OSH at Goldman Sachs

[Gator]

Starts on page 16 of the presentation.  It is too big to post here.

Oil Search to acquire 22.835% gross interest in PRL 15,

containing Elk/Antelope gas discoveries, through

acquisition of Pac LNG

Upfront payment of US$900m, payable at completion

»

A contingent payments for any certified 2C raw gas

contingent resource in Elk/Antelope >7 tcf

»

Provides exposure to largest undeveloped gas resource

in PNG and substantial exploration and appraisal upside

»

HoA to undertake exclusive negotiations to acquire

interest in PPLs 236, PPL 237, PPL 238 and PRL 39

(Triceratops)

»

Acquisition will deliver significant long term shareholder

value and is in line with core strategy, to aggregate gas

resources to underpin LNG developments in PNG

PRL 15, located in Papuan Basin, contains Elk/Antelope gas

fields, largest undeveloped gas resource in PNG

»

Gross Elk/Antelope 2C contingent resources estimated by

OSH at 5.3 tcf of raw gas including 75 mmbbl condensate

–

Independent assessment by Gaffney Cline & Associates (Dec

2013) on behalf of sellers estimates P50 raw gas resource of 7.0 tcf

including 96 mmbbl condensate

»

Up to three wells, including Antelope 4 appraisal well, to be

drilled on PRL 15, designed to prove up sufficient gas

resources to support LNG development

»

As JV partner in PRL 15, OSH has industry standard rights,

including minority interest protection, work programme and

capital commitments voting rights and pre-emption rights:

–

Ability to influence how resource is commercialised

»

PNG Government has expressed desire that Elk/Antelope be

developed in earliest practical timeframe

Substantial exploration and appraisal upside in

PRL 15:

–

Range of material prospects and leads identified

–

Exploration well to spud 1H15

»

Oil Search holds interests in licences adjoining

PRL 15:

–

Provides aggregation opportunity

»

Oil Search has contracted a rig to InterOil for two

initial wells, with potential for two additional wells

for its exploration/appraisal programme

»

Exclusive negotiations with Pac LNG to acquire

interests in PPLs 236, 237 and 238 and PRL 39

 

[ebster123]

Nice find!!

[admin]

With the compliments of..

http://shareholdersunite.com/2014/03/12/...ch-report/

[admin]

Now with the right link, sorry people..

No need for password either.

[Getitrt2]

Thanks, Gator!

Comments/emphasis points:
-Cites 7 Tcf contingent resource estimates from GCA, but claims "substantial exploration and appraisal upside in PRL 15".
-Cites up to four appraisal and exploration wells to be drilled in PRL 15 "designed to prove up sufficient gas resources to support LNG development".
-Claims "Oil Search holds interests in licences adjoining PRL 15" which "Provides aggregation opportunity". I'd say that is at least a little overstatement. They have one lease that adjoins a small part of the southwest corner of PRL 15 at the farthest point away from Elk/Antelope and prospects in PRL 15. Otherwise, PRL 15 is surrounded by IOC PPLs, in which OSH is seeking interests from PacLNG but does not yet have any. OSH has exclusivity for such negotiations for six months; but I would say PacLNG is in no hurry, as they await drilling results and potential increases in values. I would also say their "aggregation opportunity" would be for additional gas to supply a second LNG project they would be a partner in and/or gas for expansion of either or both projects.

For those who are convinced that OSH is determined to divert PRL 15 gas to PNG LNG, I point out the following from their page 29 Summary not included above:

"Moving forward on LNG expansion plans:
– Proven P’nyang resource
– Drilling to determine size and shape of Hides underway
– Acquisition of PRL 15 interest provides exposure to potential new LNG development underpinned by Elk/Antelope. Commercially attractive on both a standalone or expansion basis"