Missing Clues on Exxon Talks

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Missing clues on Exxon talks

Blair Price Wednesday, 14 August 2013 INTEROIL was coy on the progress of its Papua New Guinean deal-making talks with ExxonMobil in its recent quarterly report, with the results including a net loss of $US13.2 million. Gas flare at Elk-4 The exclusive negotiations with Exxon over a significant slice of InterOil’s Elk-Antelope discoveries were mentioned once in the quarterly results, aside from general comments on “monetisation” of its gas fields. InterOil previously revealed that Exxon wanted 4.6 trillion cubic feet of Elk-Antelope gas to support the long-vaunted third train expansion of the PNG LNG project, which will start exporting next year, as later confirmed by Exxon officials. There are some views that new InterOil chief executive officer Michael Hession will be more conservative than his predecessor on discussing matters such as the Elk-Antelope talks, especially given his background with Western Australian petroleum player Woodside. While the previously announced 60-day period of exclusive negotiations between InterOil and Exxon has passed, an InterOil-connected source toldPNGIndustryNews.net the exclusivity period was ongoing. A rig remains in place to spud the Elk-3 well in Gulf province once a deal over its Elk-Antelope field is made, while InterOil is also starting to advance plans to spud a well targeting the Wahoo prospect in licence PPL236 to the southeast of its PNG tenement portfolio. In terms of the financial results, the net loss of $13.2 million was an improvement from the $31.7 million it clocked up in the corresponding period of 2012. The sole oil refiner of PNG, InterOil’s downstream segment had a 28% year-on-year fall to $4.3 million in net profit for the June quarter. InterOil said it reflected a slowing PNG economy, especially the fall in high-margin jet “A1” fuel volumes. New York-listed InterOil shares were down by 10% to $75.51 by the time of publication.