'jft310' pid='62941' datel Wrote:I bet they wait on the wild card . They can borrow 70-80 percent of LNG plant build costs so cash for the build should be sufficient . I do not think they have enough cash to pay corporate overhead for 4 years or so and explore more of their acreage . Will require more debt and or an equity raise to bridge into cash flow or one heck of second sell down or several years from now a second certification. As far as amount of gas no one really cares about gross gas it just means nothing as in nada . Recoverable gas is what we get paid on at P-2 level and GCA and GLJ are based on recoverable gas . If we hear about 9.5 T number as some say it will be recoverable gas cause gross gas means nada .

IOC corporate overhead roughly amounts to USD 0.1 B per year. I can not imagine that this will have a big effect on operation the coming 4 years:.

Cash flow  coming 4 years:

Cash per 30.6 2015                            0.5

• License payment E/A :                  3.5      (the upper GLJ case is considered as the medium case by IOC)
• Already received license             -0.4
• Equity investment  JV                   -1.8
• Corporate overhead                     -0.4
• Drilling                                            -0.9

Cash per 30.9.2019                          0.5          

'jft310' pid='62941' dateline='<a href="tel:1442634 Wrote:I bet they wait on the wild card . They can borrow 70-80 percent of LNG plant build costs so cash for the build should be sufficient . I do not think they have enough cash to pay corporate overhead for 4 years or so and explore more of their acreage . Will require more debt and or an equity raise to bridge into cash flow or one heck of second sell down or several years from now a second certification. As far as amount of gas no one really cares about gross gas it just means nothing as in nada . Recoverable gas is what we get paid on at P-2 level and GCA and GLJ are based on recoverable gas . If we hear about 9.5 T number as some say it will be recoverable gas cause gross gas means nada .

Correct me if I am wrong but once the assets in the ground are booked they are then reserves and are in the books as such.  This then increases the value of the company, formally which in tern formaly raises the value of the PPS significantly.  Then the ability to raise money through sale of corporate held shares, bonds, debt or other means (I would hope rather than issuing more shares and causing dilution) is more desirable and less costly.

'Relker' pid='62949' datel Wrote:

'jft310' pid='62941' datel Wrote:I bet they wait on the wild card . They can borrow 70-80 percent of LNG plant build costs so cash for the build should be sufficient . I do not think they have enough cash to pay corporate overhead for 4 years or so and explore more of their acreage . Will require more debt and or an equity raise to bridge into cash flow or one heck of second sell down or several years from now a second certification. As far as amount of gas no one really cares about gross gas it just means nothing as in nada . Recoverable gas is what we get paid on at P-2 level and GCA and GLJ are based on recoverable gas . If we hear about 9.5 T number as some say it will be recoverable gas cause gross gas means nada .

IOC corporate overhead roughly amounts to USD 0.1 B per year. I can not imagine that this will have a big effect on operation the coming 4 years:.

Cash flow  coming 4 years:

Cash per 30.6 2015                            0.5

• License payment E/A :                  3.5      (the upper GLJ case is considered as the medium case by IOC)
• Already received license             -0.4
• Equity investment  JV                   -1.8
• Corporate overhead                     -0.4
• Drilling                                            -0.9

Cash per 30.9.2019                          0.5          

Relker: We should be looking at costs from now until 2022 when there is cash flow from Papua LNG:

1. I think IOC's contribution to the project equity is more like $1.5 Billion = = = Add $0.3 Billion to your figure

2. You don't include any income from selling down other resources in the next few years - Triceratops, Raptor, Bobcat and Wahoo will all have partners = = = Add $1.0 Billion

3. You don't include corporate overheads and drilling costs for 3 additional years (startup will be in 2022) = = = Subtract $1.2 Billion

4. You don't include the Government's payment of suink costs when they take their 22.5% NET share of the project = = = Add $ 0.1 Billion

===> Net outcome is the same as your figure, but extended to 2022

MY BOTTOM LINE: AN ANNUAL CORPORATE OVERHEAD OF $100 MILLION (excluding drilling costs) IS FAR TOO HIGH

'Stavros' pid='62935' datel Wrote:To my opinion, davidhmtk is correct. Nothing says the Wildcard has to be invoked after startup. The so-called "Wildcard" (Final Resource Payment) can be called for at any time prior to producing 25% of PRL 15 Certification of 2C Resources. It could be a day after the Interim Resource Payment, or after lifting 24.99% of the gas, or any day in between. At the moment, we assume that the Interim Resource Payment will be made in June 2016. If, after additional wells are drilled (A-7; 3 producing wells; water injection wells; etc) they conclude that there is 3+ additional tcf above what was Certified by the Experts, IOC can call for the Wildcard payment of $1,200 Million (3 tcf x 40.1% x $1.00 per mcf).

Palm is right.  I re-read the SPA (p. 15) and the "Final Certification" cannot be called until "the date the the First LNG Cargo leaves Port".  Stavros is right about the last time it could be called.

 In my copy of the SPA it's on page 14 ... 3.5 a)

The Heading is Recertification.

It was my understanding that Wild Card and Recertification are two different things.

Let me cogitate on that for a while

'Palm' pid='62952' datel Wrote:They have no choice but to wait on wild card. The soonest they (or Total) can call for it is first shipment of LNG. The plan put forth by mgmt is to prove up, sell share(s), and develop. The PRL factory theory. With the miss at Wahoo, their next chance is TBR. I think their goal has been to generate their needed operating costs out of these PRL % sales. Hession has said that they "are" talking with others about sales of PRL % (buyins) and their goal is to do similar to as they did with Total. I hope that's the case. The reason I fear dipping into the credit line before Certification is it's that much less they have net from the Certification payment. The drilling carry already comes out of the Certification funds; don't want debt service too. Once they get to FID and PDL their options open up. They book reserves and the government kicks in their share (unless they opt for it to be taken out of initial LNG sales proceeds), and they get more cash from Total. I really hope they can bridge the gap to FID without needing to tap debt or an equity raise.

  Palm - Read your post last evening,and I wanted to think about it over night . Woke up early and thought some more on "the PRL factory theory". What would you think about this senario :  [ buyins] ....work a deal with Rex's reps in PNG as a buyin to PRL 39 .Instead of asking for a small percentage of the LNG/PNG revenues (or a small stake), put in these conditions : build pipelines to the southwest (gas & cndensates) to intersect with the current pipelines, and also to drill several wells to the west (nearer to the fault) in order to get the maximum benifit from the Triceratops field (some 19 or so square miles) much sooner than we might expect otherwise .

  If you disagree with my thinking,please do so with care....( this old 84 yr old 'dude' bruises easily .) Ha,ha.