'efi426hemi' pid='34321' datel Wrote:

'Crippsfl' pid='34319' datel Wrote:

Correct me if I am wrong but aren't the 3 appraisal well offset against the first resouce payment?

Hi Cripps,

IOC will be drilling the 3 appraisal wells and will be compensated up to 40 million for each well.  If the drilling goes over this amount then the costs are shared based upon the ownership % in PRL 15 (same for the discovery bonus well - except the limit is 50 million).   These payments are in addition to all the payments listed in the above table.

H&H,

Hemi

I believe that Cripps is right. Total does recover a part of the carried costs for drilling the appraisal wells from the interim resource payment made to IOC as is stated below:


3.4    Interim Resource Payment


    (a)    The Buyer must notify or must procure that the Operator notifies the Seller within five (5) Business Days of the completion of drilling (and testing) of the last appraisal well under the Appraisal Work Program. The date on which that notification is given is the “Trigger Date” in relation to the Interim Resource Payment. Following this Trigger Date, the parties will procure the Interim Resource Certification in accordance with Schedule 6 and the Interim Resource Instruction.


    (b)    Subject to clause 3.4©, the Buyer must pay the Interim Resource Payment plus the FID Payment, after deducting an amount equal to the Appraisal Carry Costs paid by the Buyer under clause 3.8 as adjusted in accordance with the formula in clause 3.4(d), to the Seller in Immediately Available Funds without counter-claim or set-off on the date that is ten (10) Business Days after FID.


    ©    If the volume of PRL 15 2C Resources determined by the Interim Resource Certification exceeds 5.4 Tcfe, the Buyer shall pay the portion of the Interim Resource Payment (minus any amounts paid under clause 3.8 as adjusted in accordance with the formula in clause 3.4(d)) applicable to such excess PRL 15 2C Resource to the Seller in Immediately Available Funds without counter-claim or set-off on the Interim Resource Payment Date and shall pay the remaining amount of the Interim Resource Payment plus the FID Payment minus any amounts paid under clause 3.8 (to the extent not deducted under clause 3.4©) on the date that is ten (10) Business Days after FID.


    (d)    The amount of the deduction in clause 3.4(b) and clause 3.4© is an amount determined by the following formula:

50% x [ACC (1 – Tax Rate)]
Where:
“ACC” means the Appraisal Carry Costs paid by the Buyer under clause 3.8, in U.S. dollars; and
“Tax Rate” is the applicable corporate income tax rate as a percentage that applies to the Buyer under the Income Tax Act 1959 (PNG) on the date the calculation of the amount is made.

'admin' pid='34383' datel Wrote:I think so far the score is in the order of $100M+ (that is, 22.5% of roughly $500M which has been spend on exploration over the years)

They will owe or have to pay the 22.5% of the cost of work done in PRL 15 at the time they elect to take up their full 22.5% working interest entitlement. At one time there was talk of the Operator carrying the Goverment's interest until production commences and then recovering the costs from production. If that is not done the the Government will have to come up with 22.5% of all past and future costs. A $10 Billion project would cost them $2.25 Billion.