On Friday, an article titled “Fijian workers to work in PNG Gulf province” was published in the Fijian press -  http://www.fijivillage.com/?mod=story&id=300813d450693fb6646c9a62f05cd7, stating that “Fiji’s High Commissioner to Papua New Guinea Romanu Tikotikoca said they had approached the Governor of the Gulf province, Havila Kavo for people from Fiji to work in the Gulf province when the Liquefied Natural Gas project begins… According to Tikotikoca, the Ba and Tavua provinces accepted the offer which will lead to Fijian people working in the Gulf province soon.”

Hence Gulf Governor Kavo, who has been meeting with InterOil and DPE Minister Duma recently and has presumably been one of the few government officials kept apprised of InterOil’s progress, anticipates the Gulf LNG Project to move ahead “soon”.  This is an encouraging sign, as it implies that:

1. The Exxon deal is nearing completion, enabling the Gulf option to be exercised shortly with a major operator, and
2. Governor Kavo seems to have accepted InterOil’s development plans, which extend beyond a single train at PNG LNG

As Russell Searancke Wellington indicated in the Upstreamonline article a week ago, "Sources said Exxon­Mobil is keen to close the deal as soon as possible, given the end of the exclusivity period and InterOil being receptive to other offers."  While market participants have largely ignored recent indications of progress such as this statement by the most connected oil & gas reporter in PNG and a confirmation by Exxon on its conference call of the importance of closing a deal with InterOil, the evidence of an imminent deal announcement is mounting.

Even Raymond James, which has correctly had an aversion to predicting the timing of InterOil’s future developments given the company’s persistent historical delays, surprisingly published a note late on Friday afternoon predicting the selldown to Exxon will close this month.

If Stavros’ information about four bidders in addition to Exxon actively seeking a stake in the resources is accurate (and I believe it is), I think we can expect a subsequent selldown of PRL 15 and possibly one or more PPL’s (probably at a significant premium to the Exxon transaction) shortly after the Exxon deal is concluded.  PNG gas is becoming a primary focus for at least 3 of the world’s largest supermajors, and InterOil’s geology team believes the entire reefal cluster is centered in its onshore acreage.  Oil Search’s Gulf drilling failures further highlight the scarcity value of InterOil’s acreage.

The O’Neill administration has been supportive of InterOil and quite entrepreneurial in accelerating resource monetization recently.  In fact, yesterday an article titled “Delegation visits as PNG opens to Indian investment” (http://asopa.typepad.com/asopa_people/2013/09/delegation-visits-as-png-opens-itself-to-indian-investment.html?utm_medium=twitter&utm_source=twitterfeed) was published.  According to the article, “Papua New Guinea has found huge reserves of crude oil and gas which are being explored by leading Indian companies Petronet LNG and Oil and Natural Gas Corporation (ONGC)”, said Speaker Theodore Zurenuoc at a meeting organised by the Mumbai World Trade Centre and the All India Association of Industries”.  Recall that ONGC just purchased a 10% stake in Anadarko’s Mozambique gas block for $2.64 billion, more than an 18% premium to PTT’s acquisition of Cove Energy last year.

LNG in PNG is on fire, and the M&A activity in East Africa is about to spill into PNG with multiple bids on the table for InterOil’s resources.  The lapse in exclusivity and recent Shell bid have clearly accelerated negotiations with Exxon, and I anticipate a deal to be announced imminently followed by additional sell-downs and/or farm-ins at premium values as well as offers for all of InterOil.  Such catalysts, in conjunction with the spudding of the first Wahoo well as soon as next month, set the stock up for an unprecedented run higher in the coming weeks.

'jft310' pid='28229' datel Wrote:When not if we get 2 LNG deals I think IOC will rise quickly to $135 a share. IMHO.

Now you are sounding more conservative  than me.

Should 2 LNG deals eventuate then I would expect at least $200 as a target price.