volume will be less but we have “many times” the gross rock volume. Reef limestone still has better porosity than fractured limestone so we will hope to confirm the presence of a reef. At this point I think they are pretty sure it is a reef. If we find dolomite that will be new information that will be the icing on the cake. If the net/gross pay is as good as E/A that will be another great piece of new information. Due to the more shallow nature of the Triceratops Field Dave Holland said it is possible that the porosity of the Triceratops Field may be better than E/A. So if all of our fondest dreams are true then not only will the gross rock volume be many times more than E/A but the reservoir pore space may also be many times that of E/A. Now that is worth dreaming about but it is only a dream. Maybe next month…….
February 3, 2012 at 2:41 pm #7101
maui4marko	Treemendous, agree fully re: XOM/OSH. One merely has to read between the lines (“XOM wants to add trains 3 and 4 to their plant, perfect gas source just miles North of their plant at PPL 236″). Also, knowing their subsea 34″ pipeline can only handle enough gas for the first 2 PNG LNG trains, it seems obvious they will need to secure future supplies in the nearby ‘hood to make a realistic & cost-effective run at 3 & 4. Lookie like our neighbors really covet PPL236. Better get my PalmPE hat on and start working those long term target dates!
February 3, 2012 at 2:54 pm #7104
admin	["but the reservoir pore space may also be many times that of E/A"] Pet, could some 500ft in distance to the surface make that much of a difference? I would think porosity could be some percentage higher, but “several times??” I think Ken mentioned already the possibility of T being several times bigger than E/A, as it happens.
February 3, 2012 at 3:04 pm #7105
Palmtok	Sure is a lot better “news” than we’ve had in quite a while. To say that many will be watching the T2 result is a huge understatement. If what you (pet) say comes true, we all better start making plans for Cairns sometime later this year. Maui, start brewing more home brew and stocking the boat. By the time that ages a little bit we’ll be ready.
February 3, 2012 at 3:12 pm #7108
petrengr1	STP – I believe you have misinterpreted what I said. I did not say the “porosity” would be many times greater than E/A but that the “pore space” (as in cubic meters) would be many times greater than E/A. If the porosity is any better than E/A it will only be a very small fraction, perhaps 1% better. But if we apply that percentage (porosity is a percentage of the reservoir rock) to a reservoir rock volume that is “many times” greater E/A we come up to a reservoir pore space that is many times greater than E/A.