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THE DEAL - IOC press release - cybersssss - 12-06-2013
InterOil Selects Total SA for PNG Gas Development
- Transformational transaction to monetise InterOil's Elk-Antelope fields
- InterOil to maintain a material 30% interest in integrated LNG development
- Highly-credentialed partner to facilitate certainty of development
- Illustrative final transaction price of US$1.5 - US$3.6 billion (for a range of 5.4 - 9.0 tcfe of hydrocarbon gas equivalent), with payments to be based on appraisal drilling and certification
- Limited conditions with completion expected in Q1 2014
InterOil Corporation
1 minute ago
PORT MORESBY, Papua New Guinea and HOUSTON, Dec. 5, 2013 /PRNewswire/ -- InterOil Corporation (NYSE: IOC; POMSoX: IOC) has agreed to sell to Total S.A. (CAC: TOT; NYSE: TOT) a gross 61.3% interest in Petroleum Retention License 15 ("PRL15"
which contains the Elk-Antelope gas fields in the Gulf Province of Papua New Guinea, and has also granted Total an exclusive right to negotiate a farm-in to all its exploration licenses in Papua New Guinea.
which contains the Elk-Antelope gas fields in the Gulf Province of Papua New Guinea, and has also granted Total an exclusive right to negotiate a farm-in to all its exploration licenses in Papua New Guinea.
Agreements covering the sale and purchase of the PRL 15 interests, proposed liquefied natural gas ("LNG" project, and the exploration farm-in rights, were signed today in Port Moresby by InterOil's chief executive Dr. Michael Hession and Total Exploration & Production Senior Vice President Asia Pacific, Jean-Marie Guillermou.
project, and the exploration farm-in rights, were signed today in Port Moresby by InterOil's chief executive Dr. Michael Hession and Total Exploration & Production Senior Vice President Asia Pacific, Jean-Marie Guillermou.
The transaction price depends on appraisal and certification of Elk-Antelope, with illustrative payments of approximately US$1.5 billion - US$3.6 billion, *for a range of 5.4 trillion to 9.0 trillion cubic feet of hydrocarbon gas equivalent ("tcfe".
.
The agreement with Total provides for fixed and variable resource-based payments:
Fixed payments to InterOil include US$613 million on transaction completion, which is expected in Q1 2014; US$112 million on a final investment decision for a new LNG plant; and US$100 million at first LNG cargo from the proposed LNG facility.
In addition to these fixed amounts, variable payments for amounts in excess of 3.5 Tcfe for the gas resource will depend on certification by two independent certifiers following up to three appraisal wells to be drilled in PRL15.
In addition, Total has agreed to make a payment of US$100 million per tcfe for volumes over one tcfe for additional resources discovered in PRL15 from one exploration well. Any payment would be made at first gas from the proposed Elk-Antelope LNG facility.
Total will carry the cost of the drilling for the appraisal well program. The program and certification of Elk-Antelope is expected to be completed in 2015.
Total will lead construction of and operate the proposed integrated LNG project, a final investment decision on which will follow reserves certification, basis of design and front-end engineering and design.
Total also has an option to take an interest in all of InterOil's exploration leases in Papua New Guinea (PPLs 236, 237 and 238), which InterOil will continue to operate.
Total and InterOil have also agreed to explore other business opportunities both in Papua New Guinea and elsewhere in the Asia Pacific region.
Today's agreement follows an extensive international competitive bidding and evaluation process for development of InterOil's interests in Papua New Guinea.
Dr. Hession said today's transformational, company-making transaction would significantly benefit InterOil shareholders and the Papua New Guinea people.
"It is satisfying that Total, one of the world's largest international oil and gas companies, shares our faith in developing Elk-Antelope, a world-class hydrocarbon resource and one of the largest discoveries in Asia in the past 20 years," Dr. Hession said.
"Total is a world-class operator and will bring experience and expertise to a development that will diversify Papua New Guinea's hydrocarbon sector.
"InterOil, with more than 1,000 employees, is already a significant contributor to Papua New Guinea's economy and we remain confident that this deal will lead to continued investment, increased Government revenue and job creation, particularly in the Gulf Province.
"We will work alongside Total to help develop further expertise among Papua New Guineans in the country's oil and gas industry.
"We will also work with the Papua New Guinea Government to develop proposals for setting aside gas for generation of affordable electricity throughout Papua New Guinea.
"This is a great day for InterOil's investors, Papua New Guinea, and the people who work for us."
Dr. Hession added that the transaction was a key to meeting the company's priority objectives of maximising shareholder value, monetising Elk-Antelope, progressing development of an integrated LNG project, strengthening its financial position, and continuing its extensive exploration program.
Funds from the transaction will be applied to retiring debt, exploring and appraising activities and to funding InterOil's share of the Elk-Antelope development.
The Chairman of InterOil, Dr. Gaylen Byker, said today's transaction was a landmark for investors, who had stuck by the company since its formation in 1997.
"This is a significant event in the company's history, and we look forward to growing this company along with Total for the benefit of our shareholders and for Papua New Guinea."
The transaction is expected to complete in Q1 2014.
InterOil was advised by Credit Suisse.
Completion of the agreements is subject to conditions, including government approvals and acquisition of the minority interests in PRL15.
These conditions are expected to be satisfied by Q1 2014.
Agreements have been reached with most of the minority interest holders in PRL 15.
The table below shows the gross interests after completion of the acquisition of the minority interests.
Gross Interests in PRL 15, post-acquisition of the Pacific LNG minority interests in PRL15
Entity
Gross interests
pre-transaction
Gross interests post-transaction
Net working interests post-transaction
InterOil
75.6114
38.7097
30.0
Total SA
0
61.2903
47.5
Indirect participating interests
24.3886
0
0
PNG Government and landholders1
0
0
22.5
Total (%)
100.00
100.00
100.00
1Assumes the Papua New Guinea Government and landholders in PRL15 exercise their rights under the PNG Oil and Gas Act to take their respective 20.5% and 2% interest in the licence when a petroleum development licence is issued.
* Based on InterOil's 2012 existing independent resource estimates by GLJ Petroleum Consultants Limited for the Elk-Antelope fields, 2012 InterOil annual report.
About InterOil
InterOil Corporation is developing a vertically integrated energy business with a primary focus on Papua New Guinea and the surrounding region. InterOil's assets include petroleum licenses covering about 3.9 million acres (about 1.6 million hectares), an oil refinery, and retail and commercial distribution facilities, all in Papua New Guinea. The company employs over 1000 people and is listed on the New York and Port Moresby stock exchanges.
As at 31 December 2012
Case
Elk / Antelope contingent(1)(2)
Low
Best
High
Initial recoverable sales gas (Tcf)
6.83
9.07
10.85
Initial recoverable condensate (MMbbls)
111.5
135.4
156.3
Initial recoverable (MMboe)
1,250.1
1,646.3
1,965.4
*
(1) These estimates represent 100% of the Elk and Antelope fields
*
(2) The "low" estimate is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. With the probabilistic methods used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate. The "best" estimate is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. With the probabilistic methods used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate. The "high" estimate is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. With the probabilistic methods used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate
About Total
Total is the world's fifth largest publicly traded, integrated oil and gas company with nearly 100,000 employees in more than 130 countries and oil and gas exploration and production in more than 50 countries. The company's head office is in Paris and more than a quarter of Total's shareholders are based in France. Total has a market capitalization of more than US$120 billion. The company was founded in 1924 and was a pioneer in the creation of the liquefied natural gas industry in Algeria in 1964. Total has LNG interests in Australia, Angola, Indonesia, Nigeria, Norway, Oman, Qatar, Russia, United Arab Emirates and Yemen. Total is listed on the Paris, New York, London and Brussels stock exchanges.
RE: The deal ioc press release - Palm - 12-06-2013
Big cash up front! Then to be noted; this is for PRL 15, not just EA. We can be pretty comfortable that there will be more than 9Ts in PRL 15. This will likely be bigger than some realize.
RE: The deal ioc press release - Palm - 12-06-2013
This does state that Total will operate the LNG plant. Interesting.
RE: THE DEAL - IOC press release - mlbennetts - 12-06-2013
No mention of what is to happen with condensates. Must be at least another deal in the pipeline.
And does this spark a takeover battle?
RE: The deal ioc press release - johnwgrant - 12-06-2013
(12-06-2013, 12:21 PM)Palm Wrote: Big cash up front! Then to be noted; this is for PRL 15, not just EA. We can be pretty comfortable that there will be more than 9Ts in PRL 15. This will likely be bigger than some realize.
In addition, Total has agreed to make a payment of US$100 million per tcfe for volumes over one tcfe for additional resources discovered in PRL15 from one exploration well. Any payment would be made at first gas from the proposed Elk-Antelope LNG facility.
Hmmm... from 1 exploration well... Does InterOil think that their new prospect (Bobcat? Note: correction per Petrengr1 - s/b Bighorn) between Elk/Antelope and Triceratops may be a big winner !?!?!
RE: THE DEAL - IOC press release - SamAdams - 12-06-2013
Total wll get any of the condensates related to their share. They're not just buying dry gas. I think the $7.2 bln estimate is probably right or 50% of IOC's interest. All good. Thanks to Admin, Palm, Tree, Petengr , JFT and all the others who are too numerous to thank individually for SHU and all the DD. Bring on the drilling reports. Always preferred a Friday announcement to hammer the shorts before a weekend. Do you cover? What if XOM isn't happy?
RE: THE DEAL - IOC press release - CesiumFormate - 12-06-2013
"Total will lead construction of and operate the proposed integrated LNG project, a final investment decision on which will follow reserves certification, basis of design and front-end engineering and design."
I am not sure I understand the press release. Does the statement above mean that Interoil also has a 30% working interest in an new LNG facility? If so, this deal is worth more than just the price of the gas. Can someone please clarify.
CF
RE: The deal ioc press release - petrengr1 - 12-06-2013
'johnwgrant' pid='32982' datel Wrote:
'Palm' pid='32974' datel Wrote:Big cash up front! Then to be noted; this is for PRL 15, not just EA. We can be pretty comfortable that there will be more than 9Ts in PRL 15. This will likely be bigger than some realize.
In addition, Total has agreed to make a payment of US$100 million per tcfe for volumes over one tcfe for additional resources discovered in PRL15 from one exploration well. Any payment would be made at first gas from the proposed Elk-Antelope LNG facility.
Hmmm... from 1 exploration well... Does InterOil think that their new prospect (Bobcat?) between Elk/Antelope and Triceratops may be a big winner !?!?!
I expect the one exploration well in PRL 15 will be the Bighhorn prospect where they are currently obtaining seismic data.
RE: THE DEAL - IOC press release - sageo - 12-06-2013
'mlbennetts' pid='32978' datel Wrote:No mention of what is to happen with condensates. Must be at least another deal in the pipeline. And does this spark a takeover battle?
'ml'-- My first question ! (condensates !!!) - If we still have those,our refinery is going to look like " the jewel of the Nile",,,er I mean the jewel of PNG. Love those condensates.
RE: THE DEAL - IOC press release - Palm - 12-06-2013
'CesiumFormate' pid='32990' dateline='<a href="tel:1386298 Wrote:"Total will lead construction of and operate the proposed integrated LNG project, a final investment decision on which will follow reserves certification, basis of design and front-end engineering and design." I am not sure I understand the press release. Does the statement above mean that Interoil also has a 30% working interest in an new LNG facility? If so, this deal is worth more than just the price of the gas. Can someone please clarify. CF
CF,
I would guess that it does. PNG has stated they want these projects to be fully integrated. Also Hession stated that the deal would be straightforward and a "standard" agreement. So this is huge. The other thing we are not mentioning is the statement in the PR that IOC and Total will explore other opportunities in the Asia/Pacific region. This is huge and shows the value Hession and his team add. They are respected and valued by someone like Total. That's also huge.