'CAC' pid='39012' datel Wrote:

'ArtM72' pid='39010' datel Wrote:

'CAC' pid='38992' datel Wrote:

I assume it is fair to conclude that the E/A appraisal wells will have to be put on hold indefinitely pending determination of the new direction (or pending re-confirmation of the old direction).  The last thing IOC would want is to risk a less-than-stellar drilling result...without first having pocketed the $613M in up-front money.  So I guess all of that drilling has to wait for now.  If IOC defintely preferred the new plant, it makes me wonder why they didn't just find a way to bid $950M to prevent OSH from getting the minority interest and potentially changing things. 

I just don't understandyour thinking at all.

Why on earth would E/A appraisal wells be put on hold pending a decision on the LNG plant?  Fear of less than stellar drilling result ?   Total and OSH just wanted to seem conservative with their estimates and thus not subject themselves to criticism when the final numbers come in.  If/when the numbers come in high everyone is happy.   Up or down, the faster appraisal goes the sooner IOC gets its money.

As to whether IOC benefits or its interests are somehow damaged by the OSH and government ownership the jury is still out and will be until IOC's final % ownership of E/A is announced.  How OSH is going to control anything with a guaranteed minority interest is beyond me, and no one in the past two weeks has come up anaything yet that remotely suggests a method by which OSH can acquire Total's shares or somehow exert primacy over those shares...except by PNG government fiat.

As I said, I just don't get your thinking.

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My thinking is that we don't really have a binding deal with TOT at this time.  They aren't going to pay us the 613M and they aren't going to float the cost of the drilling until we do.  If OSH thinks that it will be "an interesting few months" like they stated, then I assume they think negotiations are starting over to some degree.

'Getitrt2' pid='39003' datel Wrote:

'Brew Swillis' pid='38995' datel Wrote:

'ArtM72' pid='38990' datel Wrote:One way or another you are going to have to get property owners and regional politicians on your side. It isn't a bad estimate that the additional infrastructure to build the Gulf LNG project would take an extra year to design and build when compared to a third train at PNG LNG. Quite a bit of preliminary engineering and site selection has already been accomplished. Much of what needs to be built will have to be built whether it is CSP and pipeline or CSP, pipeline and LNG. Whichever way it goes though, what needs to be done will go considerably faster if everyone is on board and working together. The sooner the better. Let's hope Hession sees this and those drill bits will rapidly make the question of either/or irrelevant. The good news is of course the bits are finally working and (somebody please correct me if I'm wrong) with any luck around the first of the month we should hear about penetration of the top of a gas bearing formation. Best regards,

Train three at PNG LNG would cost the govt of PNG less than a greenfield project and offer a greater return on the investment in a shorter timeframe.  That's a powerful economic argument.

You don't think the PNG government want both?!  Give me a break!!  Why wouldn't they?

You misinterpreted my comment, sorry I was not clear.  I am in no way saying Gulf LNG and train three are mutually exclusive.  I am merely pointing out the economic argument supports PNG LNG expansion BEFORE Gulf LNG.  Not IOC's economics, PNG's.  Ultimately, the decision will be based on what is best for PNG, not what is best for IOC shareholders.  I am NOT implying this is bad for IOC, I think everyone will be happy when all is said and done.

The official version also stated that well 4 would be a delineation well drilled with the OSH rig. No date given . Previously stated 2nd quarter start. I expect us to know buckets more after the next call . I am not sure that IR has all the information based on what others close to the situation say. We wait.

'Getitrt2' pid='39020' datel Wrote:CAC, I do not know what you mean by "starting over to some degree", but they definitely are not starting over from scratch. PacLNG is out as called for by the agreement, they have a third partner welcomed by both IOC and Total as intended by Total, and I think some fairly straight-forward modifications to the original SPA can establish basically the agreement they intended to move forward with. I'm not sure how much I care what OSH "thinks", and they cannot control the deal between IOC and Total any more than IOC could control the deal between OSH and PacLNG. Furthermore, moving forward in that manner is what both IOC and Total have since stated as their intent. It probably will now take some time beyond March 31 to close, but I doubt it will be anything like a couple of months, and they were not planning to start drilling in Antelope with the rig from OSH until second quarter anyway. Once they do start that, they plan to move ahead aggressively with both the appraisal wells and the Antelope Deep exploration well.

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Getit --

Yes, that could turn out to be exactly how it goes.  But "assuming" that anything will definitely happen just because IOC management said that's the direction they were planning to head would not be recognizing the history of this company over the last five years.  

And the reason I care what OSH says/thinks is because I think they want the E/A gas for their existing plant.  Is it possible that they raised 900M just to become a minority partner in a second plant...well, I guess so.  But economies of scale make me think that wouldn't be their ideal scenario.  

Will OSH be able to somehow get the gas to a third/fourth train instead of to the new TOT plant...I don't know.  Would it possibly involve a deal that benefits IOC if they did...maybe, maybe not.  But I'm guessing that OSH thinks they have a chance to accomplish exactly that if they spent almost a billion dollars.   

'Brew Swillis' pid='39017' datel Wrote:

'Getitrt2' pid='39003' datel Wrote:

'Brew Swillis' pid='38995' datel Wrote:

'ArtM72' pid='38990' datel Wrote:One way or another you are going to have to get property owners and regional politicians on your side. It isn't a bad estimate that the additional infrastructure to build the Gulf LNG project would take an extra year to design and build when compared to a third train at PNG LNG. Quite a bit of preliminary engineering and site selection has already been accomplished. Much of what needs to be built will have to be built whether it is CSP and pipeline or CSP, pipeline and LNG. Whichever way it goes though, what needs to be done will go considerably faster if everyone is on board and working together. The sooner the better. Let's hope Hession sees this and those drill bits will rapidly make the question of either/or irrelevant. The good news is of course the bits are finally working and (somebody please correct me if I'm wrong) with any luck around the first of the month we should hear about penetration of the top of a gas bearing formation. Best regards,

Train three at PNG LNG would cost the govt of PNG less than a greenfield project and offer a greater return on the investment in a shorter timeframe.  That's a powerful economic argument.

You don't think the PNG government want both?!  Give me a break!!  Why wouldn't they?

You misinterpreted my comment, sorry I was not clear.  I am in no way saying Gulf LNG and train three are mutually exclusive.  I am merely pointing out the economic argument supports PNG LNG expansion BEFORE Gulf LNG.  Not IOC's economics, PNG's.  Ultimately, the decision will be based on what is best for PNG, not what is best for IOC shareholders.  I am NOT implying this is bad for IOC, I think everyone will be happy when all is said and done.

Brew, IMO you are still not being clear.  PNG LNG expansion first from WHERE?  Right now we have a deal envisioning a separate two-train LNG plant supported by PRL 15, which is strongly believed to be adequate for that, and POSSIBLY for more.  That changes if you send 4.6 Tcf of that to PNG LNG, and there is no other currently available or confirmed resource adequate to proceed with the two-train plant deal with Total.  To do both, we need to proceed with Total and find gas from elsewhere for PNG LNG, which is more feasible and even likely, and the intent expressed by Hession as of now.  That is what is best for both IOC's AND PNG's "economics".  Also, if enough gas is found, there is potential for expansion of both projects, the best of all outcomes.

(03-12-2014, 06:47 AM)CAC Wrote:

(03-12-2014, 06:22 AM)Getitrt2 Wrote: CAC, I do not know what you mean by "starting over to some degree", but they definitely are not starting over from scratch. PacLNG is out as called for by the agreement, they have a third partner welcomed by both IOC and Total as intended by Total, and I think some fairly straight-forward modifications to the original SPA can establish basically the agreement they intended to move forward with. I'm not sure how much I care what OSH "thinks", and they cannot control the deal between IOC and Total any more than IOC could control the deal between OSH and PacLNG. Furthermore, moving forward in that manner is what both IOC and Total have since stated as their intent. It probably will now take some time beyond March 31 to close, but I doubt it will be anything like a couple of months, and they were not planning to start drilling in Antelope with the rig from OSH until second quarter anyway. Once they do start that, they plan to move ahead aggressively with both the appraisal wells and the Antelope Deep exploration well.

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Getit --

Yes, that could turn out to be exactly how it goes.  But "assuming" that anything will definitely happen just because IOC management said that's the direction they were planning to head would not be recognizing the history of this company over the last five years.  

And the reason I care what OSH says/thinks is because I think they want the E/A gas for their existing plant.  Is it possible that they raised 900M just to become a minority partner in a second plant...well, I guess so.  But economies of scale make me think that wouldn't be their ideal scenario.  

Will OSH be able to somehow get the gas to a third/fourth train instead of to the new TOT plant...I don't know.  Would it possibly involve a deal that benefits IOC if they did...maybe, maybe not.  But I'm guessing that OSH thinks they have a chance to accomplish exactly that if they spent almost a billion dollars.   

CAC, I am NOT "assuming that anything will definitely happen just because IOC management said that 's the direction they were planning to head".  That is a gross misstatement of what I said.  It is, however, a strong indication of where they are headed and what is most likely.  Also, in case you have not figured it out yet, this is NOT the same company and management we have been following the last five years, which I think is very important.  Why don't you address directly the facts and logic I cited.

OSH's investment in PRL 15 is a smart move for them for their future growth and profits in either scenario, and they specifically stated that in their news release, which I would suggest everyone read thoroughly.    Also, they will be a "minority partner" in either or both scenarios, and they do not control either.  Yes, that was exactly their intent.  You say, "Would it possibly involve a deal that benefits IOC if they did...maybe, maybe not."  Are you serious?  Any deal involving IOC's PRL 15 ownership, will benefit IOC;  it's just a matter of how much.  I feel sure the greater benefit for IOC and PNG would be a somewhat modified SPA with Total with IOC continuing to have a material interest (25-30%) in PRL 15 and the LNG project; and apparently Hession, who I consider more competent on it than any of us, feels the same, which means something to me if not to you.

If after OSH closes its deal, Exxon makes a bid to buy out IOC and succeeds, Exxon will be in control.  Otherwise, I think IOC and Total are mostly in control of this, and they seem to be in sync.

'Getitrt2' pid='39020' datel Wrote:CAC, I do not know what you mean by "starting over to some degree", but they definitely are not starting over from scratch. PacLNG is out as called for by the agreement, they have a third partner welcomed by both IOC and Total as intended by Total, and I think some fairly straight-forward modifications to the original SPA can establish basically the agreement they intended to move forward with. I'm not sure how much I care what OSH "thinks", and they cannot control the deal between IOC and Total any more than IOC could control the deal between OSH and PacLNG. Furthermore, moving forward in that manner is what both IOC and Total have since stated as their intent. It probably will now take some time beyond March 31 to close, but I doubt it will be anything like a couple of months, and they were not planning to start drilling in Antelope with the rig from OSH until second quarter anyway. Once they do start that, they plan to move ahead aggressively with both the appraisal wells and the Antelope Deep exploration well.