Consensus Loss -$.07

[admin]

["How would you like to also be a working guy smaller drilling partner chipping in 20$ thousand 4 times a year already and also fund wells the company does not need yet?"]

I'm a little puzzled by this.

If not drilling Triceratops with PRE has nothing to do with PPL237 being part (or not) in any discussion with Exxon, I don't see why we wouldn't go ahead and drill. In fact, proving a viable resource at Triceratops could very well strengthen our negotiating position by opening alternative monetization paths and possibilities, as well as allay some fears from people worried that there will be no gas processing in the Gulf.

In short, if there is no relation between Exxon discussion and PPL237, we should just drill. But I acknowledge that there might be issues I'm blissfully unaware off, but I think not drilling just to safe capital isn't good enough a reason not to drill, at least not for me.

[ArtM72]

In short, if there is no relation between Exxon discussion and PPL237, we should just drill. But I acknowledge that there might be issues I'm blissfully unaware off, but I think not drilling just to safe capital isn't good enough a reason not to drill, at least not for me.

I certainly agree here.  There've been some pretty weird statements made in this thread, like 'shareholders aren't funding the drilling, drilling partners are'.  Like those expenses don' show on IOC's books?  Just why then does upstream lose a ton of money every quarter?  Or 'leave it up to the big guys to decide when to drill'.  Great.  I'll rephrase the question.  Why haven't they?

Or even the general "why bother?" .

Why bother?  HuH? Delineate Triceratops to find out how much gas you've got so you can proceed with plans to monetize it.  We have 8Ts in Ttops?  Well, that means we start building Gulf LNG with two trains in addition to whatever comes out of E/A.  8Ts in TTops means if somebody is going to try to buy you out they know the base price starts with 18Ts already found in the ground.  PNG withholding drilling permits?  Let me guess why they would do that (if they have).  Shell wants to buy IOC on the cheap and they can't do that with 18Ts proven.

Maybe I just share Admin's "bliss".

[admin]

Well, even in the absense of any direct link between Exxon talks and PPL237, perhaps there is some greater scheme in how to deploy the limited rigs over the different resources and prospects in different PRL's and PPL's  that's holding up drilling. However, was PRE not going to add one or two rigs here? They had huge plans, I vaguely remember...

Drill baby!

[ArtM72]

PRE was not planning to start drilling PPL 237 until the third quarter at least, and I don't think they would want to start until they have the seismics currently being done, and maybe not until the XOM deal is completed as well. I think exploration planning may be a topic in the conference call.

It had been published (http://www.istockanalyst.com/business/news/5808228/pacific-rubiales-announces-farm-in-on-ppl237-license-and-triceratops-structure-onshore-papua-new-guinea) PRE would participate in six wells on T-tops and 4 other wells in the block and that work was to be done in the 2012 to 2014 timeframe.  That would be a lot of wells to drill in eighteen...er...sixteen months.  Do you think PRE's exploration VP Jairo Lugo is anxious to drill given his statement "In Papua New Guinea, the opportunities that we have interpreted and mapped are very, very, very large. We are talking about in excess of 5 to 10 tcf every single opportunity there." 

Nah.  Something's up with 237.  Hell, the PRE deal came out of nowhere.  Why should we expect anything different this time around?

[TxPm]

I believe all of PRE's presentations have stated they would start drilling in Q3 & Q4. We havent had a CC since Q3 started which is why I havent been too concerned with this especially with OSH doing their seismic work but i do expect an update come Tuesday

[Palm]

I guess one needs to ask where IOC's rigs are right now: both are in PRL15 and they are in negotiations with Exxon who likely says that if we conclude deal negotiations, those rigs stay in PRL 15 for the near term to delineate the structure as stated. To assume IOC can yank its rigs to go to Tri during this time is probably a bit shortsighted.

That means PRE would have to be bringing in any Rig(s) and we have heard nothing about that. In fact in their 2Q presentation I see no mention right now in their Exploration slides of Tri (correction; I see mention of Tri/Raptor; 1 in Q4)

Then we have the unknown of what exactly Exxon (or any other operator) would allow and prohibit during negotiations. If we look back to the Mitsui deal it had a specific clause that disallowed activity by IOC which would possibly hurt its capital position and permission to do certain things was required. I'd guess Exxon has done something even more restrictive until things are finalized. And I doubt IOC wants to chance anything negative hurting its cash/capital position that could jeopardize the deal(s).

Once again we are handicapped by being on the outside, but when reviewing contracts and contract language for deals such as these they are full of what can and cannot be done at specific times. The preliminary terms very well could have the clamps on drilling activity. And the government might be saying the same as many here. IOC has drilled and found resources, but a deal needs to get done on PRL 15 before you drill anything else. Note that the proposed PRL for Tri has yet to be approved. PRL 15 was applied for and received in little more than a month.

[Putncalls]

That is my point! There is plenty of time to drill! Duma and RDS are still problems.

[sageo]

Palm - Good point you made about PRL 15 being approved in a very short time after the application. This does cause one to ponder the length of time that it's taking to get approval for a PRL for 237. Probably as you and others have surmized, negotiations about buy-ins or farm-ins are ongoing as well as waiting on current seismics results. Good day to you and all our longs!

[sageo]

Palm-  PS ! Also,PRL 15 and PPL 237 do share 1 or 2 very promising prospects , so that could be part of the delay.

[freddiekingman]

Shorts will hammer us Monday!!

monday or wednesday...does it matter Tree ?