'SeKreet' pid='28055' datel Wrote:

She has to come home with potatoes for her hungry kids. It is NO option to come home empty-handed!

I really like the potatoe story but isn't there more than a touch of hubris in all these comments that XOM has to have IOC's gas?  Kindof like IOC having to have SHU as its PR voice on the web.  (No offense, STP, Hemi, et al).

'trans' pid='28053' datel Wrote:

'Resourcearb' pid='28045' datel Wrote:

I believe this confirms that Exxon has diverted its focus from P'nyang underpinning a 3rd or 4th train to Elk/Antelope supplying the PNG LNG expansion.  The purchase of a 50% stake in PPL 269 from NGE would have provided Exxon with a cheap option to expand its resources surrounding P'nyang, and its decision not to close this deal could be an important positive datapoint.  Why would Exxon have conducted due diligence on PPL 269 and indicated its desire to proceed with the proposed transaction, then suddenly pull out?  Were there really insurmountable disagreements on commercial matters with Talisman?  Even if there were some disagreements with Talisman, if Exxon believed that P'nyang contained 3+ Tcfe of resources that would underpin an additional PNG LNG train, it's hard to imagine it wouldn't have consummated this transaction with NGE.  Maybe the proposed NGE transaction was just a ploy by Exxon to make InterOil think it had other options?  Maybe the deal between Exxon and InterOil is effectively done, so the ploy has now been dropped?

With P'nyang being the most prospectivel field in which to develop a significant resource outside of PRL 15 (or InterOil's PPL's), Exxon seems to be screaming to the world that it expects to close a deal with InterOil.

ResourceArb......how about the "kinokudu" (sp) well being drilled right now by OSH?  This is the third well and believe OSH is going it alone on that one. Last update was around quarterly conf call by them and was down I believe 1-2 k at the time and going fairly fast?  Would appreciat a comment on that, or Peteng also......thanks , Trans

Trans - On August 22 Kidukidu-1 was at 2,220 meters and preparing to set  9 5/8” casing. Next drilling report due tomorrow. The primary objective is a submarine, basin-slope fan sandstone of Pleistocene age. This is the same objective they had with the previous two wells. Those wells did not find sufficient gas to justify development. This objective is not as deep as the Miocene Reefs. We will know more after they penetrate the objective zone and log.

'Palm' pid='28086' datel Wrote:Agree Art; "mom's" are usually careful shoppers and tight with their household budgets. If the "potatoes" today are too expensive she's likely to first try and negotiate a lower price, then move on and buy some rice and see what next week's potatoes cost. Palmer saying that he just wants to sell his find could make a deal with him happen more quickly. He's a billionaire and the net he would get is just another deal for him. He'd likely be willing to sell at a lower price due to no drilling yet. But even if he wants to de-risk it more there could be a sea-rig available very soon if OSH fails again on its last try. They were able to mobilize that rig very quickly and drill 3 wells before IOC could blink an eye.

Palm - Drilling in 3,000 - 5,000 feet of water is a much different project than drilling in 300 feet of water like the three Oil Search wells. The rig that Oil Search has would not be capable of doing the job.

I will paste below a note that I recently sent to a friend. Some folks might find something of interest:

 Palmer’s company has PPL’s 254, 255 and 256. PPL 256 is just off the coast opposite IOC’s PPL 236 and PPL 255 is off the coast south and west of Port Moresby.  http://omhlpng.com/PDF/PO8-PPL%20Map-7-10-08.pdf ; Most of the gas he claims to have found are in his leads A, B and C. These leads appear to be in PPL 256 and they are supposed to be Miocene sands. http://www.mzcan.com/projects/Resourcehouse/tc/pdf/annualreport2010.pdf page 24

We have not heard much about Miocene sands. Our Puri limestone is Miocene age but they have not mentioned any significant Miocene sandstones. The sandstones that Oil Search are presently drilling are younger than Miocene. They are of Pleistocene age.

The closest well we have drilled to the Palmer prospects is the Black Bass-1. They drilled to check a seismic anomaly that they thought was a limestone reef but it turned out to be sandstone. I don’t know if these were of Miocene age or not but they may very well be. The Black Bass well did find some gas even though it was off structure and some of the lower sands were very over pressured, requiring 14+ lb/gal mud. IOC said, at the time, that they would get more seismic in the area and come back to drill the high part of the structure but they never came back. We do have some other structures (prospects) in the area but not right at the Black Bass location.

Palmer’s A and B prospects are in about 5,000 feet of water and the C prospect is in about 3,200 feet of water. To drill in water of this depth it takes a great deal of expertise, knowledge, experience and know-how. I believe this means a super major and a drilling contractor at the level of a Transocean.  Drilling wells and developing the fields (if successful) in water of this depth will be very expensive.

Palmer has obtained some 3-D seismic which will give him the best possible information but he probably has to depend on the contractor to give him the interpretation of the data. Ordinarily you can not tell the content of the formation from seismic data but in the case of gas there is sometimes an indication in the data that leads them to believe that gas is present. This is called a bright spot and may be caused by gas molecules that have leaked through the seal above the gas bearing sand over the eons. In any case he can not declare that he has such a huge discovery until a well has been drilled, logs and cores obtain and, preferably a drill stem test of the formation. Since there is so much gas in the area, if the seismic shows that they have a structure, a trap and a seal, I would guess there is a very good chance of finding gas. I do not know how deep these reservoirs are but they will be under considerable pressure since the pressure at the sea floor will be 2,250 psi before they start drilling. Of course the higher the pressure is the more gas reserves a given pore volume will contain.

Just as IOC was fooled at Black Bass when they found sandstone instead of limestone, Mr. Palmer will not know what is present for sure until he drills. Is it sandstone or limestone? Is it gas, oil or water? Does the formation have sufficient porosity and permeability? He will need to drill a well to verify the seismic and the geological theories.