Every Potential Molecule of Gas

[davidhmtk]

I think Hession says it well here. Its in all of the parties interests to do it right and get all the appropriate information before the building of the LNG facilities.  So from exploration, assessment, analysis and even as it gets bigger as Hession says the pie gets bigger for everyone and everyone will make more money. So the notion that even as the TCF's grow that TOT and OSH won't make money does not seem completely accurate.

Where I am at the moment is, LNG facilities cost tens of billions of dollars to build. And if you’re Exxon, you’re Total, or InterOil, or you’re Woodside, you don’t want to waste money by wrong sizing this plants. Historically, this industry has lost a lot of value by under sizing plants and wasted a lot of value by actually over sizing plants. So, there is a billion dollar dial there as well. So Total, Oil Search, ourselves, Papua New Guinea, we've all got an absolute interest in making sure we put the right amount of kit and right amount of capital equipment on the right type of reserve, and so that’s about capital efficiency. But also, as this thing grows, the pie gets bigger for everybody. Total will make more money, Oil Search will make more money, we will and Papua New Guinea will as well. So we’re all lined up. It’s one of those beautiful situations in business where strategically, you’re all lined up in the same direction, which sometimes is not the case.

Hemi - add in the cash from the Gov't buy-in.

[Palm]

Another comment: On the drilling, if per your schedule we are drilling outside of EA 4 wells/year it will be for the purpose of the next PRL sell-downs; Wahoo area being the most likely should they hit there. On the MS interview he cautions several times on how uncertain this prospect is due to the large step-out from where they have drilled to date. Should Wahoo hit AND prove to be a true extension of the reefal "string of pearls", we will not only have a nice sell-down, but it likely will be hard to hold onto the company.

Should Wahoo not prove out, they have other prospects, but they may cut back on drilling until/unless they find another promising multi-T prospect/area.

But with what we have within PRL 15 between FID on a 2-train startup and the expansion FIDs I'm not too concerned overall with a major cash squeeze down the road. They have done a great job managing cash needs well before there is a crunch since Hession's team has taken over. That was a big issue in the past, but now is in good hands.

[jft310]

Their defensive strategy is to get another Super Major involved in their assets and possibly get synergies with a third Super Major .
Each new player at the Super Major level makes a takeover harder.
Remember they added 2 new Board members experts in M and A and this is part of their solution.
Poison Pill still available and then he used the White Knight words.
Pay packages switched to more stock and less cash . Means they want to survive if possible . Performance measured over 2 years to get stock .

[sageo]

Another comment: On the drilling, if per your schedule we are drilling outside of EA 4 wells/year it will be for the purpose of the next PRL sell-downs; Wahoo area being the most likely should they hit there. On the MS interview he cautions several times on how uncertain this prospect is due to the large step-out from where they have drilled to date. Should Wahoo hit AND prove to be a true extension of the reefal "string of pearls", we will not only have a nice sell-down, but it likely will be hard to hold onto the company. Should Wahoo not prove out, they have other prospects, but they may cut back on drilling until/unless they find another promising multi-T prospect/area. But with what we have within PRL 15 between FID on a 2-train startup and the expansion FIDs I'm not too concerned overall with a major cash squeeze down the road. They have done a great job managing cash needs well before there is a crunch since Hession's team has taken over. That was a big issue in the past, but now is in good hands.

Palm - If Wahoo doesn't prove out, I would humbly suggest that our next path would be the Raptor side-track . The newer seismics and the interpretation thereof makes me believe that this possible giant should be high on the list for near term consideration .As MH mentioned in the MS interview...(Raptor) "a condensate content that is better than we've seen in other wells". Just thinkin' out loud,fwiw . Best to you. [ Am I an expert on seismics....of course not,but I have looked at a few over the years]

[Gator]

Hemi - add in the cash from the Gov't buy-in.

The PNG government might not have the cash buy in and pay IOC upfront.  InterOil has always assumed that they would get a higher % of income from the LNG until the Government "buy-in" is complete.

[jft310]

The government announced they were raising money to buy into Antelope and buy into Exxon's third train