Blowing Cold- Not a TOTAL Failure

[Tree]

No joy for InterOil at Wahoo

Blowing cold: InterOil finds nothing at Wahoo-1 appraisal

TARO TAYLOR

Eoin O'Cinneide 

 12 August 2015 08:44 GMT

InterOil is plugging and abandoning a sidetrack well in Papua New Guinea after failing to intersect a carbonate reservoir.

The explorer is quitting the Wahoo-1 probe on PPL 474 after drilling to a measured depth of 1589 metres, it said on Wednesday.

The well was, however, not a total failure as Michael Hession said: “The well has increased our knowledge in an under-explored area. It has confirmed a working hydrocarbon kitchen, the presence of thermogenic gas and an effective seal in the Orubadi mudstone.

“Information obtained from the well will assist in evaluating future targets in this frontier area.”

InterOil resumed drilling in early June at the Wahoo prospect where higher-than-expected pressure and gas entering the wellbore halted a probe last summer.

The sidetrack was a follow-up to the problematic Wahoo-1 probe where progress was suddenly halted by a safety alert last July when InterOil unexpectedly struck gas well above its target zone.

InterOil had begun drilling at Wahoo-1, a multi-trillion-cubic-foot gas prospect, in early March last year. It ended up striking “significant concentrations” of methane, ethane, propane and butane.

[CAC]

[quote='Tree' pid='61593' dateline='1439378884']

No joy for InterOil at Wahoo

Blowing cold: InterOil finds nothing at Wahoo-1 appraisal

TARO TAYLOR

Eoin O'Cinneide 

 12 August 2015 08:44 GMT

InterOil is plugging and abandoning a sidetrack well in Papua New Guinea after failing to intersect a carbonate reservoir.

The explorer is quitting the Wahoo-1 probe on PPL 474 after drilling to a measured depth of 1589 metres, it said on Wednesday.

The well was, however, not a total failure as Michael Hession said: “The well has increased our knowledge in an under-explored area. It has confirmed a working hydrocarbon kitchen, the presence of thermogenic gas and an effective seal in the Orubadi mudstone.

“Information obtained from the well will assist in evaluating future targets in this frontier area.”

InterOil resumed drilling in early June at the Wahoo prospect where higher-than-expected pressure and gas entering the wellbore halted a probe last summer.

The sidetrack was a follow-up to the problematic Wahoo-1 probe where progress was suddenly halted by a safety alert last July when InterOil unexpectedly struck gas well above its target zone.

InterOil had begun drilling at Wahoo-1, a multi-trillion-cubic-foot gas prospect, in early March last year. It ended up striking “significant concentrations” of methane, ethane, propane and butane.

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Who knows what, if any, buyout offers Hession has seen, but I hope this news allows him to consider using the upcoming TOT payment as a catalyst to get those funds into the hands of shareholders.  If the "string of pearls" theory may be "pie in the sky", and if their seismic technology (or ability to interpret that data) isn't as strong as many assumed it was, then "cashing out", rather than spending the TOT funds over the next few years, might be a reasonable way to go.

[Palm]

Those comments are interesting. Sounds like they may do a bit more seismic and pick another spot someday. But for now focus is on PRL15

[jft310]

The entire Total payment needs to be used to build the LNG plant and to pay corporate overhead as the plant is built . I expect zero return of cash to shareholders from the Total cash payment .

[Palm]

From trusted SHU-ite. Per Pavel this AM

"Obviously a dry hole is never a good thing. But it is unlikely to move the stock much today. The market is too focused on the E/A resource certification, which is the key business development milestone coming up, expected in 4Q15/1Q16. In any case, this is an under explored area, and dry holes are inevitable along the way."

We shall see but with pps whacked so hard recently may not have been much left in for Wahoo.

[CAC]

'jft310'  -- The entire Total payment needs to be used to build the LNG plant and to pay corporate overhead as the plant is built . I expect zero return of cash to shareholders from the Total cash payment . [/quote]

*******

Maybe my point was poorly articulated.  The idea, JFT, did not involve a proposed dividend, but rather a "return of cash" via a complete buyout.  The business model of "find gas; monetize it; and repeat" only works if there are some "repeats".  If an entity spends lots of money trying, but failing, to "repeat", then a lot of money/shareholder equity is spent/lost as part of that process.  Wahoo should illustrate that.  

[ArtM72]

'jft310'  -- The entire Total payment needs to be used to build the LNG plant and to pay corporate overhead as the plant is built . I expect zero return of cash to shareholders from the Total cash payment .

*******

Maybe my point was poorly articulated.  The idea, JFT, did not involve a proposed dividend, but rather a "return of cash" via a complete buyout.  The business model of "find gas; monetize it; and repeat" only works if there are some "repeats".  If an entity spends lots of money trying, but failing, to "repeat", then a lot of money/shareholder equity is spent/lost as part of that process.  Wahoo should illustrate that.  

[/quote]

I would only suggest at this time we only know there was not a carbonate reservoir found.  Lots of other rock types hold gas.  Wahoo isn't necessarily a write off.

[jft310]

When I look at the seismic and render an opinion that's dangerous . I see zero red and blue etc highlighted areas where the sidetrack was drilled . Again dangerous but I would think we would return to Wahoo again.

[CAC]

'jft310'  -- The entire Total payment needs to be used to build the LNG plant and to pay corporate overhead as the plant is built . I expect zero return of cash to shareholders from the Total cash payment .

*******

Maybe my point was poorly articulated.  The idea, JFT, did not involve a proposed dividend, but rather a "return of cash" via a complete buyout.  The business model of "find gas; monetize it; and repeat" only works if there are some "repeats".  If an entity spends lots of money trying, but failing, to "repeat", then a lot of money/shareholder equity is spent/lost as part of that process.  Wahoo should illustrate that.  

I would only suggest at this time we only know there was not a carbonate reservoir found.  Lots of other rock types hold gas.  Wahoo isn't necessarily a write off.

********

Lots of hypothetical scenarios are possible I guess, but if that's how they really feel, I'd hope their paid PR team would have stated that in the release.

[jft310]

Can you wait till 8 tomorrow for details .whatever they may be