MS on Oil Search Ltd.

[calvin grad]

I am not a closet short. I prefer 3 trains to 2 trains. I don't think that can be decided without  A6  and Antelope Deep. If someone bought part of Totals interest they would also buy part of IOC's interest. That would be a positive event. I do like to ask dumb questions. I appreciate those that take the time to give me thoughtful and knowledgeable answers. I don't need to have the last word . I respect the knowledge  and character of the people on this board.

[Stavros]

Hopefully I'm mis-understanding your motives CG.

Many folks don't think that drilling A6 would increase the next Resource Estimate very much as compared to the time it would take and the associated delay in the resource payment and ultimate FID decision timing. In the end, IOC will in fact get paid for all the gas in PRL 15, as agreed in the SPA.

In terms of AD, it will not be in-play until several wells are drilled into the formation (assuming the first one finds gas and more AD wells are sanctioned) ... JFT is spot on with this

To my opinion, no company would build three trains at the first go even if they knew they had enough gas for five trains. To reach FID the Owners must pre-sell at least 75% of the LNG before any bank would even consider financing. On top of that, the entire capital cost for three trains over that required for two trains would be at risk from schedule delays. It's hard enough to build two at a time because you need thousands and thousands of workers all living close by and working at one site. Building three means thousands more workers to manage.

Perhaps in the future you can frame your questions in a way that they do not come across as dumb? It's better to carefully read what you write before posting to ensure they add value instead of unwarranted speculation. Instead of considering your post you say things like "I don't think that can be decided without A6 and AD."

Instead, you should consider something like:

"Do SHU readers think that IOC and TOTAL can potentially sanction three LNG Trains without having drilled A6 and AD? Personally I wonder if Ant-4 and Ant-5 will be enough. I think it would be a big positive if they can sanction three trains immediately."

[calvin grad]

Thanks. Now I am learning something. I did not envision all three trains coming on line at the same time. How much different is the right away for 2 versus  3 trains. Is it significantly more expensive to lay pipe for 3 trains versus 2 trains?  If  you decide to add a train 2 years later what would you  wish you had done differently. The JV is working  on those answers I am sure. Does IOC have the resources to fund  a three train project? Do the members of this board believe that Total is starting to think that they bit off more than what they wanted to chew?

[Putncalls]

CG:
If there is a profitable market it will get built. The funny thing about this oil and IOC plunge is that it widens the LNG market for PNG.
Of course that assumes that Asia uses more energy and doesn't rely on coal as much.

[Getitrt2]

I don't know everything like others on this board. I said it was my opinion . Even super majors have limited funds. How much would Total need to fund three trains.? 7 billion? Do they want that many eggs in one basket? I doubt it .it was my impression that Total  really did not want all of the percentage initially. Total has never made a big deal of  EA.  Does a third train bring the cost down .50.? Maybe total would rather have 28 percent of three trains with a cost of 7.50 than two trains with a cost of  8.00. In this time of trimming down I bet they appreciate having a place where people can be assigned. I love you too Getit .

Why don't you just stick to trying to ask informed questions about things you have read or researched for a while, and try to stop speculating and expressing uninformed opinions about things you know or understand so little about, and I'll try to stop "peaing on" you, as jft falsely charges me of doing "on everyone"!  Sorry if you feel that way.  What are you trying to accomplish?  This is not helping anyone, and you will get little response to such.

Interesting statements you made Getit. I support what you said ... except that you should have corrected JTF and told him that it's spelled "pee"

Here's my take:  There are several SHU posters who are closet shorts and want to strike fear in the hearts of longs. It's been working for a long time!

Take a look at all the posts by this fellow Calvin Grad and decide whether he is one. Lots of questions from this guy that are aimed at getting readers to second guess. None of his posts are logical. This one, for example, is hard to comprehend because if TOTAL sells off a meaningful percentage of PRL 15 ownership then IOC will become the largest stakeholder and will take over as the Operator. The PNG Government said that's a NO NO.

Look at posts by some of the folks who claim to work for Super Majors and cry about drilling results. There was speculation that Shell did all they could to drive IOC out of PNG for a song; they failed. To my view, ExxonMobil and TOTAL now want IOC gone at a low ball valuation. Hopefully they will also fail. Perhaps the Super Major employees on SHU have an agenda??

Look at some posts that talk about an imminent takeover at $60 ,with timelines that keep slipping. What's their motive?

I can go on.

Yes, they're all allowed to state their opinions on SHU (as are you and me and JFT). It's up to the readers to then recognize the patterns and motivations and respond accordingly. Which you and I also try to do.

My motive is to try my best to inform what I know and speculate on what I don't know but believe to be true. Sometimes I'm wrong. That's when what I thought to be TRUE becomes DRIVEL

Ha, Stavros, you're right!  I didn't think he was talking about the kind of peas you eat, which is why I put it in quotation marks.

You may very well be right on some of your other comments.  One really has to wonder about the source and motives of some of the unbelievably uninformed or ridiculous stuff that gets posted.

[Thylacine-2]

But, on the other hand, some of the uninformed stuff that gets posted triggers a very well informed and informative discussion. This thread is an example of that.

[Getitrt2]

cg, if you keep up with and study as needed all the relevant information published by the Company or on SHU, you will need to ask fewer questions which will be less likely to be truly dumb, which you should not "like" to do, and will be far less likely to utter ridiculous or harmful speculation if sincere.

If you did that and for example studied the drilling and project schedules along with other material in recent presentations and elsewhere, you would know in evaluating plant size they intend to incorporate A6 if approved as an additional APPRAISAL well in a thoroughly drilled and tested gas formation (Antelope), and can make that decision for at least the initial project without Antelope Deep, which is an initial EXPLORATION well to be drilled later in an apparently totally separate PROSPECTIVE formation needing additional appraisal wells and testing to evaluate it much later in the future. Furthermore, in an early January interview with the CEO Hession in "Upstream", posted on SHU, he said, "As far as crucial activities go, we're sizing the LNG project, we're drilling a series of APPRAISAL wells that will tell us whether we will HAVE TWO OR THREE TRAINS". That obviously does not include Antelope Deep. That also obviously means, imo, they will consider having three trains in the initial project, in one way or another.

In that same interview, Hession says, "We may bring in a buyer, which will involve selling LNG volumes. You sell A LITTLE BIT OF EQUITY TO AN OFFTAKER, I can see that happening." I feel sure that is the only circumstances where they would consider selling more interest, to help attract or satisfy an offtaker, and that you are wrong that both would have to sell some interest. Whether it would be a "positive event" would be a subjective judgment involving what it accomplishes, the price received, the LNG interest given up, etc. Maybe PNG would even sell a little, who knows?

I cannot imagine why you would think "Total is starting to think that they bit off more than what they wanted to chew". They have or are building or planning multiple projects more difficult than PNG, and I believe this one is the most economical and has huge potential in more ways than one.

Personally, I would appreciate your enacting some suggestions here and not needing so much time and effort from others like myself in answering such basic questions and explaining so much for you, although I recognize you are apparently fairly new. I also think you should consider the potential impact of negative speculation on potential buyers of the stock.

[Palm]

But, on the other hand, some of the uninformed stuff that gets posted triggers a very well informed and informative discussion. This thread is an example of that.

Good point Thy and this thread also shows examples of another issue some posters have in conveying their thoughts and that is run-on sentences where sometimes complete paragraphs consist of one sentence with many commas instead of using proper punctuation which in my opinion makes it difficult to read and understand what the poster is trying to say, because it's exhausting to read and try and make sense of the point trying to be made, so in the end it is not much better than saying nothing at all, I think you'd agree.

[Getitrt2]

Thanks for pitching in, Stavros. We have much agreement, but a few comments for your consideration.

You may be right on A6 in some respects, depending on what it confirms. However, I think the information from that evaluation of the eastern part of the formation will be worthwhile regardless, and trust management in that decision, and ANY increase in estimates is gravy and worth much more now than years in the future, especially with a carry available. Furthermore, they have it built into the drilling schedule for year-end payment, with much of the work overlapping extended flow tests on A5 and other wells. Also, none of the LNG project schedule they published is dependent on A6, which should have little if any effect on FID timing.

I disagree with much of what you said on three trains if the gas and the market are there, which management appears to believe will be the case. I think they can plan and engineer for the option of a third train, including environmental and social issues, etc., without much incremental cost, and for 50% more revenue, such things as site preparation, three-train capacity pipelines, and other infrastructure, and various overhead costs could improve the economics and profitability significantly, even if they needed to perform some direct train construction, etc. sequentially with common manpower. Every train does not have to start production simultaneously even as a single project, and I don't think did at PNG LNG. They could perhaps even build two larger trains. Exxon built very long three-train pipelines for PNG LNG for two trains, with one-third of it unused for years to come because of too little gas, and that project is considered relatively cost-effective. What an advantage and bonus if Antelope LNG has the gas for three initially, it seems to me!

[Getitrt2]

But, on the other hand, some of the uninformed stuff that gets posted triggers a very well informed and informative discussion. This thread is an example of that.

Good point Thy and this thread also shows examples of another issue some posters have in conveying their thoughts and that is run-on sentences where sometimes complete paragraphs consist of one sentence with many commas instead of using proper punctuation which in my opinion makes it difficult to read and understand what the poster is trying to say, because it's exhausting to read and try and make sense of the point trying to be made, so in the end it is not much better than saying nothing at all, I think you'd agree.

HO, HO, Palm, I wonder who you're talking about?!  Some sentences would probably be easier for readers if broken up into two or three, but most are not that long.  I think you're overstating otherwise, however.  I challenge you to identify many errors in my almost impeccable punctuation where it is not proper, even if you would prefer it broken up into shorter, simpler sentences that might be better for most readers.  I'm sorry you had to work so hard, but I had to work even harder to write and review it for correctness.  However, as long as the content is essentially correct, I think to say that makes it "not much better than saying nothing at all" is incorrect and totally inappropriate.  Reading it is optional for you, also.  (Is that paragraph better?!)

By the way, your one-"sentence" paragraph above is probably the worst "run-on" sentence in the thread, with extremely poor punctuation, and the best example of what you are talking about.  Was that intentional?  HO HO!

HAVE A GREAT WEEKEND, SERIOUSLY!!!  I sure need one.