'admin' pid='33281' dateline='<a href="tel:1386361 Wrote:["I dont think we are getting 1.29 on anything found in the "discovery well"...just the 100 mill per 1TCF after the first TCF. Hession said everyone involved(all bidders) were licking their chops over the "elephant" they think they have found with seismic work already done."] Yea, that's how I understood it as well and it's the only part of the deal I don't like either. I've long favored to sell of all of E/A and with the money simply to do a lot of exploration and feed that to one, or both of the LNG plants (providing the new E/A owner would build one, but why wouldn't they), or partner again for LNG participation. In that case we wouldn't have to sell elephants (in PRL15) for pennies. Luckily we still have chances in the other two licenses. Anyway, that's all history now

Yes, unfortunately I agree Croozer/Admin. First read missed the "appraisal" requirement and according to SPA appraisal wells are only applicable to EA portion of PRL15. Discovery Bonus applies to other other Ts within PRL15. As you say STP we have other very good prospects to go.  What will PRL39 bring? Time will tell. Good catch Croozer

'Thylacine-2' pid='33291' datel Wrote:The elephant is not a discovery yet. It's still a prospect. If it is a big discovery we get more than pennies. We get "certainty of development" (Hession's goal) in an LNG project in which we own 30%.

That is a good point and one that I forgot he mentioned the "certainty of development".  I really thought E/A alone would be enough for "certainty of development" but getting 30% of production on 10 additional T will be nice...unfortunately not for another 5-6 years.

'admin' pid='33289' datel Wrote:

'ltinvest' pid='33285' datel Wrote:I still don't think I understand the "bonus" money. This is for PRL 15 only....correct? Hession mentioned everything over 1TCF they get $100 million for every 1 TCF. He specifically said if they certified 11 Tcf at PRL 15 they would get $1 Billion additional from TOT. Did I mishear or misunderstand this?

That's how I understand it, fwiw.

The way I understand it is that for each TCF of newly discovered oil (not E/A) in PRL 15, we get a bonus from Total of $100 million. As I heard him, he was discussing the elephant prospect at the time and the 11 TCF number rewarding us with $1 Billion was just an example of how it works.  It might have gone down better if Hession had put less energy into discussing the icing on the cake and focused on the cake.  He might have been mistaken in assuming that it would be understood by all that the resource is monetized and we will have 30% of what will likely turn out to be a multi-train LNG project.  The signicance of a possible 11 TCF  "elephant" in the licence area isn't that we get another $1 Billion from Total.  It's that 11 TCF supports two more trains.

'Thylacine-2' pid='33307' datel Wrote:

'admin' pid='33289' datel Wrote:

[quote='ltinvest' pid='33285' dateline='1386362474'] I still don't think I understand the "bonus" money. This is for PRL 15 only....correct? Hession mentioned everything over 1TCF they get $100 million for every 1 TCF. He specifically said if they certified 11 Tcf at PRL 15 they would get $1 Billion additional from TOT. Did I mishear or misunderstand this?

That's how I understand it, fwiw.

The way I understand it is that for each TCF of newly discovered oil (not E/A) in PRL 15, we get a bonus from Total of $100 million. As I heard him, he was discussing the elephant prospect at the time and the 11 TCF number rewarding us with $1 Billion was just an example of how it works.  It might have gone down better if Hession had put less energy into discussing the icing on the cake and focused on the cake.  He might have been mistaken in assuming that it would be understood by all that the resource is monetized and we will have 30% of what will likely turn out to be a multi-train LNG project.  The signicance of a possible 11 TCF  "elephant" in the licence area isn't that we get another $1 Billion from Total.  It's that 11 TCF supports two more trains.

Thylacine....excellent, excellent point!

I agrree but I thnk the wrinkle we're missing and what i probably shoudl have clarified is not hte TOT will PAY IOC $1.29 for those 3Ts but that they are WORTH $1.29 from a valuation point of view.  TOT doesn't keep the extra 10 Ts - they keep their share.  So if E/A values the company at around $100, you then have this potential elepphant, plus triceratops plus an LNG plant etc.  So this elephant might be off a couple of years but could add $85 to the value pre discount etc.  It supports the valuation not to mention all the other things going on.  This could have all been presented better.

1) monetization deal that values the copmany at $95-$100 with upside from current resource estimates

2) Ellephant like new Structure within PRL 15, but outside the E/A fields

3) All othe rpospects

4) All flowing to the LNG project we will have a 30% stake in.