I'm really getting this gut feeling

[Stavros]

Other positive thoughts for a Saturday evening while waiting for yhe Yankees-Royals game:

What if the formation at Wahoo is significantly deeper than they expected? That would be a good outcome but one that resulted in longer drilling time that brings it in line with the Bobcat and Raptor 90 day expectations, correct?

AND ... since this is the field that XOM is most interested in, perhaps they have people at the drill site watching carefully and evaluating results continuously with a lid on news until they strike a farm-in deal???

[admin]

On the danger of oversymplifying things (and overtaxing your time and displaying my lack of back), are well problems greatly correlated with the presence of hydrocarbons? That is, without the latter there is little chance of the former? If so, at least that old Cruyff maxim (every disadvantage has its advantage) still holds..

[jft310]

Stavros would have a better feel than most others with his experience and contacts. It's over pressured drilling and they are taking their time to prevent injury . That makes the most sense to me.

[Kaliboo]

On the danger of oversymplifying things (and overtaxing your time and displaying my lack of back), are well problems greatly correlated with the presence of hydrocarbons? That is, without the latter there is little chance of the former? If so, at least that old Cruyff maxim (every disadvantage has its advantage) still holds..

The short answer.  No.  That sticky shale Hession mentioned is a good example. It's presence does not ensure hydrocarbons will be present beneath or above it.

Shales/clays can be the worst.

[Getitrt2]

Thanks for all that, Kaliboo. A little scary but very informative and interesting.

Let me raise another issue. It's my understanding that most of the testing and evaluation of what is going on and is being found is done mostly by third-party service firms, e.g. Weatherford for one. I've also heard, a long time ago, that in a place like PNG scheduling and getting in country and in place all the people and equipment needed and getting it done can be very problematic and gets even moreso with multiple simultaneous wells. Maybe that is proving to be more problematic and taking longer than anticipated by management new to drilling these kinds of well in PNG. Maybe there have even been some times when such people have not been in place when needed. Any thoughts on that from our resident experts?

[Kaliboo]

Thanks for all that, Kaliboo. A little scary but very informative and interesting. Let me raise another issue. It's my understanding that most of the testing and evaluation of what is going on and is being found is done mostly by third-party service firms, e.g. Weatherford for one. I've also heard, a long time ago, that in a place like PNG scheduling and getting in country and in place all the people and equipment needed and getting it done can be very problematic and gets even moreso with multiple simultaneous wells. Maybe that is proving to be more problematic and taking longer than anticipated by management new to drilling these kinds of well in PNG. Maybe there have even been some times when such people have not been in place when needed. Any thoughts on that from our resident experts?

Correct.  I've heard the logistics can be really bad elsewhere so I imagine PNG could be among the worst.  If you need something and it's not in country, you are in big trouble.  Hence you standardize all you can.

[Palm]

And to add to the logistics load the company is taking on with the 3 wells being drilled another note from what Hession said the are doing at the same time; additional seismic work in their license areas. For far too long there was little going on; now they have gone from zero to warp speed in less than a year.

[Stavros]

As you intimate Palm, it takes money to make money. Until recently all IOC had was money from Clarion and the IPI Group, which was not enough to do the full "E" that's required to become a real "P"

I guess that's why IOC is willing to now entertain offers from additional partners to enable more "E" etc and etc.

InterOil (IOC), Total SA (FP)’s partner in a natural gas project in Papua New Guinea (PNG) has been approached for stakes in the PNG exploration licenses (06/04/14). The targeted Blocks cover about 4.0MM acres surrounding IOC’s Elk and Antelope discoveries with Paris-based Total. The drilling activities in the four areas began in March as part of a $300.0MM program and initial results are expected in the next several weeks. (Source: Bloomberg)

[Palm]

And another thing to keep in mind as to why they are waiting until the wells are complete before releasing info. As Stavros mentions and we've mentioned recently elsewhere; they need money to continue at this pace. They have the $250 million line from the consortium of banks which they are trying to get renegotiated to a longer term loan. This loan was extended to June 30. They will want to have the chance to share as much of the drilling results as possible with the banks to support turning the loan into LT and possibly even increasing the cap.