Just thought a quick update on some of the SPA terms was in order to clarify some of the ongoing discussions per additional wells under the SPA:

Under Sectiton 3.8 of the SPA, regarding Appraisal Carry Costs (ACC), Total agreed to carry the costs on a maximum of 3 appraisal wells in the E/A field (These would be Ant 4, 5, and 6). Total agreed to pay up to $50 million per appraisal well (50% of which will be repaid by IOC as a deduction from the Interim Resource Payment which will now be paid perhaps in 1H2016-under Section 3.4©). Thus, there is no provision for any carry of costs should the JV parties decide to drill a 4th appraisal well (Ant 7-see below under Section 8.1 discussion).

Under Section 3.11, regarding Carry and Discovery Bonus, Total also agreed to pay up to $60 million for 1 Exploration well to be drilled within PRL 15, but outside the E/A field. This would be Ant South 1. If a discovery is made with this well, Total will pay IOC an additional $100 million for each 2C certified Tcfe gas or condensate (or pro-rata portion of either) over the first Tcfe discovered. This payment is payable at first cargo, and not as part of the Interim Resource Payment.

Total and IOC did, however, agree (under Section 8.1 of the SPA), that there could be 1 or more additional appraisal wells drilled (beyond the 3 carried appraisal wells, as long as such drilling does not delay FID or any parties ability to drill the additional Carried Discovery Well (Ant South 1). This would apply to allow the drilling of Ant 7 if it did not impact FID or delay Ant South 1. Any such additional appraisal well would not be subject to carry by Total and would be paid by each party per their ownership.

I believe that I've summarized correctly, but correct me if I'm wrong. Hope this helps...

'Palm' pid='59336' datel Wrote:One thing to note that I had pointed out last week. The $50 million is not their carry for IOC; it's the total cost (costs on a "100% basis" of each well subject to the carry. And then they pay 75% of IOC's % share of PRL 15 when cash calls are due. Then once a well's $50 million (on a 100% basis is reached, the carry is over. Quite a difference from what I think most people believe; that Total will carry $50 million of IOC's appraisal costs on these wells. So now IOC is responsible for $18,250,000 of the first $50 million. Total will carry 75% of that or $13,687,500 and IOC must pay $4,562,500. And then IOC will pay their 36.5% of every dollar above the $50 million (on a 100% basis) on any of the wells. Obviously a very good thing still, but the $50 million is not the carry amount. Just to clarify. Same goes for Ant6; $60 million is appraisal costs on 100% basis.

That is correct. Thanks for the clarification on that point. Also, though, I believe the $60 million is for the exploration/discovery well which would be Ant South 1.

'cybersssss' pid='59335' datel Wrote:Hey putz. In my view it would only delay the resource payment. Not fid. They can work on feed once they know they have enough for two trains.

I guess it delays FID only if Total AND IOC want more/bigger trains,